hawsons could be truelly massive, page-3

The article you posted is a great read and verifies that the CAPEX and OPEX for magnetite mining is very high.

I imagine in 2011 when they go for a full feasibility study on Hawsons, they will determine the costs of the plant, transport etc.

So for your 1st point, I agree, the true value of Hawsons can only really be realised when we know what we're going to have to do to get that magnetite processed and ready for use. Having said that, I have a feeling that given BMG will be tieing up 80% of the iron, they will be contributing the majority of the outlay in the development stage. CAP will still have to fork out their fair share, but fixed costs such as transport infrastructure won't change too much whether your iron deposit is 100Mt or 1Bt. This is the beauty of the JV in that CAP won't have to fork out some massive amounts of money for these upfront payments because they share the load with BMG.

Ofcourse the variable costs in the plant power supply etc will be quite large and right now I don't think we have enough data to speculate on how much this will be. If it means anything, GRR seem to be on the higher end of the scale for these variable costs, so the comparion is probably realistic enough in those terms.

With your second point, obviously the idealistic approach for any company is to stay away from dilution. $20M won't carry us far if we are going to be assertive with getting the mine into development, so along the way there will be some capital raising, unless ofcourse we get a loan. I have no idea if loans work in this situation because we are already giving most of the costing burden over to BMG.

But let us not forget that the JV clearly states CAP are free carried for some 'x' amount of the project. Nick hasn't really been clear with this free carried thing, but it appears that for at least some parts of development BMG will be taking full care of things.

So I guess the plus-side for CAP here as compared to other magnetite miners is that we share the fixed upfront costs with BMG for things such as transport infrastructure. Furthermore we are free carried for some portions of the project.

I think when you stand back and have a look at things, we couldn't ask to be in a better position with Hawsons.

1. The costs will be large, but BMG will be there to bare their fair share of the load.

2. We have a supposed massive resource, and it could compare to the heavy weights in the industry if speculation is anything to go by.

3. Nick is a hardened experienced director and knows how to steer a ship through these sorts of projects.

It appears as though things are shaping up quite nicely on the face of things.