To me the main points of this that have come out have been.1....

To me the main points of this that have come out have been.

1. IFE began by recently overpromising. i.e. contractors will pay for most of CAPEX. Margins are huge. No potential problems mentioned, fast track etc. they may have done this to try and get a better deal out of the Chinese.

2. Punters jumped on assuming big profits early and ignoring the risks of starting a new operation and capital that would inevitably be needed. e.g. risks include: gov approvals, the inevitable things that go wrong and take longer than expected when starting a new operation, fluctuating iron ore prices etc.

3. TRF owns 50% of IFE and is a small cap with limited cash itself so any decisions about funding are not going include going big time to IFE shareholders if TRF can help it (and they obviously control IFE). Think of what happends if IFE go the SPP route. This inevitably has to be pitched at a much lower share price than the current price and this will weaken IFE's price. TRF's price then slides in response. TRF then needs to do it's own SPP at a lower price then the already weakened TRF price. Outcome is a signficantly lower share price for TRF and IFE and no cornerstone investor with deep pockets.

4. The sellers in the market take a short term view of IFE's future profitably and largely ignore the positive longer term benefits.

Historically about 1 out of every 100 mining resources defined ever get profitably mined. Shows you it is extremly difficult to do so. Just because it's a bull market and every two bit company spruiker is out there promising miracles doesn't mean it's going to happen. You need to compensate early stage investors for high risk. Of course they tried for the best deal they could get. No one else came up with a better offer.

Personally I like TRF better than IFE for 3 reasons.
1. TRF control IFE and decisions about IFE are more likely to be made in favour of TRF thean IFE small shareholders.

2. The free carried TRF 20% is worth a lot of money when you consider the high capital cost of any significant sized iron ore mine and the associated infrastucture.

3. TRF's rights to other minerals mean they have bugger all additional costs and possibly significant revenue from gold etc.

Cheers
hots