Street Talk Edited by Anthony Hughes (ahughes@copyright link.au) 1,733...

Street Talk

Edited by Anthony Hughes ([email protected])
1,733 words
7 March 2005
Australian Financial Review
First
16
English
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Profits set to soar as price bonanza hits Mt Gibson

Now the Portman board has embarrassingly caved in a touch too early to Cleveland-Cliffs' takeover bid, finding control of a small to medium-sized iron producer, which is exposed to the recent stunning price increases for the commodity, is not easy.

West Australian iron ore producer Mount Gibson Iron has already run up sharply on the news reported by Rio Tinto last month that Japanese steel mills would be forking out 71.5 per cent more for iron ore, but the broker that has been most vocal around the market promoting the stock, Shaw Stockbroking, reckons it could be worth a lot more.

Last week Shaw released an eagerly awaited report on Mount Gibson with a six-month price target of $1.20 a share, versus Friday's close of 65 ¢.

Mount Gibson's recently announced interim profit was just $6 million, but the miner is now expecting a second-half profit of $15 million, well above its full-year guidance of $12.6 million in September.

On Shaw's numbers, the full-year impact of the price rises means a $55 million profit for 2006 as the company ramps up its hematite production. Mount Gibson also has a jointly owned magnetite deposit in development, one of the most progressed magnetite developments outside of those operated by Rio, BHP Billiton and Brazil's CVRD.

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Finance

Bulls & Bears

199 words
5 March 2005
The Gold Coast Bulletin
B - Main
167
English
Copyright 2005 News Ltd. All Rights Reserved

This week's share advice comes from Max Mengler, from the Surfers Paradise office of Bell Potter

BUY

MOUNT GIBSON IRON

Mount Gibson Iron Ltd is involved in exploration for iron ore in Western Australia and controls two iron deposits in the mid west region of Western Australia, namely Tallering Peak and Mt Gibson. The company commenced shipping ore to China in February, 2004, and recently announced a net profit of $6.1 million for the half year ending December 31. The directors are confident that previously forecast production and shipping schedules will be achieved this financial year and with the recently announced 71.5 per cent increase in iron ore prices (which will apply from April 1, 2005), second half profits are now expected to be in the order of $15 million. The Company will provided revised forecasts for 2005-06 when negotiations have been completed for the purchase 33 additional rail wagons and a firm delivery date established that will allow production from the Tallering Peak mine to be increased. We rate the shares a buy for investors seeking a low cost entry into the mining sector.