Atlas Iron (AGO)

[Huang Chung]

Boardroom Radio interview on the Giralia takeover.

http://www.brr.com.au/asx/AGO/atlas-iron-limited/

Disc: Holding AGO, GIR

[corporateraider]

Welcome back on board HC
The takeover has been a great Christmas present. Like you I still see tremendous value and 25 to 50% growth in the next year is a distinct possibility.

[Huang Chung]

Atlas presentation to the ASX Small to Mid-Cap Conference in New York.

http://www.brr.com.au/event/77434/atlas-iron-presents-at-the-asx-small-to-mid-caps-conference-in-new-york

[Corporate]

Hello all

I have crunched some numbers very quickly this afternoon to gain a reasonable expectation of what cash flow and profit we can expect from AGO as we ramp up to 12 mtpa.

It certainly isn't an exact science, however, I have taken the major assumptions (cash costs, royalties, depreciation) from AGO presentations.

Suffice to say, AGO have very quickly moved to 8mtpa. 10 mtpa follows by June 2013, shortly followed by 12 mtpa by December 2013.

I don't think many have really caught on yet.

Remember this doesn't factor, ramping up to 15 mtpa by 2015 and 46 mtpa by 2017. This upside is priced at zero in my opinion.

The crown jewel is port capacity of 46 mtpa.

Anyway this is only a first crack and I'd happily take any points on board.

Cheers,
C



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[gazprom1]

Hey Corporate,

Happy New Year!!!

I have watched AGO for a while and was lucky not to buy in at $1.15 a few weeks ago as was keen. Managed to buy on the dip last week at 92.5 cents and very happy after yesterdays move. Looks very solid and with production on the increase and much of the product sold for the coming year it looks very solid. I am happy that they have their cash costs under control. However, I will may exit at some point soonish if the SP were to spike another 15-20% from current levels.

Cheers
Gaz

[Corporate]

Well done and Happy NY Gaz.

I'm holding AGO until at least when we hear about the rail deal. This will unlock a huge amount of reserves and could potentially transform AGO into a significant player.

[Joshuatree]

Thanks for sharing your spreadsheet Corp. Even at $100 tonne AGO looks great!.

[cloggs]

Can someone please explain to me why AGO dropped 10% today on no news that I am aware of?

[tosspot]

Can someone please explain to me why AGO dropped 10% today on no news that I am aware of?
most mining stocks dropped by about that aswell.

[Joshuatree]

Fears of slowdown in China with consequent Iron Ore prices drop.

[skid]

Not great for AGO but the wider implications are even more troubleing

[Daytr]

Memories of 2012 when the FE price did a similar thing. Currently trading $105/ton down some $30 a ton quick smart & many are calling for $90/ton. In 2012 it got down to $86 from memory & it rebounded sharply to around $125/30/tone. I wish I still had access to the FE forward curves & China port stock data as the price of FE was very easy to predict imo. China will withdraw demand if they think they are paying too much for something & I suspect that is what they are doing here. Considering the global economy I suspect they think they are paying too much for things like FE & copper. So it will be interesting to see how this pans out & is it China just playing the game or is there more to it.

[Daytr]

KW, could well be, however I really wonder how much FE is used for collateral, but its possible. Copper certainly is & that has also had some big falls as well. The recent bond default in China has sent a few shivers around the market as well as one suspects it wont be the first. Actually letting it default will prove to be a positive in the long run, but it may mean there is some more pain in the mean time, however I don't think the Chinese economy is about to implode.

[gazprom1]

AGO is profitable at less than $80/t. I think they have all in costs of around $67-9/t with the aim of reducing that by $2-3/t this financial year They have contracted forward up to 7.9mil/t this financial year. Probably not a good idea to be holding with the way the SP has decreased the past week or so but at some point AGO maybe a buy.

[Daytr]

Very true, its all about do you let it get too big to fail! I can see banks being broken up over time. They did it to the Japanese trading houses after the WWII as they had too much power. The banks are in a different but also similar situation where they have too much influence & the continued bailouts which I am sure there will be many more to come, particularly in Europe, will one day be one step too far for the general public to stomach. We have a bloated monetary system that hot air keeps being pumped into to avoid facing consequences. One day that system is going to pop, like a bloated cow!

[Daytr]

I had a look at the FE forward curve which in the past has been a pretty good indicator short term of where the price is heading. Basically its indicating around $100/ton, so if that is the case most of the fall in the price has already occurred. Port stocks are reasonably high though as there is this credit issue overhanging the Chinese market so its not that clear. One thing I have always thought with the Iron ore market as the big boys just want to get bigger & squeeze out the competition no matter what it costs them in the potential price of iron ore per ton. The expansions in production were never sustainable imo over time. Short term I wouldn't be surprised to see iron ore back toward $130/ton in a few months. China is a massive producer but grades are getting a lot lower. I suspect however they will ramp up production out of Africa. $100-120/ton is probably a more realistic long term price imo. AGO's break even is currently around $80/ton I believe.

[gazprom1]

I had a look at the FE forward curve which in the past has been a pretty good indicator short term of where the price is heading. Basically its indicating around $100/ton, so if that is the case most of the fall in the price has already occurred. Port stocks are reasonably high though as there is this credit issue overhanging the Chinese market so its not that clear. One thing I have always thought with the Iron ore market as the big boys just want to get bigger & squeeze out the competition no matter what it costs them in the potential price of iron ore per ton. The expansions in production were never sustainable imo over time. Short term I wouldn't be surprised to see iron ore back toward $130/ton in a few months. China is a massive producer but grades are getting a lot lower. I suspect however they will ramp up production out of Africa. $100-120/ton is probably a more realistic long term price imo. AGO's break even is currently around $80/ton I believe.

AGO all in costs are below $70/t

[gazprom1]

I had a look at the FE forward curve which in the past has been a pretty good indicator short term of where the price is heading. Basically its indicating around $100/ton, so if that is the case most of the fall in the price has already occurred. Port stocks are reasonably high though as there is this credit issue overhanging the Chinese market so its not that clear. One thing I have always thought with the Iron ore market as the big boys just want to get bigger & squeeze out the competition no matter what it costs them in the potential price of iron ore per ton. The expansions in production were never sustainable imo over time. Short term I wouldn't be surprised to see iron ore back toward $130/ton in a few months. China is a massive producer but grades are getting a lot lower. I suspect however they will ramp up production out of Africa. $100-120/ton is probably a more realistic long term price imo. AGO's break even is currently around $80/ton I believe.

AGO all in costs are below $70/t

[Daytr]

gazprom1, not according to an article n the SMH yesterday they quote it at $82/ton

http://www.smh.com.au/business/bhp-and-rio-tinto-upbeat-on-iron-ore-prices-despite-slump-20140311-34kce.html

[gazprom1]

gazprom1, not according to an article n the SMH yesterday they quote it at $82/ton

http://www.smh.com.au/business/bhp-and-rio-tinto-upbeat-on-iron-ore-prices-despite-slump-20140311-34kce.html

I wonder where they derived their numbers from? According to AGO's latest presentation, they had all in cash cost of $74.9/WMT. They are targeting savings from the admin level, medium/ small vendors and operational improvement.

[Daytr]

All in cash cost? Does that include capex cost? All in cash cost normally refers to all in operating costs including admin & head office costs as far as I'm aware. All in sustaining costs should include capex & the like.

[gazprom1]

All in cash cost? Does that include capex cost? All in cash cost normally refers to all in operating costs including admin & head office costs as far as I'm aware. All in sustaining costs should include capex & the like.

Includes expensed exploration and evaluation.

[gazprom1]

AGO has been decimated by the iron ore price fall.....low of 13 cents a few weeks AGO. Up 40% today. Now 23 cents. Looks like they are able to survive a current levels...highly leveraged to ore price. Time will tell.

[Joshuatree]

AGO in voluntary suspension pending an extensive outcome of companies outlook, operations , asset sales opps and capital structure in light of rapid fall in iron ore price. Tip of the iceberg?

[Westboy]

Yep first of many over the next 6 to 12 months around the world.

[JBmurc]

Atlas Iron (AGO) will start winding down its WA iron ore mining and export operations this week after deciding to quit the business because of the current low prices.

The company’s decision, announced on Friday, was not unexpected after Atlas asked for trading in its shares to be halted to allow it to work out its immediate future as an iron ore miner and exporter.

[Joshuatree]

On a side issue ; Maca (MLD) have lost the contracts for AGO which was $4-$5mill a month. Maca however advises that it anticipates NPAT will exceed the $55.4 million which was achieved in FY2014. Mkt cap currently re $188 million.S/P up .05c a day later, so mkt doesn't believe mgmt or is numb to all M/S companies still and the Macro looks bad for years .Cant resist looking at these in a contrarian(danger danger!) way.

[Westboy]

Well at least MLD isn't as effected as MCS. They are in a deal of trouble over the AGO closures. MLD does have some large exposure to other iron ore projects which the market is factoring in right about now. Iron ore is the most abundant commodity on the planet, and we have a gigaloop ATM, more supply means lower prices which means miners increase production to lower costs which in turn leads to more supply and lower prices again. If you own any business with exposure to this sector then take a very very close look at that business IMHO! This wont end well!

[Daytr]

Will FMG follow? Their massive debt makes them vulnerable. AGO had plenty of options & advanced notice & they took none of them.

[Westboy]

Yep

Sinosteel suspends mining operations

https://www.youtube.com/watch?v=NeMrttj8Ucg

[macduffy]

Atlas Iron MD interviewed about the current capital raising.

https://www.livewiremarkets.com/wires/27835?utm_source=Trending+on+Livewire+%22The+Morni ng+Wire%22&utm_campaign=62bc71ba51-Trending+on+Livewire&utm_medium=email&utm_term=0_1911ffeed5-62bc71ba51-82636925&mc_cid=62bc71ba51&mc_eid=9f402457b0

[macduffy]

Well, that didn't work very well!

http://www.theage.com.au//breaking-news-business/atlas-iron-shares-drop-69-per-cent-20150727-3zz94.html

I wonder if they have a Plan B?

[karlos68]

Had a gutsful of PEN, sold 1 of my holdings and bought this today............RSI looking sweet.

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