Jobs added in June are going to closer to 300,000 than 200,000 reflecting the delay in hiring after the extreme winter.
Not in Q2, they just announced it and it takes 60 days after the announcement that the mine is shut down due to labor contracts. Look for cost to hit in Q3 or Q4.
As an example, let's say CLF gets $1 billion buy in to Bloom Lake. If they take that $1 billion and pay down debt, they will reduce their interest expense by $50 million a year. They will then reduce their loss exposure on Bloom Lake. I guess I just don't see business as usual. It really sounds like a good way to go instead of selling an asset at the bottom of the market.
They borrowed that money to pay for the inventory build that always happens in Q1. But with the extreme weather conditions, they were not able to ship as much as they planned and built inventories higher.
If they sell off just half of their inventories, they would have $300 million in cash that they paid to produce in Q1. This is why I think they will pay off that $180 million.
Casablanca and their supporters are covering their short positions. Strong up move with spot iron ore down and many of the miners are negative. Now the volume is holding above 30K a minute!
There is a settlement between CLF and CAS that will be coming out soon. Your first clue is the banks willing to work a new deal with CLF, you think they would go through the motions if CLF's management was out of the picture in a month. Next will be an announcement of a JV with Bloom Lake.
Leverage is needed with these falling iron ore prices. After reviewing past income statements, CLF performed the best when their debt did not exceed $1.6 billion and their annual interest expense was around $62 million a year. I believe that is a target Halverson is shooting for and wants to pay these bonds off from cash.
Halverson did state why, he is committed to reducing their net debt. He isn't going to pay off the bonds since they don't mature until 2018, he is going to build cash to maximize leverage and then pay off the bond when they mature from cash.
We will find out soon with Q2. I am expecting them to pay off the $175 credit line debt and push cash on hand higher. This will show the market how committed they are to enhance their balance sheet. All of this rest on their ability to reduce their inventory on hand.
What it means is banks and companies are now willing to work with CLF knowing that the current management is going to retain control of the company.
to find exactly what CLF paid for their chromite properties, I discovered that CLF's current cash and available credit lines is much better today than in the past. At one point in 2010 CLF's cash on hand was over $1 billion, but that was after selling bonds which was later used to buy Bloom Lake.
This strength in their balance sheet is the reason they got the change in their current credit facility.
According to the 2010 CLF financial statement they purchased the remaining interest in Freewest for $12.8 million in cash and 4.2 million shares of stock at $41.22 a share for a total of $185.9 million. And they purchased Spider for $108 million.
According to Mining Weekly the cost to takeover Freewest was C$118 million. And according to Proactive Investors, CLF release had the price at C$150.6 million.
Basically, the BC group wants the same deal the Ontario First Nations got with the Ring of Fire… Rea, former Supreme Court Justice, worked out a great deal for First Nations over the Ring of Fire and it is being used as a model for other holdings past and present.
I am not underestimating anything, just releasing information that has been presented by people that are directly involved with this situation. You released information about the BC lawsuit and you implied it has a direct impact on the Ring of Fire… just need you to present that concern by people that are directly involved with it. Sorry about being a jerk about it, after all this junk with Casablanca, I am not taking the word of anyone on this board unless it is backed up by some legitimate source.
Rea was acting for First Nations and negotiated out the settlement between Ontario and First Nations. The BC case is not the same situation as the Ring of Fire area… just releasing information that has been presented. If you can find information that directly relates how this will impact the Ring of Fire, I would be interested in that.