plv in a bear market, page-15

Hi Ghaz,

Good questions.

The reality is this.... Koolan Island and Cockatoo Island have been in production for decades. There were times they were not, but that had to do with what BHP believed was the end of the mine lives, they were both restarted by Aztec and Portman.

At no stage, to my knowledge, has Koolan or Cockatoo not made money during their operating lives. There have been many different market scenarios over the decades and Cockatoo and Koolan always made money, at much, much lower iron ore prices.

why is this.....

Koolan and Cockatoo host possibly the greatest iron ore body that the world has ever seen. It is extremely high grade (68.5 - 69% Fe in places for example), and has very low impurities. It is the perfect blending ore.

This ore body appears on Irvine Island. I doubt you will find anyone who disputes this. Irvine has not been mined before for various reasons.. the main one being that nobody could come to terms with the native title claimants.

Even in the worst possible economic circumstances.. ie; a China and India meltdown?? this orebody will still produce a DSO product second to none, from an island with a natural deepwater port, that has no need for rail infrastructure..... A product that as a blending ore makes so many other iron ores commercial.....

In my honest opinion, and having spent a few years working on the Koolan and Cockatoo Island projects..... these will be the LAST projects that would not be economical. And we believe Irvine is an extention of the same ore body. We will prove that during the upcoming drilling program.

So my answer to your first question is that the Irvine Island project will be shelved when Asia needs no more iron ore.

Your second question is very timely! All shareholders and potential shareholders of every company should always look at whether their company can realisticaly get finance for their projects.

As I said above.. Irvine hosts the same orebody as Koolan and Cockatoo.... the logistics are also the same. Koolan and Cockatoo only needed to build a shiploader into the very deep waters just off the islands themselves, plus townsite, crushing, mine capital etc.... As an example... at the southern most point on Irvine Island the water depth is 60 metres only a few metres from the island itself. Also being an island right next to the shiploader there is no need for rail.

The capital costs for Irvine will be small. My understanding, and you should check the figures yourself, is that Mt. Gibson spent around $150m in capital for 50mt on Koolan. This is $3.00/tonne.

Irvine will be similar. If this is not bankable, I don't know what is. Worst case I'm sure the shareholders will come up with the money for a project like this.

Please DYOR on this.

Regards, Tony.