The question I have is where does this stop.. Whilst the forecast are nice for the big banks that always get it right .. ,it is really getting ugly for everyone including the Big 3 at $40/ton. The game I think we all agree is to wipe out anyone with production costs north of around $US60/ton all in.
In the end the market will correct itself on supply/demand and there will be a lot less players in the game. This will be slightly skewed if you see the $AUD continue to drop to below 70c/USD. This would keep maybe a few more players in the game.
However, I can see in the medium term (end of BY16 and beyond) enough reduction in supply that the price will recover.. Who knows where the long term price will be but I don't personally feel it will be here.. How long do we think the big 3 will continue to have happy shareholders when they are making $US5-US10 a ton.(depending on your view of their actual costs). And I cant see much new exploration in Iron Ore before 2017 plus, sentiment is just not there.
So for TAW, this lines up perfectly to a possible production date for their high grade, low capex project.. From my perspective, the current share price reflects the general market sentiment towards iron-ore, it does not reflect the future value of the company. I am a counter cyclical investor and I see TAW lining up to a 2017 production date perfectly reflecting a change in sentiment.. If TAW was in production today it would be a totally different picture but they are not... Wayne is doing a good job and we need to keep moving forward because I think we might just hit a sweet spot if we are ready to mine in 2017...
These are my personal views.. Not investment advice.
TAW Price at posting:
0.6¢ Sentiment: Buy Disclosure: Held
.. ,it is really getting ugly for everyone including the Big 3 at $40/ton. The game I think we all agree is to wipe out anyone with production costs north of around $US60/ton all in.
