china iron ore traders banned from low-grade i, page-7

It's all about cash flow Bungy. PDY, even if they get $25m from the conversion of all options, won't even be close to identifying a reasonable magnetite resource. With what will then be 3b shares on issue, a restructure would need to take place or bring a large investor who will end up with about 99% of the project before the true size is ever close to being revealed.

On the other hand, the hematite is a relatively quicker money spinner, allowing multiples of the cash from exercised options to be earned. Dig it up or sell it off, either way it allows PDY/AGU to retain the magnetite until they prove up millions of tonnes. They are then in a stronger position to think about j/vs etc.

The magetite project is far too big to adequately tackle on their own, yet to j/v it now will see most of it given away for less than $20m in expenditure like happens with most small companies. Best to control their own destiny, otherwise the project will be slowed down to a snails pace by a major looking to frustrate holders out of their shares before trying to take over the company for a pittance.

The hematite is the low hanging fruit. Get that before bothering about the difficult stuff.

Sinosteel Midwest are about to mine the Koolanooka hematite first, then the Weld Range hematite, then the Robinson Range hematite. After those mines are up and running they will look at Jack Hills hematite followed by all their magnetite resources. I trust their judgement. They obviously see the benefits in digging up the ore and direct shipping over spending billions to build a magnetite plant. There is no infrastructure close to Robinson Range for magnetite including sufficient power, but there will be a rail line at Jack Hills long before anything else.

Anyway each to their own. Let's hope they at least do something of substance.