Ha ha that's actually a good point, if the Chinese are dumb enough to buy Cape Lamberts pile magnetite shite they will buy anything. No, they wont buy FDL for the reasons I set below.
However at the end of the day there will only ever be one suitor for FDL and thats FMG.
Nobody is going to build a railway there except FMG.
FMG will of course know that FDL there for the taking if they ever want it and they must know knowbody else is going to pinch it because you have to either stump up for a railway or have some sort of deal with FMG to use theirs in the future which of course FMG would be crazy to concede as it would assist someone getting FDL from under their noses.
This also means they don't need to do anything in the short term because it will always be there. FMG have got this sown up. They can leave FDL alone for as long as they like because nobody else is going to fork out $100M+ to buy FDL without having an early railway deal with FMG
FMG may take the position of letting FDL drill it first and then if the resource is substantiated they may make an offer but given FMG's billion tonne resource at Solomon paying $100M+ for FDL up front would prbably be the most expensive bit of ground they acquired. Why would rush in and risk paying allot for something that is still conceptual. Very promising indeed I must add.
If I were FMG I would do nothing for years until I had a use for the ore and even then I would buy the ore by the container load (Toll basis) and split the profit margin or some sort of royalty deal. What would FDL do? Say no and do what? They have no options except to do a deal at some time in the future on FMG's terms.
Nobody except FMG is going to build a railway to this deposit. That you can take to the bank.
Good punting though and I do agree with the markets valuation of this very nice resource its just a question how FDL can extract value other than a future royalt deal
FDL
flinders diamonds limited
