come on rio!!, page-2

If Rio place as much importance (which they do) on iron ore, as they do uranium, I am sure they are considering making an offer for Flinders.

Rio is currently in a bidding war for Canada's Hathor Exploration with uranium heavy weight Cameco.

Here is how it is playing out (Canadian dollars):

Aug 26 Cameco offer $3.75
Oct 19 Rio offer $4.15
Nov 14 Cameco offer $4.50
Nov 17 Rio offer $4.70... values Hathor at $654 million

Hathor currently trading at $5.05.

In no particular order here are a few points why if I was the head of acquisitions for Rio why I would take a serious look at Flinders.

Rio is big time into iron ore. It is their core business.

Flinders have a world class resource sitting within 20kms of a Rio railway.

The FMS PIOP is next to a 1 billion tonne plus Rio iron ore resource (Caliwingina)(similar geology).

The FMS PIOP is well developed.

The new MRRT means that the FMS iron ore has value to Rio even when it is in the ground. Tax offset.

All this synergy. Location is a massive plus.

Additionally of interest is that Tom Albanese (Rio CEO) has gone on record recently saying that Rio is looking to make acquisitions and they may not necessarily be mega acquisitions but the small to mid tier stuff.

If the Russians see value at 30 cents then Rio could arguably see value at 40 cents. IMO.

Infact if I was a Rio shareholder I would be a little disappointed if Rio was not doing their due diligence on the FMS iron ore assets.

Looking at how the Hathor saga is playing out we just may hear something from Rio this coming week. Because FMS is giving the nod to the Russians I don't think Rio will waste too much time responding... if they do!