Ann: Replacement Bidder's Statement, page-75

Interesting view and you may well be right. I think though there are lots of supply of low grade ore it’s just high grade DSO ore which are depleting. I’m not sure AGO has really turned the corner. If they started producing at 40 and sell at 60, I would agree with you then.

I’m rationalising the Twiggy/Gina situation like buying an investment property.

I see my neighbors rundown house (iron ore mines) up for sale. I can try to rent it out (mine it) but to do so I will lose money as I need to spend a lot to renovate/manage (high OPEX) and rental yields (low grade ore prices) remain forseably weak in that area. The land (ports, potential rights to NWI, bit of lithium) is worth something though. What if I bought the property knocked it down and attach it to my current property, how much more would my total property be worth and how much should I pay? I think that’s the situation both twiggy and Gina are in. As far as they are concerned they are only buying the land and have assigned zero value to the rest of the business. If you wanted to realise value from AGO you might be better off selling it off in bits so each buyer will pay a premium for the parts they want, not the whole lot.

They know AGO can’t repay its mortgage, so if they can’t buy parts of the assets at a price that is profitable to them, just wait a bit to buy in a garage sale.