Ann: Supplementary Prospectus, page-13

As if it wasnt going to be hard enough to get this placement done they are now approaching the perfect storm with these sort of headlines.


Iron ore price slide hits miners


The price of Australia's major export has dropped to fresh lows in China, causing shares in local miners to plunge. Iron ore fell below $US85 a tonne in China on Thursday for the first time in five years, finishing the day at a low of $US84.30.

That dented local share prices as investors prepare for the possibility of a continued price slide.
Andrew Forrest's Fortescue Metals was among the worst hit, with its shares dropping 13 cents, or 3.2 four per cent, to a 13 month low of $3.92.Even lower cost producers BHP Billiton and Rio Tinto didn't escape the sell-off, with both losing more than one per cent from their share price.

BC Iron shares were 3.9 per cent weaker and Mt Gibson Iron took a 3.8 per cent hit.
The price of Australia's most important commodity has fallen more than 37 per cent in 2014 due to additional supply hitting the market and slowing economic growth in China.

That has hit some miners hard, with Australian Bureau of Statistics figures showing the sector suffered a slide of more than 15 per cent in profits during the June quarter.IG Market strategist Evan Lucas said iron ore prices could hit $US80 or even $US74 a tonne within two months as supply growth outstrips demand growth in China.

While BHP and Rio will be able to continue to produce iron profitably at that level, the likes of Atlas Iron, which has a break-even price of above $US80 a tonne, will struggle.
"People are starting to understand this is going to go on for a bit longer than people had expected," Mr Lucas said. Prices would likely recover later in the year as many of China's domestic miners find it too expensive to continue with production during the country's winter, he said.
But miners will need to be prepared for low prices, and it was inevitable that some smaller producers would close.

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