Ann: Scoping Study underway for the Pilbara Iron Ore Project, page-7

More on Mulga Downs and PIOP

This from BB email, thank you.

A short trucking operation to Mulga would dramatically reduce the initial costs compared to trucking to Pt Hedland, then Gina charges for rail and port use. Later there’s the opportunity for Gina to connect her spur line to the Balla Balla line and port. Last year BBI design variation was for increased export from the port and an expanded port area.

Our real problem is the $200m+ required when our market cap is only $80m. We just got to make sure we don’t get taken out before significant progress.

A road to Mulga Downs which is east of PIOP would follow the flat and easy terrain along the base of the Hamersley Ranges. There is a road heading that way but would probably add an extra 50 -60km. Also Gina's JV partner, Mineral Resources has some iron ore deposits about 20km west of PIOP that will require an infrastructure solution in the future.

My comments

Maybe there is future potential here for a Onslow Iron Ore Project type of JV. Gina has the funds, we have the IO deposits. Could there be a future potential upfront payment and royalty option? I could imagine that Gina might like 100% of PIOP. So JV or TO potential? Maybe.

As far as getting taken out at this critical stage goes, it would likely only occur given a substantial premium to the current SP. I am still of the opinion that the current SP is way below fair value. We all know why. Our SP should start heading north if a positive Scoping Study is released and followed up by a positive PFS. I am extremely interested to see the 60+% fe IO reserves. The Scoping Study will only give reserves for two of our seven deposits so the reserves should grow substantially by the time the PFS is released.

I must admit I am very surprised that anyone is selling at this time. I believe that Flinders has the potential to have free cash flow well over the current market cap it the not too distant future. There maybe also a JV or TO to come. IO price may fall, stay flat or rise. Risk vs opportunity?

Just my thoughts which may be wrong so do your own research.