By referencing my occupation and age you seem to be using this as a way to discredit what I have said. As you give off the impression you are about research and facts (plus DYOR suggestions at the end of most posts), I will provide you with factual answers only I can provide to you (and a little bit more) which are as follows:
1. Yes, I am in a finance related field
2. I wont disclose my exact age but if you think I am in my 20s you are way off
3. If my nickname is indicating age you are wrong. As an aside, I have never even snowboarded in my life, was just a random name.
4. I am confident you know more about AGO and commodities in general
Now back on topic.
Advocating Same Side of the Coin
We are both advocating the SP should be higher. Your basis is on "valuation" of underlying assets, whereas my contention is on "realisation" of the value of assets, two very different concepts.
Markets - Supply/Demand and Value
"As for the availability of ore.....iron ore is a finite resource and has value"
This will be a recurring theme. I am sure you will agree no matter what you are selling (from a litre of milk, to companies, to iron ore), the price is normally determined by supply and demand. Value plays a role, but this becomes a case of "in the eye of the beholder", which I will come back to. Doesn't matter about the quantity, you need to find a buyer. Only I can produce "snowboard turd", must be worth a fortune because it is high in protein and low in supply, need to find a buyer still which thinks that. Every resource is finite in nature, its a question of who is prepare to pay for it.
Low Iron Ore Prices
" I believe that low grade may cover a wide variety of grades from 58% down. To me it is not logical that ore that is only 4-6% below a 62% fe should be hammered by such a large discount."
I'm sorry, but by not understanding why there are material differences in small % iron ore grades, I suggest you spend a bit more time on understanding the iron ore markets as opposed to just speculating on how much minerals is underneath AGO grounds. If anything, the reader can interpret you are implying there should be some linear/fixed value assigned to each % which in itself is illogical based on demand/supply principles. Using a different analogy, buying a car, Toyota corolla vs Mazda MX5 vs Lexus SUV. Are you going to argue their price points should move based on some linear fashion based on the size of the car?
Most of Aus' DSO export is to China. China is paying a premium for higher grades due to environmental policies together with more efficient steel production. You can easily find articles which argues against the sustainability of this, but in the meantime this remains true as most producers are trying to find the higher grade. Because of my occupation I recently met with a junior iron ore miner, and in our discussions they confirmed FE pricing up to a certain level was as simple as that.
You have also not mentioned macro factors. You can find lots of articles on the weakening Chinese economy such as debt issues, its own potential housing bubble etc... if that is true then wouldn't that affect the demand for steel down to demand for iron ore? Aren't current iron ore prices potentially a part reflection of this weakness?
Underlying Value of Assets
"...how large the Atlas Tenement.... and the full extent and value of those commodities identified.... valuable commodities may be there would you sell."
How much ground is there unexplored in Aus? How many companies are sitting on valuable commodities which they do not know the value of? Why is that you think? There are many reasons/circumstances but it mostly circles back to being uneconomical.
I may be mistaken but I'm pretty sure both Gina and Twiggy have enough ore of their own where they can't finish mining in this lifetime, so why would they go pay a premium on low quality ore? Billionaires who keep on making billions, don't go squandering capital on unknown assets. These people try to deploy each cent of capital to achieve the best return whether it be a short or long term return. Your asset is worth as much as the buyer is willing to pay which is based on needs. Let's go back to the original reason why Twiggy and Gina is in AGO, infrastructure, as it compliments its existing business. Everything else is a bonus, doesn't mean they want to pay a premium for it. The other assets is in the "eye of the beholder"
No Takeover, Management under Gina or Twiggy
This is a possibility, but I think its a last resort. I don't think either Gina or Twiggy was thinking "... Let's buy a junior minor like AGO cause its an underperforming asset and we can do a better job....". They run multi-billion mcap companies. The only thing they were likely thinking of was how AGO can fit into the strategy of its core business and how much is it worth if I miss out. If anything I would be wary that both would let AGO run into the ground then carve the spoils out later.
Realisation of Value of Assets
Simple concept, you get paid for the asset. Even if you are correct on all your assumptions and predictions on the future value of AGO assets, you need Twiggy and Gina to see eye to eye with you and is time on your side?
For AGO
1. AGO is unlikely to survive on its own
2. Asset value never fully realised
3. Shareholders left with nothing, ground hog day... dilution anyone?
For Twiggy and Gina
1. Iron ore are of low grades not exactly complimentary to existing ore needs
2. Infrastructure/ports is the main carrot adds to shipping, how much value does it add?
3. Unmined / unproven tenements, small bonus, may find time to explore
IMO, in these situations, the buyer often low balls, but the first bid is generally an indication of the "range" where they are valuing it. If something is worth $1 they won't offer 10c. MIN making the first low ball offer merely kicked Twiggy and Gina into action to not miss out, but that does not mean they will pay the world for it. If the AGO assets were that "strategically" important to Twiggy or Gina, they would have made an offer a long time ago.
These are only my views, based on the moves I have observed by all parties. Maybe Twiggy thinks AGO is worth 8cps but if he can get it for less he will, and this will be driven by what Gina does and vice versa.
How are you going to get Twiggy or Gina to pay what you think its worth when they both know you cannot survive on your own?
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