Thanks Blades.I read in the West Oz newspaper yesterday that Rio...

Thanks Blades.

I read in the West Oz newspaper yesterday that Rio expects to increase production to 450MT by 2019. Treadgold's whole argument was that the proposed 600MT of Rio production would kill off magnetite projects altogether.

The facts are that significant increases in production will take 5 to 10 years or Rio to achieve with underlying demand to continue to grow thanks to China and India. The timing is also critical - its all about defending the BHP takeover and highlighting the potential Rio upside...despite it taking +10 years to materialise!

Magnetite projects will therefore be a viable iron ore supply source if they can be developed in the short to medium term, subject of course to having large tonnage, higher level grades that allow for a quaility end product and proximity to infrastructure. AGO has all of these in spades.

If Treadgold was such an iron ore expert, surely he would be an executive in such a company? Hehe...

I have been lucky enough to hold AGO since 2005 and will continue to hold given DSO production in 08 (which will see a re-rating) and the potential of the magnetite project to deliver significant future cashflow. The recent pullback represents a good buying opportunity for those who aren't set IMO!!