Murchison’s current estimate of the size of the exploration targets for the Jack Hills Project comprises a range of between 301million tonnes to 516 million tonnes, with a midpoint of more than 400 million tonnes.
Murchison Metals Limited (MMX) have confirmed its target production estimate of 375 million tonnes over the proposed 15-year mine life at its Jack Hills iron ore project. This would equal to 5.6 Billion tonnes which is Premium grade +62% Fe (Direct Shipping Ore), thus very low operational costs. The Company believes it can produce iron ore at an average cash operating cost of A$56/t over the life of Stage 1, generating an average margin of A$19/t. putting aside Capital expenditure for Stage 1 is expected to be A$41m, which is a drop in the ocean. the simple maths are: 5.6 Billion X A$56/t = A$313.6 Billion therefore equalling 5.6 Billion x A$19/t = A$106.4 Billion
Murchison has signed four fixed-price contracts for the supply of iron ore. The contracts provide for the shipment of 1.2Mt of iron ore annually to cover the first 5 years of production. The first year’s production has been sold at US$58/t for both lump and fines, which is at a premium to the market. Contracts for the remaining uncontracted production are currently being negotiated.
Murchinsons own company profile, which can be found on their website along with all the conservitive Analyst’s reports, http://www.mml.net.au/investor_relations/announcements.phtml which states the following:
Mitsubishi to acquire 50% of Murchison’s iron ore assets
� Murchison and Mitsubishi to jointly pursue other iron ore development opportunities in the Mid West region of Western Australia
� Murchison and Mitsubishi to establish 50:50 infrastructure business to develop new Mid West rail and port infrastructure
� Mitsubishi purchase price expected to provide required equity capital to develop Jack Hills mine and associated rail and port infrastructure.
Midwest & Murchison combined
Would make Murchison and Midwest as a group Combined group would be the second largest iron ore company on the ASX. See presentation http://www.mml.net.au/images/murchison-48--iejae.pdf
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Facts: • AH would not risk damaging their envable reputation with the worlds top tier clients if they thought for one minute they could not win. • No law firm would say that they believe that the claims they make will be successful. (that’s putting your C-ck on the block) as stated 29/11/2007 to ASX. Think about it if they loose and a top tier client says “will we win� “hell yes we will be successful� the client is going to run a mile. • Payment, it’s costing AH $200k to buy 40m options excersisable at 15c (yes we all know Chameleon do not have sufficient ready available cash for the proceedings) which equates to $6m – the $200k. • So they spend $6m for what, and think about this carefully, to hold 40m shares that are worthless, when they could invest $6m in the bank and get 10% compound interest over three years, which would equate to nearly $8m for doing nothing. Or they could invest $6m in a aggressive fund at 50% compound return over 3 years which would equate to over $25m. (before you say “that’s dreaming� its only 50% we all hope to make more than that when we buy shares). • Now all of this and that’s not taking into account the costs for the proceedings.
So to recap, $2m profit on ordinary high street bank interest @ 10% and they have not got to lift a finger. Or take some risk with an aggressive share fund and return $19m profit and they have not got to lift a finger.
It says that AH are going to proceed with a case that will return them Fees as a starter their $6m return plus a 4 times factor (3 year compond interest @ 200%) to risk their reputation to net $81m for their 6M investment. That would make their 40 million shares worth $1.97 per share. Absurd you cry, how much was Murchinson worth before Jacks hill, $0.32 now $4 plus. So $1.97 is still conservative.
I have not put this post on here to up ramp or down ramp any of the companys mentioned. However FACTS are FACTS
CHM Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
(20min delay)