whats going on ?, page-163

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Mr Hamilton

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08/06/20

10:57

Post #: 45092304
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Originally posted by Delcos66: ↑

The Brazilian President had failed to implement any critical restrictions or social distancing rules, and unfortunately the civilians are paying the price from his lack of leadership. So Global Iron ore production has been reduced from the Vale shipment delays due to monsoon rains, and now the court ruling closure on its Itabira complex due to coronavirus cases in its workers. Brazil Iron ore sector has had it extremely rough in 2020, and overall they have had it rough since the 2019 dam disasters.

Again, the Australian Iron ore sector is significantly benefiting from Vales problems. The decline in global production has been critical for maintaining healthy Fe seaborne prices even when demand for steel had plummeted (February to April). Now as Europe is slowly opening up, and with China improving its activity level, the slowly improving demand + production cuts will enable for maintaining and/or increasing iron ore prices.

Given how Fenix construction period is to take roughly 3-4 months, an approval in June/July would see first shipments by November/December. I wouldn't expect US$100/t level to be maintained by November, but again it really depends upon a multitude of factors such as Vale production output, Brazil coronavirus problem and global demand for steel.

Last Week (before the current Vale mine closures), 62% Fe future contracts for November and December was roughly US$87/t and US$85/t respectively. Under current exchange rate of 1AUD=0.7USD, those futures represent AUD$124/t and AUD$121/t.

With the Feasibility stating an all in sustaining cost of US$60.28/t = roughly AUD$86/t, the operating profit margin is looking to start at: 124-86 = AUD$38/t. This is significantly better than the Feasibility stated operating profit margin of (US$78/t = AUD$111) - AUD$86/t = AUD$25/t.

The reality is that the ongoing problems in Brazil are significantly benefiting the economics of Fenix. Its EBITDA and Net cashflows for Year 1 are looking better than expected given the supply issues.

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“I wouldn't expect US$100/t level to be maintained by November” - Yes, they were saying this also at the start of the year when I/O dropped to low 80’s but look at us now.

It’s like what the member @mineralecon said, this is one of those how is everyone not seeing this type of stocks.

This will ALL come down to one thing now and that’s Management! It’s all being served to them on a silver plater, it’s on them now to truly define themselves!

all imo.

FEX Price at posting: 8.8¢ Sentiment: None Disclosure: Held
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(20min delay)
Last 27.0¢		Change 0.005(1.89%)		Mkt cap ! $194.5M

Open	High	Low	Value	Volume
27.0¢	28.0¢	26.5¢	$321.6K	1.183M

Buyers (Bids)

No.	Vol.	Price($)
8	1112641	26.5¢

Sellers (Offers)

Price($)	Vol.	No.
27.5¢	170000	2

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No.	Vol.	Price($)
8	1112641	0.265
24	2433257	0.260
5	207000	0.255
27	522655	0.250
12	456713	0.245

Price($)	Vol.	No.
0.275	170000	2
0.280	479468	10
0.285	229396	6
0.290	195415	5
0.295	99404	3

Last trade - 16.10pm 06/11/2024 (20 minute delay)

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