articles that suit peoples personal agendas

Reading the Tim Treadgold article is a pure example of someone writing an article to suit their own agenda without considering individual companies based on their own merits.

Tim Treadgold says:

Companies that offer a mixed haematite/magnetite investment proposition, such as Gindalbie, Midwest, and Atlas, are almost certainly over-priced. They will make money from selling haematite, but they will struggle to raise the capital or secure energy at a reasonable price to make the jump to magnetite production. Best advice: sell.

His reasoning:
Magnetite, despite its undoubted potential, is just the latest boom-time commodity, and it faces the same hurdles as all previous west coast boom-time commodities:
1. Isolation and long transport distances.
2. High energy costs.
3. Poor, or non-existent, infrastructure.
4. Dithering government.

More: Why are the magnetite miners heading downhill?
5. The ore itself contains much less iron. Typically, haematite grades 55–60% iron, while magnetite is 30–35%.
6. Processing magnetite involves physical separation of the iron and the waste rock, and then intense heating, before conversion to a semi-finished product such as high-value pellets.
7. While the physical separation process is easy (as the name implies magnetite is strongly magnetic), the heating requires very large amounts of energy – a luxury at a time when the oil price is approaching $US100 a barrel, and coal prices are rising in sympathy.
8. The capital cost of magnetite processing is also high. None of the planned projects in Australia become a lot harder as banks retreat under the sub-prime credit onslaught.

My response:
1. GBG is closer to a port than the majority of the Pilbara Operations (Soon 2 ports Oakjee)
2. Refer to point 7.
3. GBG has access to existing rail infrastructure and is not dependent on the proposed upgrade / building of infrastructure to Jack Hills (MMX) etc (refer to their recent announcements).
Also, many of the new DSO in the outback are hoping that they get some access to RIO/BHP rail lines, and even if they do, that they will have enough capacity to service their proposed production rates. RIO has just announced that they want to treble their Iron ore production with a lot of it coming from the Pilbara. So the existing rail networks have to service BHP and RIOs plans for expansion, plus any small wannabe DSO producer? Imagine being held hostage to RIO or BHP schedules and trying to "slot in".
GBG is so close to infrastructure it can truck, slurry and eventually rail its product without relying on others.
4. This is not a rational reason as many DSO operations have problems with the EPA.
5. I suggest the reader do a little more research on Mag Iron and properly include the premiums attached to the products to offset the negatives of the separation process.
6. GBG has some of the lowest Strip ratios in the country (0.5 to 1) which is lower than a lot of DSO wannabes 700km from the coast.
7. This has already been factored into the Feasibility study which proves the project is viable.
Energy source secured refer annoncement 14/11.
8. "banks retreat" - pitty GBG has an agreement with one of the largest Steel companies in the world for financing of the whole project if necessary.

Besides, GBG is proving up more Haemetite as each quarter passes.

TheGimp