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29.5¢ mount gibson iron limited

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15,774 Posts.

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29/11/17

15:11

Post #: 29220278
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Originally posted by Djingo ↑

Auto, that seems conservative - you are implying negative operating cash flows for the next year. I posted the following estimate back in July.

Looking at a one year cash projection starting from the quarter end cash balance of $507m, they should have non-operating cash inflows of about $12m for interest and $5m for the remainder of the insurance claim, outflows of $85m for KI capex and $21.9m for the dividend just paid, bring the net cash position to $417m or 41.3c per share.

The swing factor will then be operating cash flows which will depend on the IO price and the sales mix of high/low grade ore.

If they can maintain even modest positive operating cash flows over the next year, they will be in a very strong position by beginning of 2019 with KI capex complete and generating substantial cash flows, assuming the premium for high grade ore is sustained.

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Sorry
I failed to add I was assuming another Divi and I have estimated a higher capex for KI for extra conservativeness. You are spot on in your numbers because I get about 41-42c without divi and buffer

MGX Price at posting: 39.5¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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Last 29.5¢		Change -0.005(1.67%)		Mkt cap ! $365.5M

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Price($)	Vol.	No.
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