Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
No StarBright. Why would we pay for the clients ship that they are brining in?
Bill also mentioned somewhere else that we just pay for the processing fees at public facility at Utah Point Berth.
Thanks again StarBright. You will make me very rich :)
Negative on here negative in ggp go on you shorter u, well you sound like hh or starbright
Max, thanks, but I'm not StarBright.
What Bill means by fees is ambiguous - could be port processing fees, could be the whole shipping cost. It's just not clear.
Either way, the point about the incoterms having to be consistent across both price and cost still holds.
StarBright. No Bill was referring to the fees as the processing fees of Utah Point Berth.
Listen and pay attention:
https://youtu.be/Wv2EtlNjglQ?t=1018
The client uses their own ship!
I knew you were after the DSO from the very beginning. But thanks for that, since you switch my focus away from silver to DSO.
Max, please listen again to that section of the presentation (17:13 - 17:25):
https://www.youtube.com/watch?v=Wv2EtlNjglQ&t=1033s
“The client brings in their ship…we pay the fees and off it goes”
There's no mention that the client pays for shipping.
Regardless, whether or not UFO pay for shipping will be determined by the incoterms of the transaction. Either the sales price and cost will both be FOB, or they will both be CFR. At present, people here are quoting CFR sale prices and FOB costs, which is misleading.
Shorters getting worrird hey.
Hi StarBright. Why do you assume we will be selling to China? Fenix has an off-take agreement with Sinosteel.
In the Investor Webinar Bill was saying we take it to port to Utah Point Berth, which is a public Berth, pay the processing fee and then the buyer bring in their ship and pays for the shipping cost.
The buyer brings in their ship, whichever one they want whether it’s a 100,000t or 500,000t ship it’s up to them.
Anything over $60/t is pure profit for UFO.
Plus DSO sells for a premium.
Even if we make $10/t, that is a very significant profit for a junior company. Silver miners are lucky to make $10/oz. Hence why the market will start attributing significant value to our Resource (previously there was almost zero value) and the share will keep getting re-rated.
Plus 10.4M tonnes is only the tip of the iceberg. Only 1/10 of Hanc0ck has been covered!
Then add Brockman.
Plus EH & Munni Munni etc.
The point is, in order to secure the sale price of, say, US$122.36, you have to both
1. mine and transport to Port Hedland, US$60
2. transport from Port Hedland to China, US$20-34
The iron ore price is a CFR price (cost and freight) whereas the operations cost of US$60 is an FOB cost only.
Recommend googling Incoterms.
Not sure what you on about mate.
Market prices:
Iron ore: $117/t
Iron ore 62% fe: $122.36
Hanc0ck
FOB costs are $60/t
That is 100% margin. Hanc0ck is more than profitable.
Add to that: increase in further tonnage and increased iron ore price which previously spiked to $230/tonne.
Just had a scour on the web and the October price per wet tonne was $19.32 and expected to fall-according to the pundits!
Source S and P Global-Market Intelligence.
One point I haven't seen mentioned in other threads: Hancoeck costs also need to take account of Freight from Port Hedland to China.
The Operating cost of US$60 quoted in the RNS is an FOB cost. That is, the cost up to and including the loading the goods onto the vessel at the port of departure.
However, the Iron Ore price of US$123 is a CFR price. That is, the price at the destination port in China.
So there is a missing piece: the cost of freight from origination port to destination port. For Fenix, this was a cost of US$34 in the last quarter. This may be on the high side, so perhaps a cost of US$20 would be a reasonable amount to assume for UFO.
This would increase operating costs by 33% from US$60 to US$80.
It is notable that an assumption for Freight costs was excluded from the RNS, which might have precluded the presentation of an NPV for the project.