RE:RE:RE:RE:Iron ore numberskha341 wrote: Let’s assume the following:
Minimum volume = 500,000T / year
Discount = 40%
Average Spot Price over the year for 58%Fe = US$150 / T
Largo’s Profit Margin = 85%
Then
Our Annual Revenue = US$150 x 500,000 = US$75M x 60% = US$45M
Our Annual Profit = US$45M x 85% = US38.3M or US$0.59 / share from the sales of iron ore alone.
(Note: in 2020 Largo had a Net Income of US$6.8M)
In this game our huge 2,000,000 T stockpile would be cleared in 4 years
If a similar deal was announced a 20% jump in sp would be a gross understatement.
Actually in this scenario we would not even have any Selling expense at all therefore our profit margin would be almost 100% . Let's say 95%
Our Annual Profit = US$45M x 95% = ~US43M or US$0.67 / share from the sales of iron ore alone.
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