They have cash coming in all the time from continuing operations, however they also have an untapped credit line if needed. But if you look at my projections, it is over the next 6 months and they will build cash from operations, tax credits and other sources where they can easily build $200 million without taking their cash position below $300 million.
Also, it is interesting that their total debt when LG took over was $3.9 billion, a $1.2 billion reduction in just one year when iron ore prices were at a bottom. Pretty darn good!
Total debt that they pay interest on is $2.7 billion. $907 million is secured bonds and the balance of $1.8 billion is unsecured bonds that have a current market value of approximately $900 million. So over the next 6 months CLF could take $200 million from cash, $300 million from inventory sales and $400 million from asset sales and eliminate all of their $1.8 million of unsecured debt.
All of this is on their 10Q, page 14, factoring in the $124 million bond purchase.
Really need iron ore to be $70 which would put pellets at $100. CLF would be able to sell pellets at $85, undercut the market and make good margins in the US.
release information on coal mine sales, Quebec's bid on rail and port assets and status of their Nucor deal. Any one of these into the mainstream media will take the stock back up over $5.
China first needs to clean up their air, otherwise they will be spending their entire GDP on healthcare in the future.
In the past option expiration on Fridays has kept the price below the strike price, so it could settle in just below $4 today. If it closes above $4 on good volume, it would indicate short covering is taking out the normal manipulation by option traders. To buy or not, that is a decision you have to make.
They can buy the 2020 bonds and hold them. If they don't have cash in 2018, they can always sell those 2020 bonds back into the market.
Close to 2 million shares in the first 45 minutes, this is what a short covering looks like. Get the announcement about an asset sale and we will see what a short squeeze looks like.
Plus if you are a metallurgist, then you will full understand the importance of CLF's new low silica pellet to the domestic market.