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Here is a list of the common downramps that have been circulating and a rebut to each.

1. MC way too high

This chart shows UMC commencing drilling on their 100Mt target with a MC of $200m, effectively pricing the 100Mt target at $2/t. Not a drill even touched the ground yet.
The ASX tanked soon afterwards so the price fell, but then steadily rose 250%.



FMS current fully diluted MC at 12.5c is $185m targeting 500Mt of haematite ore. So far under 50Mt at $4/t is priced into the MC, they are targeting 10 times this amount.

2. Fe% content too low for DSO and the impurities are too high

There are a few different sources that state that the "The average grade of economic Australian haematite resources vary between 57% - 63% Fe, meaning that once the ore has been crushed and screened they require little beneficiation and can be direct-shippable to the end user for use in blast furnaces." That one comes from the following link DJ CARMICHAEL IRON ORE BOOK. Other sources state that DSO can range from 55%Fe upwards, which can be seen in BCI's announcements.

BC Iron have recently JORCed a tiny 50Mt CID resource, their cut-off for DSO was 57% resulting in a DSO resource of 28Mt. FMS could also have a similar ratio of DSO/CID. From their 500Mt target 280Mt may be suitable for DSO. Even at a conservative $2/t that could equate to a $500m MC giving a SP of 34c, and at the usual $4/t, 68c.

Their impurities will probably be comparable with FMS once they continue drilling the rest of the 250+ holes based on the rock chip samples and the first three assayed holes. Also as Dr Kev was saying in the latest BRR interview, the water content of CID deposits are higher than banded forms, therefore the Fe% is actually higher when smelted.
Maiden Resource Announcement - Nullagine Project

It is really too early to call regarding impurities, Area C looks to be the most promising with the highest Fe% and lowest impurities and is still yet to be drilled. This area has the samples listed from 15-19 in the chart below.



This area also contains outcropping DID areas (no overburden, see next point) shown in the photo below.



3. The ore is too deep

The CID deposits are a continuation of the FMG Serenity project and have roughly 40m of overburden the same thickness of overburden as seen in UMC's Railway Deposit. However as CID is a sedimentary formation, the overburden and ore is easier to remove than that of banded formations. Brockman Resources refer to CID as "free dig" - no drill and blast, which is a significant cost saving when mining. There are also areas with no overburden yet to be drilled as seen in the photo above.



4. FMG would never want the FMS tenements

FMG has a MOU for an off-take agreement with BCI for its CID resource. FMG has also stated in promotional material that its current strategy is to keep building its ore reserves.
BC Iron signs MoU with Fortescue Metals
Does UMC have such an agreement?

No doubt they will come back barking instead of walking away with their tails between their legs. Nuff said...