Balanced View

I just wanted to put some ideas down... especially in relation to some of the posts about China and India's plans to expand their rail networks and how it is going to be massive for the iron ore industry. Sorry to do this to some but the entire iron ore demand for both projects could be supplied by AGO in a half a years production. It will take approximately 7.5 million tonnes of IO to complete both projects so please don't buy IO shares based on this hype because that is what it is just Hype!!! Conceded, it will add some small demand but in the scheme of things it is very small. It is though the type of project that does create demand and these projects are being developed all throughout the world with demand for IO required. It is for this reason I am very bullish about iron ore and AGO for that very reason.

AGO market cap per tonne of iron ore mined is $15
FMG's is $111
either 1. FMG is way over valued,
2. AGO is way under valued
3. a little bit of both

FMG has 80 x the debt of AGO yet is only 10 x the production
even allowing for FMG's lower cost of production they are KNOW WHERE near the value of AGO
In my opinion FMG is closer to a $3 share and AGO 10 cents. That would give them both a Market cap of $60 per tonne produced. (FMG's debt is higher but cost of production lower )

All the best in the new year to those backing AGO !!!!