Member Info for observer842

I've got more evidence than this, but have a read of this for starters:

"The Platform for Cooperation on Tax" (2017)
https://www.un.org/esa/ffd/wp-content/uploads/2017/01/tc-info-gaps-prices-of-minerals.pdf
===[
Box: Published Prices and Contract Prices

In the financial press, the iron ore price is frequently quoted as referring to a dry tonne of iron ore fines containing 62 percent iron (“fe”) delivered by sea to Qingdao port in northern China.

However contracts are frequently concluded using different price metrics, such as US cents per metric tonne unit (mtu) of ferrous content. Concentrates for example are frequently priced on this basis. This means conversions may be required to compare such contracts with published “iron ore” prices.

Take as an example, a contract for 50,000 tonnes of concentrate with 64 percent iron, priced at 70.31c/mtu also going to Qingdao on the same delivery terms.

After converting the price to dollars, it is adjusted by the Fe content: 0.7031*64 = $45/tonne (since in this case there are 64 units of iron in each 100 units of the concentrate). Depending on how it is expressed in the contract, this may be the price per tonne including moisture (“wet” tonne). To compare against the published dry metric tonne price, the price needs to be adjusted to remove the weight of moisture. Continuing with the example, For example, if the shipment had 8 percent moisture, the price is adjusted as: $45*0.92 = $41.4 per dry tonne.

For the purposes of freight, wet tonnes are the relevant metric since this is the weight that must be physically transported (ArcelorMittal, 2016).
]===

By the way, you wouldn't believe just how much I'd love to be proven wrong on this...

Oh yes you do. The 62% price which is currently a little over a $100/t is per mtu.

@Bannor. I did wonder if you and @tomcat and the other regulars didn't believe me when I discovered this in January. The evidence is pretty compelling. 65% Fe costs more than 62% Fe as there is a greater demand for purer iron ore.

I wonder if anyone on here can help me answer this question:

If I have a 45kt vessel laden with iron ore fines @62% Fe, and as we know 62% Fe is priced around $100 at the moment. What would be the approximate gross revenue from its sale? Is it:

a) 45kt * $100/t = $4.5m
b) 45kt * $100/t * 62% = $2.79m

Ob

@Huinhwa and @Bannor. I am very confident about this.

By the way, I like your conservative explanation of why you used 1.3 rather than 1.39Mt, and it's not something I've really considered before. But now I think of it, it seems a bit unlikely we'd lose as much as 90kt of ore sat at the side of the road, or lying around at the docks/bottom of the boats/sea - but you are free to round or discount however you like! LoL. The 1.39Mt is only an estimate after all, and perhaps transport losses around the 6-7% mark is normal for iron ore? Though if asked I would have guessed <1%.

@Huinhwa "Gross Revenue 1.3 MT *100 (CFR price) = US$130 M"

Thanks, but let me stop you there. The 100 price is per tonne of contained iron, therefore since this is 62% grade you need to multiply your figure above by 62% (0.62). Please do your own research on this and whether you agree or disagree I'd appreciate if you report back here! :-)

Ob.

By the way it's 1.39Mt at the port with average grade of 62.12%

@Huinhwa can you work us through the details of one of your rows? Say the $100 one? Also, you seem like someone who might be able to do the maths for:

@Kiran: "And in terms of pricing? Well look, it's 45,000 tonnes a ship, at currently $101 at 62%, we can do the maths"

I wonder if @Kiran's still going on the Handymax prices of last summer when they spiked to $20k/d was it?

@HeidHoncho In this particular instance @Kiran was mentioning $101/t Fe @62% and in the same breath $27/t OpEx associated with shipping, therefore (fortunately) we need not complicate matters by having to consider the detailed nature of the journey. But @Bannor might get kicks out of doing that anyway. LoL :-)

The vox one in this thread, and the two youtube ones I shared in the past few hours.

So did I @Frankie! That's why I don't understand the costs, I was considering a worst case empty return scenario.

Frankie, you need to watch/listen to 3 interviews now! Keep up! LoL. We intend initially to handymax (45kt) the ore all the way to China from Santana public port. Unless we get a better offer of course! :-)

According to the baltic briefing Handysizes are in the $4,000's at the moment, call it $5k per day. If we are shipping 45kt and it costs $27/t this implies a round trip (returning empty), including all loading/unloading is:

(45kt * $27/t ) / $5k/d = 243 days.

That sounds way too high. Perhaps I've misunderstood? Yet again. Or he's using a figure considerably higher than $5k a day?

Ob.

@tomcat: Per ship: @$100/t 62%Fe gross revenue is:

100 * 62% * 45kt = $2.79m

Net shipping @$27/t is:

$2.79m - $1.215m = $1.58m per ship.

All 1.39Mt = $48.8m

Ob.

Did we miss this one? I must have done as I've not heard of our friendly investor/creditor RiverFort before.

"RiverFort Global Capital Webinar Featuring Cadence Minerals plc" (20 May 2020)
https://www.youtube.com/watch?v=MgvMSxoJ8R4

He suggests shipping to China is $27/t at the moment, which is worryingly high and explains a thing or two!

Before anyone has kittens, that's an equity raise in the Amapa project, not KDNC. Though presumably we may choose to raise $24m if our share price can support it at the time. :-)

Regarding the $24m equity raise we discussed at length a few months back around 9 mins in: turns out that if we don't partake to take us to 49% we still keep our 27%! I can't remember who believed that would be the case, but I don't think it was me! Lol. :-)