A very well researched article FYI....

A very well researched article FYI.
https://au.news.yahoo.com/thewest/wa/a/28399844/pluton-rattles-foreign-tin-for-irvine/


Pluton rattles foreign tin for Irvine
Nick Evans
June 11, 2015, 7:52 am

Pluton rattles foreign tin for Irvine - The West Australian

Cockatoo Island. Picture: John MacFadyen/Pluton Resources
Pluton Resources shareholders remain in the dark about a return to the trading boards, despite the company yesterday upping its offshore bond offering to €50 million ($72.9 million).


The troubled iron ore miner was suspended from trading on the Australian Securities Exchange more than a year ago as it explored funding options for its Cockatoo Island mine amid mounting debts and a dispute with its Chinese joint venture partner that led to the appointment of receivers in November.


With Pluton’s major creditor and shareholder, General Nice Resources, retiring the receivers in March, the company launched a £25 million ($49.8 million) bond offering in Britain six weeks later.


The company was banned by the Australian Securities and Investments Commission in January from raising equity on the local market for a year without a full prospectus following alleged breaches of its disclosure obligations and a failure to meet reporting requirements.


While the company is still believed to owe creditors for work dating back to last year, the bond offering aims to raise funds for its Irvine Island magnetite project, which was mothballed by Pluton in 2012.


Irvine hosts magnetite deposits grading only about 33 per cent iron. Three years ago, Pluton estimated development costs of the project at about $650 million.


In documents associated with the bond issue, Pluton says it wants to spend more than $33 million updating feasibility and engineering studies on the island.


The bond offering is secured against the project, which is valued at $76 million by the company.


But industry sources suggest that valuation may be optimistic in today’s parlous iron ore environment. The estimate, backed by a September 2014 independent geologist’s report, puts a 52.7¢ a tonne value on the project’s combined resources of 141.3 million tonnes.


That is more than 42¢/t value implied in Fortescue Metal Group’s $430 million Iron Bridge deal with Taiwan’s Formosa Plastics group in 2013.


The two most recent Australian magnetite asset sales — Radar Iron’s acquisition of the Yerecoin deposit from Cliffs Natural Resources and IMX Resources’ sale of its Mt Woods project — had an implied value of 3¢/t and 2¢/t respectively.