Foretescue Metals has a market cap of $65 billion, zero net debt, and 175 mpta of production. Fortescue has an enterprise value of $370/ton.
Grange Resources has a market cap of $640 million, $300 millon in cash using miningnut's figures, and 2.5 mpta of production. Grange has an enterprise value of $340 million or $136/ton. Grange is way undervalued compared to Fortescue.
A scaled down Southdown project might cost $1.5 billion to develop for 5 mpta. Southdown's capital cost of $300/ton is only marginally cheaper than Fortescue's $370/ton valuation. The decision to build the mine is a bit like a call option. It is better to wait and see if the iron ore price goes higher, rather than exercise the option now.
What can GRR do with its excess cash, page-101
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