Hi Oreb & Swerdina, it's nice to see some new posters here & I hope more will join in the conversation.
I am enthusiastic about this company as you might have guessed. I have given up on higher risk speculative stocks with plans for production years away, multiple dilutive CR's etc,,, and now only hold this stock.
With the resource in place, development plans executed on time, expansion plans already in the pipeline (Phase 2 already 75% complete due to Cliffs investments), excellent management, then the only significant risk is the Iron Ore price which I follow almost daily.
Speaking of which - Oreb, I would suggest another US$5 on your US$42/t operating margin at current price.
It's hard to find Bloom Lake's 66% Fe price quoted in the media as usually quoted are the benchmark 62% & higher grade 65%.
But right now Bloom Lake's product would fetch very close to US$100/t. Here is the proof:
65% FE - US$94.60/t
https://www.*.com.au/iron-ore-chinese-new-year-holiday-2018-2
I had to go back to Dec 2017 to find a reference to both the 65%Fe & 66% Fe price in the same report:
https://do not advertise external s...oncentrate-prices-continue-to-strengthen.html
As you can see, there is a US$5.50 difference between 66% Fe & 65% Fe. The additional premium has widened along with the spread between the lower grades since the BFS was released a year ago.
So add the 66% Fe premium to the current 65% Fe price and you have US$100/t.
Total CFR Cash Cost is US$53/t which gives an operating margin of around US$47/t at present.
FMG - the worlds lowest cost producer cannot even match this margin, despite their considerably lower shipping costs to China. Reason for this is that the structural change in the landscape results in the much lower price for the lower grade product that they produce. No wonder they are now chasing higher grades!
With Bloom Lakes profit margins higher than expected, we might see a dividend in the first year?
What a powerful message that would send to the markets, something even the Canadians (TSX) couldn't ignore!
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(20min delay)
