Undervalued?, page-33

Hi @Madtrader. Mid this decade the Chine wrote off everything in GRR's balance sheet that wasn't cash and I think the then pitiful amount invested in developing the STDSF. I think it was a sort of 'new broom sweeps clean' approach and the falling IO price made it clear. The process was spread over two years FY14 & FY15. The balance of mine properties & development reported Ces 2015 was a meagre A$16m ... about the the then STDSF ... Plant & equipment had a remaining book value of around A$83M

Over the 2 financial years, GRR wrote off $580m book value of assets. It did hurt!

Of the key impairment assumption, as per fin. statements FY2015 (note 26), the long term pellet price was identified as US$75.76 and AUDUSD @ 0.73. It seems to me that maybe those key assumptions (which I have no doubt will account for a huge component of the value drivers) might not now be true...

I think this is where @ValueSeeker is coming from.

Again though, all a bit moot as they will not reverse that or any part of that valuation simply because they don't have to. The ROA of 30.30% which is certainly worthy of bragging about over a cool Tsingtao! And so IMO they'll leave it exactly as it is.

Have a great day.