Lets do some maths on this one. I’ll assume that this ends up...

Lets do some maths on this one. I’ll assume that this ends up similar to FMG’s Magnetite project Iron Bridge. It is going to pump out 22Mtpa at 67%. Their cash cost is $US35/t but we will use their all in cost of $US50/dmt. Assuming todays 62% price plus a $20 65%+ premium we get $US112/t, giving cashflow of $US1.3B per annum.

Now by the end of the Hancock earn in HAW will still have 20%. That represents $US260M per annum. At a 7% yield that would give them a market cap of $US3.7B. Assuming that they finance their share with a mix of equity and finance then as a worst case we might get 100% dilution, which drops the value for today’s shareholders to $US1.85B or $AU2.4B. At a market cap of $32m that represents a 7500% gain from today’s share price. If I’m off by 100% it’s still a 37 bagger. If I'm off by 500% (and I'm not) then its still a 15 bagger!

LCY might have a bigger share of the project but if you look at their market cap you actually get much more exposure via HAW.

Get in before the institutions do.