Mate of mine did these calls we have stupidly been in since 2007...

Mate of mine did these calls we have stupidly been in since 2007 lost a heap on options

Did some numbers and their cost (Roy Hill) of production last year was $60 per tonne including taxes and royalties so they are making $78 per tonne based on an average price of $138. (they made 3.2b on the 70% ownership)

My calcs of $25pt profit should be easily attainable so long as the iron ore price holds close to $100. Article also says that when the mine commenced production it has 7.2b in debt and that this mine will have paid off all the debt within 5 years. I assume ours is going to start with at least 10b in debt so possibly a longer payback period however if the numbers are similar to Roy Hill and Legacy retains a 20% share then potentially its annual share of the profit would be a round 900m. With 7b shares on issue that’s 7.7c per share in earnings. At a P/e of 7.7 (FMG current P/E) and assuming no other earnings that gives a share price of 60 cents. If we keep a 29% share and keep shares on issue to 6.5b then the valuation increases to $1.01. Ik