iron ore direct shopping pilbara 50 m cap, page-4

4 or 5 years into the commodity boom......cheap mining stocks which can truely leverage China and Asia growth are very hard to find. Brokers have not heard of many of these stocks.......so where you do you find out about them.

Well you either do the hard yards yourself - by spending maybe 3 or 4 hours a day in research....or a much inferior way, is when the chatlines are flooded with messages for a particular stock. (and the price has already run up). Certainly the later does not apply with YML, in terms of the number of posts here.

However, if you do happen to read this post- I think you should research this stock. Recent story would explain a litle as to why the shreprice on YML may go up alot.

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Pilbara old hand takes helm to steer Yilgarn's iron push
Date: July 9 2007


Barry Fitzgerald

Yilgarn Mining
SUCCESS in the exploration game is as much about having the right people as it is about having the right project at the right location.

Iron ore and nickel hopeful Yilgarn Mining (ASX code YML) has long had the right sort of exploration properties. With the appointment of Wayne Richards as managing director, it can now boast it has the right people.

Securing the services of the 42-year-old metallurgist is something of a coup for Yilgarn. The former Townsville boy is due to start next month after clearing his desk as project integration and commissioning leader in the Pilbara for BHP Billiton's iron ore division.

Like Rio Tinto, BHP is spending money hand over fist to expand output in the Pilbara, with a lift in its production to as much as 300 million tonnes a year now on the cards.

All very exciting but not enough in itself to keep Richards within the fold. He wants some new challenges.

That's good news for Yilgarn because there is nothing about the Pilbara iron ore business that Richards doesn't know.

He has been pretty astute in picking Yilgarn as the boat to board in his professional sea change. The stock has performed well in the past couple of months but when stacked up against the stellar performance of peer iron ore hopefuls, it has some catching up to do.

While the group's Carr Boyd nickel project has some obvious upside value, it is the Marillana iron ore project in the Pilbara that will provide that catch-up in the months ahead.

First up will be establishing a compliant resource estimate for the north-west sector of the Marillana tenement of 30 million tonnes of iron ore, grading better than 58 per cent iron. That will be a good start but the real excitement will come when the potential of the four or five feeder drainage channels feeding in to the Fortescue Valley property from the iron-capped Hamersley Range are put to the test.

The company won't make any guesses but some Pilbara hands will tell you that they wouldn't be surprised if Marillana can shape up as 100 to 200 million tonnes, if not more.

And well it might. But Yilgarn will be left with the problem of getting the iron ore to market. On that score, it's worth pointing out that Marillana straddles BHP's railway to the coast. Third-party access to infrastructure in the Pilbara is still a sensitive issue but "win-win" deals will be done, if not with BHP then with the shiny infrastructure being put in place by Andrew Forrest's Fortescue Mines on the other side of the valley, 50 kilometres away.

As part of the iron push by Yilgarn, there will be a name change. Its shares closed on Friday at 54.5¢, down 1.5¢ a share, valuing the group ordinary shares at about $35 million.

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There 30 MT tons can right now be compared with MGX.....a $1.2 billion company with proven deposits of 85 MT from three different locations.

1/
Extension Hill Project
Located in the Mt Gibson Ranges (from which the Company takes it name), 85 kilometres east of Perenjori and 260 east south east of Geraldton, the Extension Hill Hematite deposit has JORC-compliant Probable Reserves of 12.1 million tonnes.

2/
The Tallering Peak Hematite Operation commenced production of high quality lump and fine hematite ores in February 2004 and achieved its target production rate of 3 million tonnes per annum (Mtpa) in the first quarter of the 2006 financial year.

Located 175 kilometres east of Geraldton, Tallering Peak is a modern efficient mining operation with a sustainable Life of Mine Plan that should see the mine continue to produce 3 Mtpa each year until 2013.

3/
The Koolan Island hematite mining operation is in Yampi Sound, off the northern Kimberley coast of Western Australia. Almost 70 million tonnes of high grade (Fe @ 67%) iron ore was mined by BHP from Koolan Island from 1959 to 1993.

Recent geological surveys and resource in-fill drilling programs confirm that Koolan Island has resources of 53.3 million tonnes @ 64.6% Fe, including reserves of 24.8 million tonnes at 65.0% Fe. This resource is located within four deposits; Main Pit, Acacia, Mullet and Barramundi.

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It hard, tough going for MGX because of narrow rail lines and limited port facilities at Geraldton. The operation at Koolan Island cost $150 million plus to get up and running.

Similiar production problems are not likely to face YML in the Pilbara. FMG will commence production in the middle of next year a the rate of 45mtpa. They have capacity for 100 mtpa. FMG have told all in sundry (eg (WA Gov and two other company BC Iron and Atlas-more than happen to share their rail/port facilities).

What could stop YML from annual production of 3mtpa of iron ore - or $70 million nett annual profits.....I think very little. SP appreciation would see it 15 times current levels.

Research it for yourseld and come back with comment.