You know that is funny. When we moved out to the East Coast, drinking starts at 5 PM and then you are not considered a drunk. Now that I am back on the West Coast, drinking starts at noon. Back in NC you can't even buy beer on Sunday before noon and here in NV the drive in liquor store never closes. Back in NC, you can reduce you cost by going with white lightning, here in NV you just have to buy 6 bottles or more. I see more old people in NV, or maybe they just look that way. 1 hour 45 minutes to noon!
CLF currently has their winter inventory stockpiles in place. The should now produce the right amount of ore to meet sales, no overtime or added cost!
Personally, I thought the cost would have been more than $4 million. I feel that upper management and board members need to pay back 10% of their income over 10 years to pay for this cost, just like a student loan.
with the wide swings in CLF's price, don't know if I should go with the top shelf or the stock bourbon. Or maybe I just can't drink this early in the morning, just doesn't mix with my Corn Pops.
The only thing that jumps out is the build of US iron ore inventories to $385.9 million from $105.1 million at 2013 year end. Really need to see that number come down which will put cash into CLF's account since most of the cost have been written off with work in progress only accounting for $24 million of that amount.
I really thought this inventory level would have been worked off in Q2, I was wrong but CLF will work it down to their historical levels of $100 million before year end.
The Chinese steel industry and iron ore market is far different than the US market and BHP's model does not work in the US. BHP and RIO is attempting to take out the smaller iron ore producers in China and Australia where their cash cost is above $90 a ton. Their attempt will keep iron ore at $100 a ton in the short term, but this can not be maintained for long and iron ore will return to the $120 to $130 range. The very same thing happened in the oil market and oil prices are more a factor of cost of production than it has to do with supply and demand.
They were withholding things last call, made them look stupid. This time they are not holding anything back.
I was very impressed with the cash cost at Bloom Lake when I reviewed the earnings, moving to $70 is very much achievable.
Now all they have to do is announce the sale of Wabush and that will be the end of the shorts.
All of you that voiced concern need to review IRS section 197. Then pull up CLF's past income statements and compare DD and A charges since the large impairment charge CLF took at the end of 2012. Then compare those charges to the tax benefit.
Shows you how little you understand about accounting. The tax benefit offsets a charge against earnings.
The tax gain reflects the increased amortization charge on the other end. They wash each other out. It is simple, past impairment charges are carried forward causing the increased deductions that save taxes, hence the tax gain. You can't say the tax gain should be factored out without then reducing the charge to earnings on the other end.
From current press release:
"Cliffs Natural Resources Inc. (CLF) today announced that Glass Lewis & Co ("Glass Lewis"), a leading proxy advisory firm, has issued a revised recommendation and now recommends that shareholders vote "FOR ALL" of Cliffs` director nominees on the WHITE proxy card in connection with the Company`s 2014 Annual Meeting of Shareholders to be held on Tuesday, July 29, 2014."
Casablanca has lost their support with the institutions!