IOH has done well selling off the higher grade satellite ores to beef up cash flow in order to keep drilling and ride out any storm. Fundamentally it is endowed with a big resource (albeit high phosphorus) that only the big boys could snap up.
However I can't see anything happening (corporate transaction) in the foreseeable future given the economic uncertainty and the fact that RIO and FMG have more ore than they know what to do with. See their recent resource upgrades.
The problem remains that unless RIO acquires Iron Valley and other large tenaments, there is no other buyer. The Chinese (even if they are allowed) won't buy it as they don't have rail (see how Wah Nam grand plan falling apart).
Another issue is that IOH's projects are all over the place making a corporate level transaction difficult as these disparate ore have no synergies.
Hence IOH may in the next year or two prove up more resource and hopefully flog then off piecemeal. As close to infrastructure the resources are, if RIO or FMG don't open them up, IOH ore will still be stranded like BRM. Production is as distant as ever.
In a couple of months time, the market may come to this realization.
Add to My Watchlist
What is My Watchlist?