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are at liberty to do what they want with their REM shares but if they should decide to go for your forecast or forarming as you call it, it is up to them.
THAT IS THEIR DECISION - AT LEAST THE CO HAS TRIED TO GET BACK THEIR REM CAPITAL in terms of the path the co has taken to try to steer through the commodity bear market and had to sell BCN shares to survive this period.
As I said, the figures are too ----to the end of the bell-weather range of normal distribution?
So, correction of EBITDA is irrelevant UNTIL IT CAN BE PROVEN OTHERWISE IN THE FUTURE RE: KDNC*S ACTUAL PUBLISHED A/C*S so that we know or NOT that cost is fixed or not?
So, to me I did SAY ====AN EXAMPLE TO SHOW. I never said I HAVE WORKED OUT ACCOUNTING TO THE LAST BIT which I will not be privy to as to what finer tuning there is in terms of costs especially given inflation is going up etc.
I have had my say and you, yours.
Let HISTORY NOW PROVE OR NOT OTHERWISE. Certainly for myself, these days, I slap my cheeks virtually if I ever saw £10,000 potential from £200 investment. That is to put some sense in rather than have the GME effect take over?
Thank you.
News, Thur, 4 Mar 2021
As they say, TIME PROVES ALL THINGS.
DYOR. PLEASE DO DUE DILIGENCE.
I read that Zamin after buying Amapa found the iron ore price dropped to $40, virtually impossible to make any money given that the chap said that Amapa has a "HIGH INTERNAL COST OF $70." How, I am not sure as I have not been given to understand Brazilian iron ore has a cost of $70 USD? This is from the link that I read on the main board in Spanish but translated into English relating to the Amapa railway. Maybe, when Zamin took over, then he found out? I do not know why that chap said so?? That is something that is out of our depth as we cannot do due diligence on given we will not be allowed to look further.
Part 2-no space
if not a bit earlier. ONE CAN SEE NET SALES WENT FROM $1.603 billion in 2020 to $1.813 BILLION IN 2021, so not a extreme jump. Why, I am not sure as I have not investigated further. Then, one sees that EBITDA went from $734 BILLION IN 2020 TO $814 BILLION IN 2021, AGAIN ONLY A £80 BILLION JUMP - 10% + JUMP. One would think that with HIGH ORE PRICES, THE EBITDA WOULD JUMP MORE THAN 10%+ GIVEN THAT AS YOU TRY TO TEACH ME THAT COST REMAINS THE SAME? So, somewhere, EBITDA has NOT JUMPED 3X OR 2X OR X TIMES THE RISE IN IRON ORE PRICES. Why? Logic and reason would provide the answer.
NET INCOME WENT FROM $540 MILLION [2020] TO $820 MILLION [2021].
NET MARGIN WENT FROM 34.2% [2020] to 45.2% [2021] so margins improve a fair bit.
--------
DEV-JV {KDNC & SINO]
So, for KDNC with say 49% per your modelling would NEED to BRING HOME FROM DEV JV EACH YEAR SOMETHING IN THE ORDER OF $820 MILLION TO JUSTIFY A MKT CAP OF SOME £2.03 BILLION. Say, we deduct 30% from MKT CAP OF £2.03 BILLION to some £1.4 BILLION, THAT STILL MEANS KDNC with 49% would----------------------- NEED TO BRING HOME IN NET INCOME some US$795.4 MILLION INTO ITS COFFERS IN CASH TRANSLATED INTO £*S."-----------------
Can DEV [JV AMAPLA] produce US$795.4 MILLION NET INCOME [after tax etc as tax HAS to be paid to Brazil before any distribution]. Dev cannot allow KDNC to draw out 100% to take home in net income as it will need to keep a healthy CASH BALANCE FOR WORKING CAPITAL ETC.
IF KDNC CAN BRING HOME US$795.4 MILLION FOR JUST A 49% SHARE, IT MEANS THAT DEV HAS A NET INCOME OF SAY $795.4 MILLION X 2 [SAY 50/50 FOR EASY CALS ONLY] =======US $ 1. 5 9 BILLION IF 100% GROSS FOR THE WHOLE OF DEV.
THAT WOULD MEAN THAT DEV IS EVEN BIGGER THAN THIS LISTED IRON ORE CO ? THIS CO OWNS 100% OF A IRON ORE MINE AND PRODUCES WHAT I HAVE SEEN MORE THAN DEV AND EVEN THEN IT CANNOT PRODUCE US $ 1 . 5 9 BILLION IN NET INCOME!!!
IN FULL PRODUCTION, THAT IS STILL 18 mths shipping stockpile + 18-24 mths to do scoping study and re-commission the mine = AT LEAST 3.5 YEARS AHEAD.
ALL THESE CALS ARE IN FACT NOT OF THE STANDARD OF ACTUAL ACCOUNTING AS IT ASSUMES X AND Y WHICH IS NOT HOW OPERATING IRON ORE CO*s OPERATE. 1] 49%-since there is NO DETAIL, IT COULD COST AN ARM AND LEG. DL said 19% extra in the JV is just too expensive to do. Litchfield -KDNC to take from 49%to 100% is also LOADED TOWARDS THE HIGHER %*S.
So, A LOT OF ASSUMPTIONS THAT IN THE REAL WORLD WHERE ACTUAL BIZ OPERATES, THIS WOULD HAVE NOT PASSED MUSTER ? If I had told my boss something like that, I know what*s coming? I can see the holes that will be picked as there is NO BENCH-MARKING or any ANALOGY GIVEN & MODELLING FROM LISTED CO*S WITH THAT TYPE OF INCOME AT THE MOMO WHICH IS MORE REALISTIC AND THE FORWARD GUIDANCE THEY WILL PUT DOWN IN THEIR STATEMENTS WHETHER THE PRICE OF IRON ORE WILL HOLD so that folks know what they can or cannot expect from the co.
I am afraid that folks are a
@observer842
AMAPA IRON ORE PROJECT -KDNC
Folks think that the share price could go to 40p if iron ore prices are low and £1 if high. But you think that the share price could go to £ 5 to £ 1 0 IN FULL PRODUCTION and KDNC has a 49% share. All this is done to forearm so that you can prepare to see what you are going to do or else top slice.
---SHARE PRICE OF KDNC CURRENTLY 19.84p with a MKT CAP OF £28. 68 MILLION--
So, to get to £1, that is roughly 5 x if one rounds the sp to 20p [£1 divide by 20p=5x] with a potential MKT CAP OF SOME £143.4 MILLION.
So, at 40p, MKT CAP would be 2x= £57.36 million. Once REM was 2.25p = £95m. Many bought at 0.9p per the biggest holder ,so round it up to 1.125p would mean that the mkt cap would be £47.5million. So, it is potentially possible that at 40p say, old REM holders could get out their capital as they expressed on the main forum ie LOSS RECOVERED? That is UP TO THEM, WHAT THEY DO IN THE END BUT TO ME, BOTH DL AND THE BOARD WOULD HAVE GOT MANY OUT OF THEIR POTENTIAL LOSSES AND HOPEFULLY A BIT LEFT OVER as profit. This is the hypothesis. DL does hope everyone would recover and he appointed Suckling with his contacts in the metals industry.
£5-£10 KDNC SHARE PRICE PER YOUR POST HEADER date Wed, 3 Mar 2021.
Very rarely do shares these days multiply from 19p [round it to 20p for easy cals] to £5 or £10
as it would be a 50 MULTI-BAGGER at £10 or 25 bagger at £5 with a MKT CAP of £ 1. 4 3 4 BILLION @£10.
Effectively, it means that Joe Public if they were to buy today 1,000 KDNC shares costing say £200 @20p + commission, they could make £10,000 from just £200!! This is even more "Xtrem" than what DL said at the party ie X2 which is reasonable given how we have seen BCN & EMH re-rated before production or DFS respectively with a bit more to go.
This is the type of thing that makes folks lose their "grounded" sense - the new phenomena of the case study of GME. I read the story of some of them and they just got caught up by this ungrounded sense that they were all going to be rich. Yes, 20 people became millionairs but 2 MILLION PEOPLE LOST 1/2 of their savings at a time they could not afford it given these are not the well-headed high net worth. Hence, the need for a Senate hearing etc. I think its easy if one is not been around the losses and one has not seen that the forum heads have to contact admin to help some in the case of SXX or Debs etc. It brings a sense of reality but rather sad for the people who did not look more deeply.
CAN KDNC SP REALISTICALLY GO TO £10?
From my Wed 3 Mar 2021 post, I gave the financial data of a pure iron ore co listed in London which has a mkt cap of some £2.03 BILLION in which they own 100% of the mine.
if one looks at the NET SALES AND EBITDA FIGURES of 2020 vs 2021, the 2021 figures are marginally up or up but not exponentially by multiples. This is IN LIGHT OF HIGHER IRON ORE PRICE MIND UP for some time now since end of 20
I presume this was aimed at me: "I have not appreciated the comment today on this forum that I do not know what EBIDTA is - that was pretty out of character. I am not the type to say this and that about myself but certainly that was pretty not nice to say the least."
Apologies if I have upset you, that was not my intention. You say on multiple times to check and report errors with your posts. I spotted this phrase when glancing through "So, all I said to show him that modelling is only $61/t, lets say it is double to $120/t, then at max EBITDA will double and that also means a very reasonable figure". The word "max" indicated to me that you believed a doubling of iron ore prices would place an upper bounds on the EBITDA of double. i.e. in practice I thought that you thought it would lie somewhere between the same and double. Since this is not the case (it's likely 3.3x) I thought you would like to know, especially since a consequence of this is that rising iron ore prices is spectacularly good for the EBITDA metric all else being equal. :-))) Hopefully that explains why it appeared to me that you didn't appreciated the meaning of the E in EBITDA in this context. There's no easy way to teach someone to suck eggs. I could have stayed quiet, but what happens if you really didn't understand? Surely you would prefer I speak up?
Ob.
This is what I posted on the other board. It was a post intended to promote discussion and research, which it did. It encouraged @tradecraft to engage and share his spreadsheets and painstakingly decoded copies of the tables at the back of the JRP. I pointed out a few oversights and overall I stand by the possibility that at full Amapa production, and with a good wind (!), KDNC's share price could be £5 to £10 if iron ore prices are similar to today's. In reality they may be higher, they may be lower. We don't know. Did I mention that foreresearched is forearmed. ;-)
observer842 22 Jan 2021 17:30
===[
It feels like most holders think 40p to £1 is possible when we take 20% of Amapa - 40p if iron ore prices are low, £1 if they are high. I think it's worth considering what next. I'm beginning to think that if iron ore prices are similar to today's we might see a share price in the £5-£10 range at full production and assuming we own @49% of Amapa.
Discuss.
The more holders that are able to convince me with decent reasoning this is possible the more likely I am to hold on to all of my shares rather than starting to top slice on @20% news as I, as I'm sure many are currently planning to.
Calculators and comparators at the ready!
Foreresearched is forearmed. ;-)
Ob.
]===
P.S.
I have been to the London South East forum of this iron ore listed co with a mkt cap of £2.03 Billion to check THE P/E.
The P/E is 6.59 with a yield of 2.354% via a dividend.
P/E of 6.59 is very low compared to some co*s with P/E 10 say.
Given the HIGH PRICE OF IRON ORE of some $174 per tonne for 62% Fe iron ore and higher for 65%, this co*s data shows very much higher financial figures but even then, the MARKET is giving a much lower CONSERVATIVE P/E.
Why? I can only think that the market is cautious when it comes to iron ore and that the price have to been SOMEWHAT ironed out rather than take high figures or else the P/E could be 9 at least.
I havent checked other listed iron ore co*s as there are few pure iron ore co*s outside the majors.
There is a pure iron ore listed co in London. I wont mention the name as one is not supposed to mention the actual name of another co.
Here*s the data:
Share price £3.52
Mkt Cap £2.03 BILLION
2020 NET SALES: $1.604 Billion [2021-$1,813]
EBITDA $735million [2020] and $814 million [2021]
Pretax profit [EBT] $669million in 2020 and $814million in 2021.
N E T INCOME $540 MILLION IN 2020 AND $820 MILLION IN 2021.
Net margin: 34.2% and 45.2%. [Source: Market screener]
----------
So, the above shows that this co owns their own mine and to get to a mkt cap of £2.03 BILLION CURRENTLY, 3 Mar 2021, the co has to have the above earnings and net income etc.
One can use the above figures to see how much a £1.4 billion mkt cap has to earn just as an example by taking a proportion of simple school maths ie If a £2.03 Billion mkt cap has a net income of $540million in 2020 or $820 million in 2021, how much will a co with a mkt cap of £1.4 billion mkt cap have to have in net income to GET AN IDEA ONLY as to how much a co must earn.
I looked it up some time ago as to the tonnage and this co is doing far more.
So, that is the example.
IF ONE CAN SEE THE NET INCOME AS % OF THE ABOVE IE INTO 3 FIGURE HIGH MILLIONS, THEN YEAH, OK.
So, I now rest my case and peace out.
Certainly, I know how much bread cost LoL to provide an anology and the cost. Hence, I have looked up one producer listed on the London Stock Exchange.
However, kindly check and DO DUE DILIGENCE.
Wed, 3 Mar 2021.
This ends the convo.
contd
equals US$200 or £142 million!!!
Zamin paid US$240/50 million for 100% of Amapa when the valuation was either US$600m or US$400m I am not sure? I have not been able to ascertain the value at the time Zamin bought Amapa and the valuation then.
So, if KDNC were to sell their 20% share, it may or may NOT fetch US$200m or £142m [FX 1.4]. Why? There appears to be a discount to the valuation when Zamin bought Amapa and that is due to the port accident.
So, for some reason, the value of Amapa today, 3 Mar 2021 is US$600m and not the higher figure of early years prior to the port accident.
Anyhow, that is immaterial now as its history but suffice to say, it does show that the situation at Amapa is one in which it is right of KDNC to take a new valuation and to model it conservatively as per the official KDNC RNS.
Once the shipping of the iron ore starts and the money is BANKED, then comes the SCOPING STUDY and recommissioning which will take another 18-24mths after 18mths of shipping the stockpile.
So, only AT THE END OF 3.5 YEARS MORE can one then see the way ahead and FIRST REVENUES once the AMAPA MINE HAS BEEN ACTUALLY RECOMMISSIONED.
All this is therefore conjecture as KDNC is NOT AT THIS STAGE YET. Meanwhile, the market will not re-rate until there is shipping and then a re-commissioned mine. Kiran Mozaria did say that the share price ....think he meant an upward movement from what I could make out. So, YES, that is potentially possible.
Mr Mozaria once had to go to the MM*s to try to get them to value the JV*s from what I gather? I only heard this from the KDNC forum at the time. However, the market only valued KDNC on MARK-TO-MARKET ie the ACTUAL EMH AND BCN SHARE PRICE per the % KDNC owned. So, even at this stage, the market is giving MORE than mark-to-market for EMH % holding and 1% of Macarthur Minerals.
So, given this high £10 and beyond figure I heard on the main forum expounded by one eminent poster and further from Twitter, I thought its best to ASK HOW?
IN SHORT, I HAVE NOT TAKEN OUT MY MONEY TO PUT IN KDNC like some folks did in the days of REM and to which they lost 90% of it all because such HIGH SP FORECASTS have been expounded.
This should be openly discussed, more so, as FORMER REM*ers want to get back their capital and maybe a bit for the time they held REM, that*s fine. However, if they want to hold for the £10 expounded by an eminent poster [old-timer], then that is fine AS LONG AS THEY ARE AWARE IT IS PRACTICALLY OUT OF THIS WORLD - KDNC WOULD HAVE TO HAVE AN INCOME TO GET A £1.4 BILLION MKT CAP ie in the 3 figure MILLIONS.
So, that is the long and short of this story.
I have not appreciated the comment today on this forum that I do not know what EBIDTA is - that was pretty out of character. I am not the type to say this and that about myself but certainly that was pretty not nice to say the least.
So, I would like to express my say on the last part as above.
Ford12833
I must say I enjoyed your post as it summaries the past, current and the short term future.
Yes, today, KDNC is 19p and to £10 is a long way.
At 19p, the KDNC mkt cap is £28.37 million and at £10, it is close to £1.493 billion.
Given this is for Amapa iron ore project say, KDNC does NOT OWN 100% of the project. The JV with Sino means the JV owns some 99%. KDNC will or could own 20%, 27% and 49%. One does not know under what circumstances ie $$$ is needed to get to 49%.
So, from official RNS and Kiran Mozaria, CEO of KDNC in the most recent interview, he did not give out new revised figures so those stand from the KDNC RNS which I have quoted from. In fact, Mr Mozaria mentioned Amapa $600m - I take this to be the latest valuation as Mr Alan Green stated that a new valuation had been done.
I very rarely comment on figures and if I feel that they are too high I keep quiet.
However, in this case of KDNC, there is the history of REM plc wherein, at the height of the share price at 2.25p, Mkt Cap of £95m folks bought in after it fell to 0.9p. I checked the posting history of one poster who said he bought to see what price it was in the days of REM plc.
The Founder said at this party which I did not attend that REM could go to 5p - I cannot verify as I was not there but I am just giving this example. Well, one can see that EMH or BCN which owns Sonora has now a MKT CAP of £140m +, give and take BEFORE DFS [EMH] and BCN, BEFORE PRODUCTION. So, yeah, £95m x 2= £190m [2.25+2.25p = 5p] is within that sort of range given London listed lithium co*s are not mkt capped as high as Australia and sometimes Canada. So, for folks that bought at 0.9p, the MKT CAP need not be so demanding as the one or two who bought at 2.25p.
OK, as I said, once the TAKEOVER FELL THROUGH, REM could NOT own Sonora 100% but only had 30% of the 2nd stage in the JV. Morally speaking, if REM financed all the initial drilling, I think its fair if REM got some return?
Fast forward, the Founder appointed a metal trader on the board to take his place as Chairman. This new Chairman brought in Amapa. In a recent tweet, the Founder of REM did express that KDNC could get back to the old mkt cap. That is good if it happens as everyone can then recover their capital.
So, I am pleased about that - that is good of the Founder and current board of KDNC.
So, getting rich was NOT promised at all from what I have seen on Twitter or from the RNS?
Just imagine, when I read on the main KDNC forum that KDNC could go to at LEAST £10, I nearly fell OFF MY CHAIR. This effectively means that if one bought KDNC today at 19p, one would pay about £190 plus commission and take in a bit more for the spread. SO, 1000 SHARES AT 19P PLUS COMMISSION MAKES IT SAY £200, THE RETURN ON A SHARE PRICE OF £10 FOR KDNC WILL COME TO £10,000!!!! Anyone would have fainted at that given KDNC DOES NOT OWN 100% OF AMAPA.
Say 20% of Amapa at US$600M value [K.Mozaria*s figur
Hi All
Lots of too and FRO.
Everybody having input into their view.
Glad all have retired with heads still on, this needs to be the friendly site.
Lots to look forward too.
Lots of REM ( Me included ) thought we had the golden ticket many years ago.
I understand the cautious side, staying grounded.
19p to £10 - not sure what to say here
AS for REM day share holders being happy with a £1 , I think that's because a lot are still underwater.
Good luck to all share holders.
Richard
I would have thought that Kieran will release some update figures when the settlement comes in . Let’s see
Guys,
I have just got my wifi filled.
EyeGuy
Observer842
Let*s all call it a day. It is tiring for everyone. Suffice to say, if the real figures for Amapa come in at X or Y per one*s expectations, then, fine.
Lets CANCEL all the CALCULATIONS AS FROM THIS DATE, Wed 3 Mar 2021.
KDNC has given the OFFICIAL MODEL and we go with that for Joe Public investing. If they think that the iron ore prices are going to be sky high like today at $174 per tonne, that*s up to them into the whole of the mine life which in total will be something like 17.5 years from now.
Fair enough?
All peace now.
News, Wed 3 Mar 2021.
I wonder if the 0.3Mt 62% is a typo in the RNS. It was 0.9Mt in previous RNS's and the January corporate presentation. I suspect on balance it is a typo. The JRP (official court document) used 0.9Mt 62% Fe and 4.4Mt 65% Fe
news. that is untrue as my calculation which I used and you commented on had the correct workings out for the mine production and the stockpiles.
(assuming mine production 4.4MT @65% and 0.3MT @62%)
and ore stockpiles of 1.39 MT @ 62%
Ill leave it there
peace out
Eyeguy
That*s better. You now say that iron ore price for 62% fe is for the stockpiles.
62% fe is around US$174 or so. Stockpile was supposed to be shipped out in the next 12 mths but the latest maybe 18 months from recall but check.
THAT IS OK - just for the stockpiles. No problem with that. ON THE SAME SHEET THEN.
However, I caveat that with IF the iron ore price holds as always.
----------
observer842
OK, eyeguy has now come to being conservative ie the price of 62% iron ore at $174 or so per tonne rather than take everything at 65% fe at $200 per tonne.
So, peace out. All is well.
Hope for the best now ie the iron ore is shipped out when the agreement is finalised and no need for KDNC to go back to Court to enforce or rather if folks dont allow shipping, it could be contempt of court ie when a court makes a judgement and it is not followed by the other side, it is that. Appeal to the Supreme Court and Minister has been denied or that is what I read which is in Spanish ? Check anyway as translations into English may NOT BE CORRECT. ALWAYS, WAIT FOR THE RNS - THAT IS OFFICIAL.
Thanks all.
News, 3.3.21
observer82
It is not wrong to use a hypothesis WITHOUT doing DETAILED CALCULATIONS of 2x rather than 3x.
No one at this stage knows if the cost is fixed.
Check with KIRAN MOZARIA AND IF HE AGREES, THEN COME BACK TO ME WITH THE EMAIL.
Over and out.
News - you seem like a nice guy mate but you are plucking things out of thin air.
My figures are assuming the iron ore price stays like it is using the correct pricing of today.
When Kiran released the figures, the iron ore price was $61 ish per tonne. So they were relevant at the time. It is more relevant now to use a higher price. Certainly for the shipments it will be good as they will be getting 1.39 million tonnes of the 62% fines shipped over the next 18 months.
@news. I don't know why you seem to getting so worked up. IMHO it is completely reasonable to make projections based on whatever price and assumptions you want to, and especially today's spot prices. No one in their right mind thinks it will stay exactly the same - it will go up, and it will go down. Up, down, up down. LoL. State your assumptions. Show your workings. Allow them to be challenged. We all learn. ;-)
News - why do you say there is no point in using my figures.? I have worked out the revenues based on the 4.4 mt @65% and the 0.3 mt @ 62%
Ie the correct pricing based on latest production guidance/mine plan which has been released by RNS
Yes, EBITDA is Earnings BEFORE TAX, dep and amortization.
Revenue is sales.
Revenue minus cost etc = Gross Profit in the old days known as.
So, I never said revenue is EBITDA.
How does a hypothesis become an issue that needs correcting?
Double is better than TRIPLE for conservative figures. I believe that fe 62% and fe 65% is a matter of more refining or that is my perception.
So, just taking a straight line 2x rather than splits and making it 3x, how can that be wrong?
Obs, lets just leave it.
Eyeguy wants to insist and I was trying to put a bit of sense into his figures because iron ore is NOT GOING TO BE US$200 PER TON GOING INTO THE NEXT 18 MONTHS OR NEXT 3.5 YEARS OR 14 YEARS INTO THE WHOLE LIFE OF MINE.
Its just simply WRONG to do so and that was all I was telling EYE-GUY.
HYPOTHESIS it is called to illustrate ie for me to illustrate to Eyeguy that it will not be according to conventional analysis to extrapolate US$61/t from KDNC MODELLING INTO US$200 per tonne iron ore price currently [I only see US$174 or so per tonne] into the NEXT 3.5 YEARS AND INTO 14 YEARS IS JUST SIMPLY WRONG and will cause a LOT OF PROBLEMS if people sink their savings on those types of figures.
A recession hits and there will be a hit to iron ore prices as it is sensitive to the economy.
How can ANYONE SAY THERE WONT BE A RECESSION IN THE NEXT 17.5 YEARS ie Amapa life span + stockpile period, scoping study and re-commissioning.
OK, that*s all. I have made my point.
I am sure you know what happens if we go to and fro.
I AM KEEPING MY LONDON SOUTH EAST MEMBERSHIP so I will not go to and fro.
IF AND WHEN KDNC ISSUES AN RNS TO SAY THAT THEY CAN GUARANTEE IRON ORE PRICES INTO THE NEXT 17.5 YEARS IE LIFE OF AMAPA, THEN I WILL TAKE NOTE, otherwise, I go with what KDNC has put out in the RNS, official regulatory news.
I KNOW FOR A FACT, KDNC CANNOT ISSUE THAT TYPE OF RNS AS THE ADVISOR WILL NOT ALLOW IT IE IT IS FORWARD GUIDANCE.
THEREFORE, EYE-GUY*S $200/t into the foreseeable future is WRONG? This is NOT OFFICIAL that iron ore prices that are at the height is EXTRAPOLATED INTO THE FUTURE??
So, ok, that*s all.
I PLAY FOR SAFETY and BEING CONSERVATIVE - THAT IS THE RIGHT THING TO DO AS IT IS FROM KDNC RNS AND CEO OF KDNC.
I am not going to be convinced of wild figures INTO THE NEXT 17.5 YEARS. Fair enough?
If the KDNC SAYS SO, THEN EVERYONE IE SHAREHOLDERS WILL TAKE NOTE - NO CO HAS EVER DONE THAT AND HENCE WHY THERE IS NO KDNC RNS TO SAY SO.
@news.
" I see you agree with my iron ore price at the moment of US$174/t and NOT $200/t per eyeguy."
You are both right. 62% is around $174/t, and 65% is around $200/t. The majority of what we will be selling is 65%.
"As for the BREAKDOWN to show me that it is 3x rather than 2x, well, of course I have NOT taken the stockpile etc at their different figures. After all, it is hypothesis, and UNDER-CUT OF FIGURES that I showed of 2x is better than 3x."
We can leave it at this, but I encourage you to understand what EBITDA means, and how doubling of sale prices does not lead to doubling of EBITDA. Simply put if you sell something for 100 and it cost you 80, then you have an EBITDA of 20. If you double the sale price to 200, but your costs stay the same, the EBITDA has increased 6x to 120. Someone please correct me if I'm wrong!
Ob.
News. The iron ore price you use is for 62% fines.
The seaborne iron ore price for 65% fines is $200
Over 4.4 million tonnes per year - equating to 93.6% of the iron ore produced will be the higher grade 65% so can you let me know why you are using. The lower grade prices?
@observer842
Yes, I have now seen your answer on Mon 14:38 - I said I wasnt going to reply anymore on this forum as there is no point with Eyeguy*s figure of $200/t seaborne iron ore price.
I see you agree with my iron ore price at the moment of US$174/t and NOT $200/t per eyeguy.
As for the BREAKDOWN to show me that it is 3x rather than 2x, well, of course I have NOT taken the stockpile etc at their different figures. After all, it is hypothesis, and UNDER-CUT OF FIGURES that I showed of 2x is better than 3x.
My private thoughts are: Zamin was a metal specialist and his fortune got affected, lets put it mildly so after this lesson, I am fully awake to iron ore prices lets say.
OK, my wifi is running out so I have to get topped up.
Sorry, for no replies.
NO POINT GOING TO AND FRO.
PUT THOSE FIGURES OF TELEPHONE NUMBERS TO KDNC - Eyeguy etc and IF THEY FORMALLY AGREE THEY WILL PUT IT IN AN RNS. THEN I WILL TAKE NOTE. Otherwise, all these back of envelope figures is no GOOD, to EXTRAPOLATE HIGH IRON ORE PRICES FOR THE NEXT 17.5 YEARS.
News, Wed 3 Mar 2021.
@news. You ask for us to check your posts. I'm checking when I can. This is simply not the case:
"So, all I said to show him that modelling is only $61/t, lets say it is double to $120/t, then at max EBITDA will double and that also means a very reasonable figure"
It is EARNINGS, not REVENUE before interest, taxes, depreciation and amortization. Earnings include OpEx. By my estimates if prices doubled (x2), then EBITDA would 3.3x
Ob.
@observer842
All I said to EyeGuy is this:
From KDNC*s official RNS, they model EBIDTA to be US$61/t.
From $61/t for iron ore, they gave potential EBITDA.
This is OFFICLAL KDNC MODELLING.
EyeGuy insists it will be US$200/t for iron ore sea-borne and implies this going forward?
So, all I said to show him that modelling is only $61/t, lets say it is double to $120/t, then at max EBITDA will double and that also means a very reasonable figure, AFTER TAX, not BEFORE TAX.
That is because TAX HAS TO BE PAID BEFORE IT COMES BACK TO KDNC IN THE FUTURE as a distribution.
So, from this this hypothesis, comes its wrong ie hypothesis?
Hypothesis, is a reasonable $120/t which is double of $60/t modelling vs $200/t from EyeGuy but from what I have seen it is $174/t.
So, how is this hypothesis to show that even under a reasonable assumption of UNDER CUTTING current iron ore price of $174 or eyeguys $200/t wrong?
HYPOTHESIS IS JUST HYPOTHESIS - $200/t into the NEXT 17.5 YEARS IS PLAIN WILD to anyone - even Goldman Sachs would find it an eye-opener ie that type of analysis???
My word is all I can say.