RE:RE:Breakeven price of copper = $3.59Cognition777 wrote:
Lotsa variables in there, Alf, that others have mentioned.
- sold 2M lbs less copper than they produced = +$8.5M (they didn't sell 34M as you stated)
- sold 50k lbs less moly than they produced - +$1M
- bond interest is semi-annual, so half of this quarter's payment was accrued last quarter = +$9M
- net "unrealized" loss on foreign exchange = +$2.7M
those adjustments would have basically doubled their earnings, and break even would have been (using your method) $43M/32.4 = $1.33 profit per pound... $4.26 - $1.33 = $2.93.
and besides, with the puts they hold, their minimum sale price for Q4 is $3.74 (I think) and $4.00 for the first half of 2022...
This is exactly correct. That unsold copper is sitting in inventory and will turn into cash likely in the next quarter. It might be smart to sit on some inventory as the market rises. Accountants will always use those loss carry forwards for tax purposes. It produces more of a loss on paper but keeps cash in the bank.
I believe they have spend $30 million or so thus far on the Florence CAPEX, that comes off the $230 million estimate. They now have nearly $300 million in liquid cash plus the revolving credit. That is finished Florence plus $100 million.
This is a very sweet position to be in, and there is more good news coming in Q4.