Iron Ore Price, page-14892

What's the mysterious fair value you expect?

Let's say I -or you- have a house.

It's worth $3M
The bank owns $2.5M
My (your) equity is $0.5M

If I pay down $100K of debt tomorrow, the house still has an (enterprise) value of $3M, but the equity (share price) is now worth $0.6M. The house is still the same house it was yesterday. The debt for equity juggle has no bearing on it.

FMG some time back traded at a discount as it was in serious risk at going out of business giving it's low margins (discounted ore and high unit cost), high debt and lack of diversification.

The house analogy would be a home owner who had lost their job and couldn't service the debt. The market is good at extracting value from a forced seller - the home owner would be very lucky to get the $3M valuation in these circumstances. A willing but not anxious buyer would get fair value ....

That time, and cost picture for FMG is well and truly past.

The share price is indifferent now to whether FMG holds cash, or uses that cash to pay off it's manageable lower debt.

There isn't some mythical fair value uplift to be achieved by FMG by paying down more debt

FMG comes down to a view on iron ore price which in turn comes down to expectations of where supply cost meets demand.