answer to butcherbirds request, page-4

I love to hear the reasoned opposites as to why I have invested, as there is a good possibilityy that you will identify something that I have missed.

I am an investor and at this stage will continue to be one. However, my issues with SDL.

Yes it is a speculative stock if it wasn't you could not buy it for the price it is.

No of shares on issues - At some stage there must be a capital reconstruction.

Credit meltdown - It is going to be harder for compainies to obtain credit. Could FMG obtain the same finance in the current economic conditions as it did a number of years ago, maybe -not sure. Will be a problem for SDL. Market very critical of FMG for price they paid to obtain intitial finance.


Price of iron ore contracts three to 5 years hence What will they be. FMG have same problem they have offtake agreements but at whatever the negotiated iron ore price is.
RIO and BHP in (my estimation) can ride out a couple of bad years. FMG need another one year of guarnateed returns from iron ore shimpments. The figuresd are that good.

Soverigen risk - SDL is not in Austrailia it sits in an African country bordering an African country. What discount do you apply. Tried to research, if SDL was in Australia perhaps 3 times price.

Upside - Would appear that 1 billion tones will be there and JORC compliant shortly. How much upside who knows.

Country has been relatively stable on my research but who knows

My biggest problem - is that presuming the iron ore is there is convicning people to invest -3 billion dollars in a country to put in place infrastructure to move iron ore a couple of hundred ks to coast.

Plus _ Chinese in neighbouring coiuntry - thye have the money.

Youre thoughts??