I'll have a lick at this krustyl1. First JORC ann. in 2nd week...

I'll have a lick at this krustyl

1. First JORC ann. in 2nd week of July.

2. This depends on how large the JORC comes in at. I do not think grade will be an issue. Whether its 59, 60 or whatever, its irrelevant I feel. The low impurities and the closeness of infrastructure is more important imho. You've got FMG a stones throw away and RIO plus BHP at the doorstep. Add the possibility of close to a 100% hike in iron ore prices, plus add the spruiked 'speed' to production (say late 2009 to mid 2010. And all this should reasonably justify a base valuation of $10t (insitu). So fully diluted (at say c. 160m of scrip) gives us:

-say around $3.12 for 50mt JORC

-say around $4.69 for 75mt JORC

-say around $6.25 for 100mt JORC

-say around $7.81 for 125mt JORC

-say around $9.37 for 150mt JORC

-say around $10.93 for 175mt JORC

-say around $12.50 for 200mt JORC

Now add c. $21m cash they will have after full dilution which is around $0.13 per share

Also add potential new discovery upside to, at the very least, the three new targets et al to be drilled come July and after i.e. Jumbo Jugs, Candi and Railway Yeast etc of say $0.10 per share

Plus bauxite at the throwaway per share price of $0.05 and so on and so forth.

3. So if they ann. say the 100mt they've been spruiking, theoretically UMC should then be worth around $6.53.

However its not always this easy. No doubt the price will pop on open to over $3.00 in my mind then the short term profiteers will swoop in, before the value traders take charge and ride the 'wave' up before the daytraders jump on board for a cheap feed. Realistically the share price will not settle until after some broking houses come out with recommendations (hopefully buy ones lol) with associated price targets. This will signal that our Ms UMC has cum of age, then hopefully our local instos will be ready willing and able to enter her.

Downside risk is real as one should never count their peking duck until its hatched. But I see the downside risk as minimal in this current iron whore climate. There is more risk imho in something going wrong intrisically rather then extrinsically.