AGO have got to get this project moving along. Iron Road in SA has got the backing from the government to develop their magnetite project. They are located twice as far to the port than the Ridley project and their iron ore concentrate is at 67% compared to 68.3% for Ridley.
Iron Road's market cap is almost as high as AGO as well and they barely have any cash.
The feasibility for Ridley was done at the height of the GFC in 2009 and a very low sales price of USD 51 was used. Black Iron in Ukraine will be producing 68% concentrate for their iron ore project and have used a premium of USD 43.28 above the 62% index in their recent feasibility study.
At the current iron ore price of USD 68 and AUD/USD rate of 0.75, Ridley could fetch just under AUD 150 per tonne. This would give EBITDA of $1.7B per year over 30 years.
Of the capital cost of $2.97B, 250M is a contingency and $505m was converted from USD at an exchange rate of 0.669. At 0.75, the USD costs converted to AUD would be $450M, about $55M less.
We have got to get a partner for this and get this moving asap.
