to sell or to hold, page-18

I think to put it all into perspective AGO has little debt and a number of projects. Whilst there cash costs are approx. 50/MT + Shipping 10 + Amortisation of $20/MT = 80/MT. AGO would be receiving approx. $110 - $120/MT. Margin of $30 - $40/MT. On 5M MT a year EBITDA around $150M however in 2013, they will incur almost 200M in Capital Expenditure and 2014 $250M. If we see an average price of $90 - $100/MT, AGO will have trouble servicing the debt. Whilst Horizon 2, may deliver 50M MT per year, its capex may be $40/MT. Breakeven may be $100/MT. Look to AGO board selling some projects, to fund this. Remember Twiggy performed a miracle with FMG and rolling the debt, don't expect AGO to be able to do the same. However Current price of $1.08 does not give any value to Horizon, therefore $1, is a great long term buy.