The share price of FMG dropping ( or any company in general) is...

The share price of FMG dropping ( or any company in general) is not a problem for the business per se, unless they need to raise more capital to fund expansion through the issue of more shares. (It's a problem for some investors though , who bought shares at a higher price)

But the falling share price indicates that the market believes the shares are too expensive relative to the earnings outlook for that stock.

One of the problems with mining companies is that their minimum production costs are essentially "fixed" as a function of the quality (ease of extraction) of the mine and the proximity to the markets. If the market costs of the commodity falls below cost, there is not much a mine can do to lower it's costs, they ususally stop production.

In the case of FMG, they are quite a low cost producer, and provided they can continue to sell product they will be OK. They might not have the $$$ to expand operations, and the share price will eventually stabilise to something that reflects the long term earning potential.

In the past 12 months FMG has transitioned from an exploration / blue sky company to a producer - which has had the effect of crystallising FMG's actual production & profit capability vs the potential capability implicit in e share price up to that point.

Not sure if FMG will go to .70 cents, but it's future value will tend more closely to the valuation ratio that the other established miners are subject to.