Published today visa Livewire:- CZR Resources:The run up in the...

Published today visa Livewire:-


CZR Resources:The run up in the iron ore price to 8-month highs of around $US130/t has attracted a lot of commentary because it is counter to the discussion on the economic slowdown in China.But the reality is that the run up in the price is a supply story, not a demand story. It means that iron ore buyers will continue to give all the encouragement they can to bring forward new supplies, and a $US130/t does just that.BHP, Rio Tinto and Fortescue are the most exposed to iron ore’s price strength but it is the juniors that have the greatest leverage to the upside.Mark Creasy’s 53%-owned CZR Resources highlighted that in its recently released definitive feasibility study into the development of its Robe Mesa iron ore project in the Pilbara. The base case used $US90/t iron ore prices and out popped NPV of $256 million, upgraded to $820 million at $US117/t iron ore.And here we are with $US130/t iron ore. It is interesting stuff for a company with a $50m market, even more so when corporate appeal is added in to the mix. The project sits on either side of Rio Tinto’s Mesa F project.Piggy-backing CZR’s project off Rio’s existing infrastructure would work wonders for CZR’s project’s already impressive economics. So it has got to be thought Rio could well make the shared deposit its own by taking out CZR, or bidding for its Robe Mesa asset.If it doesn’t,


Rio runs the risk of some other group making the play.