4th Quarter Estimated Income before TaxesI have tried to estimate the 4th Quarter Income before Taxes in a very simplistic manner (ignoring the changes in Lead and Silver Voulmes and Prices). I give below my estimates. If someone can improve on these estimates, I would welcome the their inputs.
2020 Zinc Price | Spot ($/MT) | Spot ($/lb) |
December | 2,782.36 | 1.26 |
November | 2,669.69 | 1.21 |
October | 2,441.55 | 1.11 |
4th Quarter Average | | 1.19 |
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September | 2,450.50 | 1.11 |
August | 2,406.83 | 1.09 |
July | 2,162.24 | 0.98 |
3rd Quarter Average | | 1.06 |
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Zinc Payable Production in 3rd Quarter (Mlbs) | 74.1 | |
Zinc Payable Sales in 3rd Quater (Mlbs) | 65.3 | |
Zinc Payable Inventory Build-up in 3rd Quarter (Mlbs) | 8.8 | |
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Zinc Payable Production in 4th Quarter (Mlbs) | 74.0 | |
Expected Zinc Payable Sales in 4th Quarter (Mlbs) | 82.8 | |
3.75 Mlbs X 3 months at fixed price of 1.10 | 11.3 | |
Balance Expected Zinc Payable Sales in 4th Quarter (Mlbs) | 71.6 | |
2.5 Mlbs X 2 months at fixed price of 1.12 | 5.0 | |
Balance Expected Zinc Payable Sales in 4th Quarter (Mlbs) | 66.6 | |
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3rd Quarter Gross Profit based on Zinc payble Sales of 65.3 Mlbs | $ 3,288,000.00 | |
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Projected 4th Quarter Gross Profit if Zinc Price had remained at 1.06 | $ 4,169,163.86 | |
Additional Gross Profit in 4th Quarter on Sales of 11.3 Mlbs @ 1.10 | $ 450,000.00 | |
Additional Gross Profit in 4th Quarter on Sales of 5.0 Mlbs @ 1.12 | $ 300,000.00 | |
Additional Gross Profit in 4th Quarter on Sales of 66.6 Mlbs @ 1.19 | $ 8,651,500.00 | |
Cost of Put Options for 6.25 Mlbs of payable zinc @ $0.03 per lb | -$ 187,500.00 | |
Expected Gross Profit for 4th Quarter 2020 | $ 13,383,163.86 | |
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Expected General and Administrative Expenses | $ 1,600,000.00 | |
Operating Profit | $ 11,783,163.86 | |
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Expected mark-to-market Gain on Sales of 3rd Quarter | $ 2,509,155.55 | |
Expected Interest | -$ 2,500,000.00 | |
Income before taxes | $ 11,774,008.31 | |