Update is needed on several issuesPhosphate rock is sold at US$120 to $130 per tonne, Morocco, FOB, as of October 30 (Source: https://www.stonegateagricom.com/s/Home.asp). To get the rock to ports in Brazil, then to the Itafos plant, how much additional logistical cost would be incurred? Let’s assume $40 per tonne. MBAC reported in its Q2 statements that it incurred $2,497,000 as operating expenses alone (Source:
https://mbacfert.com/files/doc_financials/2014/Financial-Statements%20Q2%202014.pdf, page 3). Let’s assume the same operating expenses and the sales of 75,000 tonnes of SSP per quarter (25k per month), then operating expense per tonne would be $33. If the company still sells SSP around US$200, how exactly does the company expect a positive cash flow, as the selling price barely covers the rock + delivery + operating expenses? They still need to purchase sulphur, which is way more expensive now. Furthermore, the company incurred more than $4.5 million other expenses in Q2. When the company declares commercial production, additional depreciation expenses would be added as well.
Rock purchased should be of higher grade of P2O5, compared to the content of P2O5 of SSP; so raw feed rock cost can be reduced.
The company needs to provide an update on three key issues asap. First, provide a detailed calculation on cash flow generation/estimate. Second, provide information on its own phosphate deposit. Third, its production process in October.