Takeover, page-85

As per an earlier email by someone (can't remember who sorry) and reserves/resources announcement WDR have an estimated 15mt of DSO. So as he/she suggested at a $20/t net profit that equates to approximately $300M or 29c per share (DYOR on that one). The significant amount of money owed to Macquarie (is it over $80M now?) and creditors - have to check Annual Report for how much it is exactly but lets say it's $20m - DYOR. That's a very rough estimate of $100m of short and long-term debt (DYOR).

Unfortunately though it seems WDR are only forecasting mining 3mtpa, so 20% of the $300M is of course $60M. So it would take roughly 2 years to pay off the current short and long-term debt. The problem I have is that following the end of this quarter (at the end of the month) I believe WDRs fully hedged position moves to a 25% hedged position - and I assume the current spot price is around $30/t lower than what the hedged position is at - so the majority of ore from October 1 onwards is likely to be sold at around $30/t tonne less or even lower if penalties are applicable.

So then whoever it was that roughly estimated $20/t net profit - what realised iron ore price were you basing your calcs on please - because if they're based on current quarter fully-hedged prices, and if the company has not been profitable at the fully-hedged rate (around $120/t @ 62%Fe I think - DYOR), then I struggle to believe the company will be cash flow positive from Oct14 onwards (IMO and DYOR).