Hi guys,Just remember we are now an iron ore producer and...

Hi guys,

Just remember we are now an iron ore producer and exporter, how many companies from the Pilbara do export there ore next to the big two being BHP and RIO, yes you are right FMG and now AGO.

This alone is worth a bucket load of dollars because even todays price is about US$100/tonnes and AGO is starting with 1 million tonnes for the first year and then increasing to more then 10 million tonnes per year.

Profit margin will be around the S$50/tonnes so the first 1 million tonnes will give us S$50 Million.

Growing to 3 millions tonnes in the next 12 months which would give us $150 Million

Remember the Mcap is now approx $250 Million and cash on hand about $100 Million.

So within 24 months they will make the total Mcap minus the cash on hand.

And remember they will ramp up production to 6 Million tonnes by 2010 and growing to 12 million tonnes by 2012.

Do not get fooled by the current volatility and conflicting statements coming from china. China will need iron ore more then most of us imagine.

The current credit crises is the best excuse for them to push for lower iron ore prices and it probably will work for the shor term but for the medium to long term there is just now way back for them, they will have to pay for something they do not have themselves and need sooo badly to build their country into the modern age.

I can see AGO being a real bargain today if you look at the PE going forwards and do not have to guess where the smart money is going to be parked.

good luck

jojo