flinders to invest funds in mxr via mxro

Flinders decision today has significant potential for Flinders Mining.....
The end result for FMS looks like 14.5m shares in MXR at the end of the day after FMS converts the MXRO and next year, the MXROA, to continue it's position as second ( from memory) place on the Maximus register of largest shareholders top 20.
I have both Flinders and Maximus shares ( and/or options)and I think the Midwest resource delineation Maximus is currently drilling will turn out to be bigger than what the value of FMS tenement 882 has on the way. I could be wrong but I don't think so. The much smaller number of MXR shares on issue is a significant stake for FMS in the project. :-)
MXR have just recently announced a bonus issue of 1 MXROA option for every 4 MXR owned. ( record date to get MXR and the bonus options is 18 july, see the MXR announcements for details). There are only about 143m MXR, 31m MXRO and 28m MXROA. Like the FMS board has decided, I am going to also exercise my MXRO and potentially also my MXROA to secure the 1 for 4 bonus offer.
MXR closed today at only 19.5c ( mc about $28m). If the resource delineation is as good as it looks, even at $1 a share it's market cap is only $143m (plus converted options).
Even fully diluted ( if all the existing options were converted which I doubt they will be,before the bonus goes ex') the mc is only $202m. If they were all converted, there'd be about another 50m new MXROA which in a 100% (including bonus options being converted) scenario next year, the market cap would only be about $252m @ a forward price of $1 a share.
Based on the mc of midwest iron-ore peers and the size and grade of the resource that is just starting to emerge, $4 a share would see a mc of about $1bn which is about where FMS could be as tenement 882 evolves for Flinders. Just one scenario but other companies have been valued similarly. Early days though but Flinders holdings in MXR could be worth more than is currently apparent. This scenario is for mc and makes no consideration of further share issues, jv's and earnings etc.

a copy of the post I just did on the MXR thread...

"The ann' out just now is excellent news and further evidence of the likely company maker that the Maximus iron ore project in the midwest is shaping up to be.
The investment will add $700k to MXR cash, see FMS share holding in MXR increase to 10,500,000 shares and about 4 million MXROA after the bonus issue to all MXR shareholders at the record date.

the news tonight.....

26 June 2008
The Manager
Companies Announcements Office
Australian Securities Exchange
20 Bridge Street SYDNEY NSW 2000
Flinders Mines Limited (“Flinders”) is pleased to announce that as a result of a meeting of its
independent Directors it intends to exercise its holding of $0.20 strike MXRO options in Maximus
Resources Limited (“Maximus”, ASX: MXR).
Flinders is currently the holder of 7,000,000 Ordinary Shares in Maximus, 3,500,000 MXRO Options
and 1,400,000 MXROA Options. The MXRO Options to be exercised will expire 30 June 2008.
Flinders believes the potential for Maximus to add value to its asset base is significant and as such
intends to ensure its exposure to these projects is not diluted. In particular, Flinders has a particular
interest in the outcome of upcoming resource delineation drilling at the Maximus Canegrass iron ore
prospect in the Mid-West of WA. Flinders will also be entitled to receive options under the Bonus Option
Issue that Maximus announced on 20 June 2008.
R M Kennedy
Chairman"