broker reports, page-9

I would not trust what brokers say,

Consider this.

Morningstar via Etrade stated, "Cost inflation and the carbon tax are blamed for the increase in cash cost guidance from AUD 65-68 a tonne to AUD 72-76 a tonne, reducing Karara’s appeal. At AUD 0.30 a share, we retain our Avoid recommendation. The company is likely to be a high cost, relatively low margin iron ore miner with highly capital intensive assets and a weak balance sheet. We expect state royalties to add around AUD 5 per tonne to costs, transport to China a further AUD 18 per tonne and AUD 18 per tonne for interest and debt repayments"

So they are giving a 30c per share value to the stock now after the placement. But the kicker is this "transport to China a further AUD 18 per tonne". GBG is FoB Geraldton. The buyer is responsible for shipping. This is easily confirmed with the company.

So that $18 p/t for shipping equates to $180 million a year worth of costs that are simple not correct. That makes a huge difference to the companies bottom line and the value. And need I also say what there own valuation would be. It could be the difference between profit or not.

It does make you wonder how many other are doing this also.

IMO always drive down into how they come to the value they state.