When they where actively spruiking this enterprise I am sure...

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albalad

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12/04/16

09:05

Post #: 17478625
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Originally posted by kmcconkey ↑

My apologies Samson, I wasn't quite paying attention to the spot/current price part of the discussion.

I have added some resources for historical reference (you can see the price trends). I don't know where guennadi got this price from but it is not an accurate reflection on the 'bulk' commodity price. The normal 'premium' for 65%/66% vs 62% is about 5-10%. So you take the Platts IODEX price for ore landed in Tianjin and that should give you a very very good indicator for the price that KML are receiving. Also, KML report costs in US$ as well as sales in $US. Currently the costs of extracting and processing the ore are substantially higher than the Q4 sales price (nevermind all of the other costs that need to be considered). The very worrying trend though, from KMLs own reports is that KML are not even getting a 2% premium, they were getting around the exact same price as RIO (but RIOs price was ex shipping, KML was including shipping), implying zero premium and a significant penalty for economies of scale!!!!!

Personally I think it would take 62% Fe to be at around US$100 to be profitable. If you refer/reread my previous comments in the other thread I have gone into this in significantly more detail. Unfortunately their costs are just way way too high.

https://www.thesteelindex.com/files/custom/Iron Ore/TSI Iron Ore Reference Prices - 21 Jul 14.pdf

http://www.vale.com/EN/business/mining/iron-ore-pellets/Pages/Iron-Ore-Indices.aspx

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When they where actively spruiking this enterprise I am sure they were claiming that the premium would be 20% - once they achieved 68%.

But then they are still claiming successful completion of this project on the promotional video!!!! so how much credibility do they have ???

Last edited by albalad: 12/04/16

GBG Price at posting: 2.0¢ Sentiment: Hold Disclosure: Held
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When they where actively spruiking this enterprise I am sure...

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