Ann: Fortescue Debt Offering , page-30

Some simple facts - FMG last quarter average production cost was $46.95 a ton. This should further diminish when new rail infrastructure is completed. In the six months to June 2011 FMG profit increased 31%.

The IO price fluctuations is due more to the present world economic instability than anything else and China had slowed down it's purchasing and utilized partial reserves to keep their demand satisfied.

One may expect a small bit of volatility in IO prices to continue for the next couple of months with trends from quarterly to monthly contracts where buyers try to take advantage of such. However, should the EU volatility settle then IO in all probability will see a rise again in spot prices.

In any case FMG's sale of junk bonds at 8.25-8.5% was/is a terrific way for them to obtain equity for future expansion without diluting shareholder value. It would appear Hedge Fund/shorters had been banking on a share equity raising that has now gone by the wayside. Good news from the EU may see the slower ones to cover in unenviable position.

IMO with the completion of rail, mines and new Port infrastructure (Port in approx 3 yrs), FMG is not only a good medium and long term purchase but an excellent one at current SP.

As always DYOR and good luck.