I don't want to get too much into the value issues but I think there are some major pluses that may not be understood by casual observers. I don't generally keep detailed research notes or spreadsheets like some committed investors, but here are a few observations:
1. re Onlsow Iron, the capex budget for MIN was from memory around $2.2bn, but that included funding the capex contributions for one or more other shareholders in the former API Joint Venture. I think they funded contributions for AMCI and also Boawu (Boa steel) in consideration of MIN receiving a part of their percentage interest, thus delivering MIN a bit over 60% in total of the total project.
2. I think the dedicated haul road component was the largest capex expense and cost MIN around $1.5bn which it will then charge out at a cost per tonne of iron ore transported on it. Subject to them reaching their ramp up tonnages, this piece of infrastructure is a stand alone cash cow for "life of mine". That is so much so, that they were able to sell a 49% interest to an infrastructure fund for $1.3bn! And it's not even completed, but when it is, it will be state of the art insofar as the 320tonne capacity road trains will ultimately be totally autonomous on this private road. The quarterly report stated that already they have 50 (!) road trains fitted with such autonomous vehicle hardware and I understand that on average there will be one road train leaving for the port fully loaded every 5mins when production is ramped up.
3. MIN mining services division has the contract for mining etc for the entire project, not just their share, for the life of mine....ie decades. From that you can infer annuity style income, that is extremely low risk for that part of their commitment.
4. MIN has installed its own proprietary design crushing units that will provide standardisation for parts etc and that is proven technology.
5. Project partner Baowu has a take or pay offtake agreement for a major part of production, the details of which I would have to look up, but it is again turning this operation into a very low risk one that will be able to stand up through any price cycles.
So despite the questions about how long to get the road finished etc, there's nothing to see here. Morgan Stanley has even agreed to advance the company $750m of the sale price (of 49% of the haul road) pending completion. One kind of question I asked myself was why they had to raise the last lot of new debt at 9.5%, but as a former lender myself, the answer is that MIN is led and substantially owned by an entrepeneur. That makes lenders nervous, but as Chris Ellison would soon tell you..."take a look at the returns profile on a MIN investment over the last 25 odd years..." It's exceptional! All imho..
(20min delay)