Ann: June 2014 Investor Presentation , page-14

One of the reasons I originally invested in AGO was because they had a quality management team that did what they said they would. They have now achieved the first stage of their plan (Horizon 1) and are to be congratulated on that.
However, the share price has been trashed and investors who funded this have been damaged. It is time for management to produce a strategic plan for giving shareholders their due return for backing AGO to achieve that success story so far. After all, if they can achieve Horizon 1 with so little return for investors, why bother with Horizon 2?
I suggest a 3-5 year shareholder return plan that management can commit to just as they commit to their 3-5 year mine development strategic plan.
I think that AGO should come out and say that they believe they can comfortably achieve (on average) a certain positive cash flow over the next few years - say between $10-20 per tonne. Part of this should be committed to increasing shareholder value by increasing the dividend and instigating a long term share buyback with a goal of buying back x% (maybe 30%) of the company. Maybe that x% can be on-sold at a profit to a (Chinese?) partner in the future instead of just cancelling the shares.
I think a definite commitment to something like this is required, and is the only thing that will create a re-rating of AGO in the current environment, other than perhaps a deal to open up Horizon 2. All the big miners - BHP, WPL, RIO are all talking capital management because they realise it is time to reward their shareholders if they want to keep them. AGO is fortunate to be in the position to do this also.
I have a concern about a focus just on Horizon 2. Namely, will the market of today reward AGO for committing to a long term plan for creating even more IO supply, even if it does guarantee us the extra port space? I suspect that the re-rating will not be a big as you might think as it will not answer the critics who say the IO oversupply, combined with the low IO price, will ultimately sink AGO!
I agree that we need to guarantee to port allocation, but I think that Horizon 2 should only be done with a partner who provides most of the funding, thus allowing the capital management measures mentioned above to be a 3-5 year commitment. The market WILL listen to a capital management plan that provides some certainty of a return to investors.
Also, if the Chinese are so keen on IO then we should be welcoming them as a partner and a potential future owner if that is what is required to maximise shareholder returns.
After all, this is a capitalist society and this company was built with shareholder money with the goal of creating shareholder wealth.
I remain a long term holder having owned AGO since 2007.