merrill lynch valuation at 9.80, page-13

This post is in response to Riddic

Riddic made some unsubstantiated claims about the infrastructure arrangements and that MMX and Mitsubishi was merely "chest beating". Some beating. Some chest. (apologies to Winston C).

You criticize MMX for the 2m tonne limit on exports but conveniently omit the fact that MMX have continually stated to the market that their exports will not be increased beyond the 2 m tonne limit until the rail/port is built. The share price of has nothing to do with the current sales. It is all about potential earnings.

MMX will make an annual profit of about US$40/tonne in from 2010. With 25m tonnes of high grade ore per year for the next 25 years you work out the profit levels.

You stated the WA Govt had stipulated that it will not allow single ownership infrastructure setup. That’s the first I have heard of such a restriction. When did that say that? Please provide text of this government statement.

You also claim the infrastructure should provide for all Midwest resource players. I agree up to a point. Certainly the viable mines need to be included. Others I suspect will be part of the inevitable rationalization of otherwise marginal or non profitable enterprises in the Mid west.

MMX will have the best and most profitable mining operation in the Mid west. It will have a long and profitable life even when the prices of ore fall in a few years. Certain other miners are not in that position.

Take MIS for example. MIS is not genuinely mining. They are simply scraping up old fines heaps and selling them off. They are also diluting shareholder funds by at least another $60 mill. They have tenements at Jack Hills and Weld Range and have done nothing. MIS sold 50% of their mine to Sinosteel for a $15 mill. Their management's abilities are limited and short sighted consequently they opted to run with the non viable Yilgarn proposal rather than MMX Mitsubishi which would have taken the rail line right to their mine sites at Weld Range and Jack Hills.

The WA Govt is likely to support the infrastructure proposal that will return maximum royalties to the Govt; ie the proposal that will export most ore in the shortest possible time. That is the MMX Mitsubishi deal, fully funded. The Yilgarn mob are out of the game.

Finally mmx / Mitsubishi have guaranteed that their infrastructure proposal will be multi user; ie can be used by MIS and others.