Turning point?, page-12

First 12 Last

Share
Profile

Follow
Nova Star

3,260 Posts.

69

18/04/17

18:02

Post #: 24122442
Share

Originally posted by defabs ↑

I have absolutely no reason to be concerned.

Wodinga has now finished up and of their three operating mines, the grades were by far the lowest
It averaged 54% FE according to the Minerals Estimate released in Sep 16.

It will also receive 2% FOB relief for all sales from Wodinga from 1 January 17.

AGO has said on a number of occasions it was looking to take advantage of the higher price by bringing forward the selling of more fines product also

There is still about 432K more inventory either at port or site compared to the previous quarter.

There are hedges in place that will protect downside for the sale of 1.6M tonnes.
There are puts for 620K at USD 66 and a further 960K in swaps at AUD 94. The swaps would now be an unrealised profit given the headline 62% FE rate
The average realised price including hedges will likely provide cashflow in excess of what was achieved in this quarter

Their operating Cashflow for the March qtr excluding hedges was $43M (excluding hedges) and much of this would have come
from their non fines product

Therefore, there would have net cashflow of around $15 per tonne ($43M / 2.7m (exc value fines)).
The discount widening is temporary in nature and will revert back to historical levels.
Once coal prices subside, which they have already started doing, there is less incentive to pay a premium for high grade ore.
AGO's grades should improve going forward without Wodinga and also less fines being produced as a % of total production.

At the moment, I would like to see a halt on funds being spent on Corunna Downs until the market picks up.
It is best at the moment to ensure gross debt is reduced as much as possible. Net debt is about zero now but the
further this can be reduced especially in this climate the better. Whatever they have paid the debt holders
to get approval of the mine is a sunk cost.
The mine can be developed at any time. It does not need to be done in the short term

There is still a lot of positive news coming from China and the GDP results released show an acceleration of the GDP rate.

The financial position of AGO is much better than it ever has been. I am still confident of its future and will continue to accumulate where possible

Expand

"The financial position of AGO is much better than it ever has been. I am still confident of its future and will continue to accumulate where possible"

Well said and I agree.

MASSIVE VOL today....buy buy buy......AGO has great assets on the CHEAP.

AGO Price at posting: 1.5¢ Sentiment: Buy Disclosure: Held
5 Upvote

0 Great analysis

Reply

Top Stories

PRS

Prospech finds dynamite heavy REE grades from historic core in Finland

Trump is President Again: What Does This Mean for Crypto?

3DA

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

PR1

Nanocap Pure Resources acquires Reedy Creek garnet project, WA