Christos nobody is buying into this for the dam railline.
"FMG is targetting 40Mt of average grade ore. This is one 10th of BHP pilbara operations when grade is considered." They have over 1B tons at over 60% fe. Is that average grade? Yes the announcement last week of additional resources is lower grade, but the initial grades for the Cloud break mine. (See ann 13/2/06 + other announcements)
BHP's TOTAL iron ore production was less than 100Mt last year. FMG is STARTING at 45Mt and planning on increasing to 200Mt by 2012 - announced repeatedly. They have the capacity to do this. They own enough port space, will own the railway, already have the resource in the ground, and will get the cash from profits by the time they need it.
you agreed about 1/3 BHP's cap is Iron ore. So if them transporting 100Mt of ore is worth 1/3 of $220B (including all the shares listed on other exchanges) then its worth about $700m per 1Mt of ore transported. This puts FMG at $31.5B MC by the time they hit 45Mt on ship, and 140B if they ever get to 200Mt.
Now I agree, add in a risk premium of what? 20%? 30% - go for 40% and its still worth more than what its trading.
Feel free to BLOG-slap me on this...
:) enjoy!
buddy, page-45
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$22.48 |
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Mkt cap ! $69.21B | |||
| Open | High | Low | Value | Volume |
| $22.41 | $22.64 | $22.22 | $89.05M | 3.959M |
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| Price($) | Vol. | No. |
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