The last quarterly had a cash margin of USD 288 per tonne, when the the cross rate is falling this increases the AUD earnings from MtC (expenses in AUD, sales in USD). This seems a healthy enough margin given our point in the cycle.
I am also thinking that given the sale to POSCO there will need to be a revaluation of the remaining SDV asset which apart from the large increase in earnings for the period will put the company in a position where it is valued at below book value and thus will contain good break up value making it an acquisition target (if it is not already). It could literally sit on the asset with zero debt and still realise a marked increase in shareholder value as SDV appreciates. There is also the real possibility that management start to draw in shares if they judge this is the bottom of the cycle.
The only risk I see is for LTH who may get bought out at the bottom of the market in a takeover, this does not apply to me but it would at least see a decent premium to the current price.
