I don't know if this has been posted (i found it on Commsec):
AUSTRALIA’S NEWEST IRON ORE PRODUCER WDR released its 2Q14 production report, with 338kt of ore mined in the quarter and 24kt shipped (loaded onto ship as at 31 December 2013). With production from the Roper Bar iron ore mine commencing in the December quarter, it appears to us 2014 is likely to be a watershed year as cash should start to flow. Roper Bar fully funded; first ore shipped in December The Roper Bar project is fully funded following equity raisings and an $80m project finance facility. WDR started loading the first ship on 19 December 2013, about a month later than earlier targets. The resource continues to surprise positively on grade, tonnes and lump ore percentage. The first ore is lump, grading 60.5% Fe, which makes it among the highest-value iron ore being exported from Australia. Given the slower-than-expected start, managing working capital in the March quarter is likely to be tight, but WDR should be strongly cash-flow-positive once it gets to full production in March/April (there was $20m cash on hand as at 31 December 2013). We assume WDR will ship 1.2Mt of product in FY14 and reach full production of 3Mt in FY15. 2Mt of sales in 2014 are hedged at A$120/t, which should enable WDR to be debt free by the end of CY14 provided there is no further slippage in shipments. Problems with barges and weather have had minimal impact There has been an issue with the performance of the barges (which tranship the ore from the port to ships). The barging contractor PB Sea-Tow (PBS) is providing additional equipment (two extra tugs) and personnel to site, and has committed to make up the lost early tonnes with the additional cost to be borne by PBS. WDR saw a significant weather event in January, with 600mm of rain falling in just nine days (WDR noted the average annual rainfall in the region is 850mm). Apparently, the haul road handled the conditions well, thanks to the decision to seal the road with bitumen. Maintain Overweight and $1.06ps price target We have made no changes to our earnings forecasts. When it reaches full production, we expect WDR to be strongly cash-flowpositive and to trade on attractive multiples. The stock is trading at just 2x EV/EBITDA on our FY15 forecasts, assuming iron ore averages USD115/t (cfr China 62% Fe). We maintain our Overweight recommendation with a $1.06ps 12-month price targ
Its positive - if I was a shareholder - I would be holding but DYOR cause I have lost shitloads in the last couple of weeks.
WDR Price at posting:
64.0¢ Sentiment: Hold Disclosure: Not Held
