Convincing Mal Randall to join the board of recent Australian...

Convincing Mal Randall to join the board of recent Australian Stock
Exchange-entrant Iron Ore Holdings (IOH) was not a difficult task.

Not because Randall was desperately looking for something to do at that
time; with directorships of five companies, including Consolidated Minerals,
Titan Resources and Thundelarra Exploration, he had plenty on his plate.

Instead, the veteran of 25 years with Rio Tinto, the majority being with
Hamersley Iron, was simply captured by the quality of ground being offered
to him.

"I read the draft prospectus coordinated through Hogan and Partners to raise
$6 million and I was honestly taken aback by what [IOH technical director]
Derek Ammon had pegged. I thought it was an opportunity too good to walk
away from. Given my iron ore background, I knew these sorts of opportunities
did not come up often."

That opportunity was a collection of tenements surrounding the major Pilbara
iron ore mines of Yandi and Yandicoogina, and the key attractions of the
company were simple.

"We're in the right commodity, at the right location, at the right time," is
Randall's basic summation.

The three-way combination also obviously pushed the right buttons of the
Australian investment community, which pumped the company's 20c IPO shares
to a value of 40c by the close of its first trading day in early-May.

Pulling in a double-bagger performance in a day was enough to grab the
attention of the mainstream press, and the company awoke on day two of its
public life to find itself in headlines throughout the nation's business
pages.

It was, to say the least, a fairly eye-catching manner in which to make its
public debut. But take a closer look behind those three principles - right
commodity, right location, right time - and it is easy to see how such
interest was generated.

Anyone who has kept an eye on the resources industry of late will know iron
ore has been running hot.

The world's major iron ore miners recently won an unprecedented 71.5% price
increase in their iron ore supply negotiations with Japanese steel mills,
and China's seemingly ever-expanding demand for steel feed has sparked a
wave of project proposals and iron ore IPOs.

For Randall, the strength of the iron ore story lies in the forecast that
world demand for seaborne iron is set to grow from 580 million tonnes in
2004 to some 820Mt by 2010, with the bulk of that increased demand coming
out of China.

Even allowing for the successful introduction of bolstered supply from
expanding BHP Billiton and Rio Tinto operations, not to mention potential
new feed from the presently undeveloped Hope Downs and Fortescue Metals
Group projects, Randall says there will be sufficient supply shortfall to
sustain strong iron ore prices for years to come. Hence now is the right
time to launch a company like IOH.

Which brings us to location. There is arguably no better address in the
world iron ore game than the Pilbara of Western Australia, home to the great
money-printing mines of BHP Billiton and Rio Tinto.

Randall describes IOH's land position - sandwiched about 100km north-west of
Newman and a similar distance east of Tom Price in the heart of arguably the
world's greatest iron ore province - as "the Pilbara equivalent of St
Georges Terrace", Perth's main commercial thoroughfare.

IOH's five iron ore projects - namely Lamb Creek, Yandicoogina Creek, North
Marillana, East Marillana and South Marillana - abut the tenements home to
BHP Billiton's Yandi mine and Rio Tinto's Yandicoogina operation.

Given the robustness of the iron ore industry, it is hard to fathom how a
small company like IOH could gain access to projects so close to not one but
two existing operations. According to Randall, the tenements were picked up
by Ammon at a time when the iron ore majors believed they had sufficient
reserves to feed world demand for the foreseeable future.

The proximity of IOH's tenements comes not only with great prospectivity,
but also potentially great infrastructure options.

The rail links of both BHP Billiton and Rio Tinto run directly through IOH's
tenements, and the proposed Hope Downs rail will pass just by IOH's
easternmost tenement boundary.

Third party access to iron ore rail infrastructure, both existing and
proposed, has been a topic of debate and even legal hearings in recent
years, despite the WA State Government mandating that such infrastructure
must be shared with new operators in the region. Randall is confident the
situation will have cleared up by the time IOH makes its push towards
production.

Additionally, the fully paved Great Northern Highway runs past the IOH
tenements all the way to the Pilbara shipping town of Port Hedland,
providing a fourth potential transportation option.

Truck-based transporting of iron ore may not yet be a reality in the
Pilbara, but iron hopeful Murchison Metals is planning to truck its produce
over 500km to the port of Geraldton. In comparison, IOH is 300km from Port
Hedland.

Randall, however, is careful not to delve too deeply into hypothesising over
potential methods of transport. Not yet, anyway.

The tenements host numerous outcrops of pisolite, the dominant type of iron
ore shipped from the Pilbara, and numerous grab samples from surface have
returned high iron ore grades also low in impurities such as phosphorous.
Furthermore, independent geologists have hypothesised the possible presence
of extensive iron palaeo-drainages in the leases.

But for now, priority number one is establishing sufficient resources and
reserves within IOH's tenements.

It sounds an imposing task, but Randall assured RESOURCESTOCKS it wasn't a
question of if the projects host iron, but how much.

Randall draws on an analogy he picked up during his numerous business trips
into China during his 25-year career with Rio Tinto to illustrate the
situation facing his company.

"It's a bit like when the young chef asked Confucius about the best recipe
for cooking Peking Duck. Confucius turned around to him and said, 'First my
son, get the duck'. I know that with Iron Ore Holdings we have the duck;
it's really now a matter of determining how big it is, and how juicy it is,"
Randall said.

As a result of this philosophy, IOH has so far abstained from entering into
any memoranda of understanding, off-take agreements or "binding contracts"
over any future developments, instead preferring to concentrate on plumping
the duck before determining the best recipe for cooking.

It is a difficult ask not to look beyond that task, particularly when the
pisolite ore within IOH's domain is also capable of being directly shipped.
Referred to in the industry as DSO, or direct shipping ore, the ore must
simply be dug up and crushed before it can be shipped, a far less
complicated - and substantially cheaper - process than the concentrating and
pelletisation of other ore types such as magnetite.

Most notable surface grab samples from two of the highest priority
tenements, Lamb Creek and South Marillana, assayed an iron content as high
as 60.81% (South Marillana) and a phosphorous content of 0.031% (Lamb
Creek).

Furthermore, recent scrub fires brought into stark relief several other
outcrops previously obscured by vegetation.

According to Randall, the projects already have visible ready-to-drill
targets, but IOH has, nevertheless, secured contract geologists to work to
generate further targets through remote sensing, aerial photography and
on-ground geological mapping.

Following mapping and target identification, IOH plans to commence drilling
as soon as possible with a view to announce an initial resource soon
thereafter.

Randall pointed out that IOH's market cap of just over $26 million is
comparatively smaller than many of the other iron ore hopefuls in the
region.

"It wasn't that long ago that some other iron ore exploration companies were
a 35c stock but are now valued in the order of half a billion dollars," he
said.

IOH boasts a particularly tight share register, with only 47% of the
company's 70 million shares tradeable. Adding weight to the register is the
presence of Sumisho Iron, a subsidiary of major iron ore importer Sumitomo
Corp of Japan.