bhp and being realistic with the info we have

Hi guys,

Lets not get the frustration get to us, and become utterly negative about this deal with???? BHP?

As I have said before I believe that we have BHP as a predator and one obvious one, as we know that the railway resource from UMC shares a common boundry with BHP.

But do you really believe that BHP would be able to get UMC for $1.40 per share?????

Lets see where UMC is right now.

They have drilled out a first class iron ore resource and have plenty of other highly prospective tenements in the middle of the Pilbara, the holy ground only to be trampled on by the two majors being BHP and RIO. lol

So here we have already something VERY special, a small junior iron ore explorer in the middle of the Pilbara surrounded by tenements owned by either Rio or BHP...

Not a bad area to be in, and certainly a reason on its own to take that little potential trouble maker out.

But since that potential trouble maker has proven up their FIRST, ( and lets not forget this FIRST word), of more then 100 Mt of bedded Marramba DSO iron ore of 60%+ FE from a resource of 158 MT of more then 58% FE, it becomes even more pressing to do something before someone else makes a move.

And guess what, the move has come, the chinese (CRM) has made the first move and taken an 11.38% share in this company for $1.35 a share and an offtake contract for 3 MT of iron ore per annum for ten years at COMMERCIAL terms.

Not bad having another $27 Million dollar in the till on top of the $9 million we still had.

So just to put this clear, UMC is not in the corner and HAS to make a deal AT ALL COST.
Not at all, UMC has enough money to keep drilling , prove up more resources and hopefully another railway, which is certainly NOT impossible being in the middle of australia's MOST prospective piece of dirt regarding iron ore.

UMC can wait and if this deal is not good enough, will pass it, unless ofcourse management is blind and has no idea , something I do not believe.
Management have a lot to gain from a higher price as they are holding shares and options themselves.

So, we have a company not screaming for cash, as they have found a chinese partner who imho, will go all the way to see the ore getting into china.
And being prepared to take a higher share in the company to make this happen.

BHP is very much aware of this and although, they would not like to pay an extravagant price for UMC, do know that they will have to come up with a reasonable bid to make it happen.

Management is working on this as we can read, out of the longer then anticipated tradinghalt.

So my first thought is still standing, a bid will probably be around the $1.90 mark and being the first bid we may go a bit higher.

Because we may get another bidder, and I would not write FMG off, they may not pay us in cash but WILL pay us in script at a higher value.
And we all know that the high FE and low contamenents of the railway deposit are great for blending their ore into a better saleable product.

So, I still feel that we will be sitting at a final price around the $2 mark.

Tomorrow, or the latest the day after we should at least be able to expect an update, if not the total story for now.

So relax and lets not get to frustrated by the usual stories from brokers, or the like who know, as much as you and myself.

Because of this, I rather look at the fundamentals of this company to reach a fair share price for TODAY, and I say that because I feel that in the longer term we WILL have a share price attached to UMC that is more then the $3 mark.

China will keep growing and the boom will be back, if it has ever left us???

So iron ore will be in high demand for at least a decade to come imho and the high prices in such a situation will be paid for this commodity.

good look guys

jojo