Lets go to todays presentation: “The resource at the Ridley Magnetite Project at Pardoo is already at 853 million tones at 37.2% iron…with a target of 1.0 to 1.5 billion tones”. Now halve that proven resource, because it will have to be blended to 67% to be high grade. Now multiply by $30 per tonne operating margin as stated. That’s 12.8 billion dollars profit, clear, after operating costs, at one project, right next to the infrastructure at Port Hedland. Now, divide that by 215 million shares on issue. Is that right? How many options are out there? Well, at 215 million shares, that’s $59 per share. But let’s be conservative and use the 10mtpa x 25 year mine life. “That is 7.5 billion dollars in free cash for the life of the mine” as said in the presentation. And let’s drop the operating margin by 33%, well, just because we like to be conservative. That drops it to a $23 per share. Based on a very conservative estimate from just one of several projects. Let’s see, they are now currently trading at $2.12 Hmmm…what to do..?
AGO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
