Agree 100%, this study is primed for RIO. I have no doubt a deal will be done, I have pasted a few snippets that support my view. The project fundamentals, in particular 2 year payback are compelling. IMO the market will come to appreciate this.
The ruling RIO announced a deal with Iron Ore Holdings (‘IOH’), a junior iron ore explorer with a resource of 8.3mt @ 58.1% Fe, to enter into mine gate sales upon completion of a feasibility study. RIO stated the key criteria for a similar deal would be quality of ore and proximity to infrastructure – both attributes that UMC possess.
UMC has advised it is negotiating and evaluating various alterntative strategies and proposals with and from 3rd parties in relation to maximising shareholder value. The ruling by the High Court on third party access to railway is very positive for UMC. However, there are further hearings planned for Mar/Apr 2009 with decisions by mid next year at the earliest.
The Company is in a sound financial position with cash reserves of approximately $17 million, enabling it (at least) to complete a Pre-Feasibility Study, project exploration and metallurgical programmes, and environmental and hydro-geological studies by mid 2009.
UMC Price at posting:
75.0¢ Sentiment: Buy Disclosure: Held
