I was lucky enough to make it to the Iron Ore Investor Presentation put on by Canary Events, a first class presentation and highly recommended to anyone thinking of going to future presentations.
It was nice to meet up with filcorp, a very nice bloke and believe me when I told you he went to a lot of trouble to accomodate you all, he had a couple of A4 pages with all your questions that you raised on this forum, so don't forget to thank him, he went to a lot of trouble just to get there and told me to tell you all that he will post what he can tomorrow.
I will brief you all with what I can remember, there was a lot of information presented all up.
First of all let me say how nice a guy Kevin Wills is, filcorp and I were calling him doctor Wills but he insisted on us calling him Kevin. He spent a good hour after the presentation speaking to shareholders and filcorp and I probably got a good 20min to half hour with him. My general impression is that this guy is a very knowledgeable bloke, but was mindful of disclosure obligations so he could only answer what he could. There were many questions thrown his way about the process of "becoming a producer", from the prefeasibility study to the drilling to the negotiations for ports and other infrastructure and he seems to be up to speed with all the processes occuring on many fronts. Of course this is what you expect from a CEO so I was feeling very comfortable having this guy steering the company to it's objective of becoming a producer.
Tom Price, a commodities expert from UBS Equities, kicked off the meet with some projections for the Iron Ore Sector and on that front it all looks very good. China is driving demand with an effeciency that is unprecedented, India too is developing but not with the same aggresiveness and effeciency that China is and even the USA might contribute to overall I/O demand. This demand is expected to keep prices ticking higher and that is why the majors are pushing for higher prices and trying to set up a quarterly indice so that the producers can keep getting top $ while also allowing them to regulate supply. Importantly for FMS he sees juniors playing an important role in the supply chain because of this demand. Anyway, you will be able to see the interviews on the following link, they said it would be available tonight but as of 5 minutes ago they weren't there so maybe give it a go tomorrow. Click here:
The Tom Price interview is highly recommended too, mind you each viewing will use up about 100mb of your internet memory so just a warning for those on a tight cap.
From the discussions with Kevin here is what I can remember and confidently repeat without twisting his words;
- we can look forward to an upgrade in the resource towards the end of April or early May. A lot of the inferred and indicated resources are still "open" on many fronts so more drilling may substantially increase the resource.
- FMS has had many approaches from Asian steel mills etc wanting an exclusive tie up with FMS. Kevin says this is not in the interests of shareholders as he wants to negotiate when FMS is worth a lot more, thereby maximising shareholder value, to do so now would be selling out without adding the potential value that FMS has before it.
- Kevin has had a lot of negotiating with the majors about infrastructure and currently there are six or seven options that are being considered. There is a lot of capex being directed at Pilbara infrastructure at the moment and that is good for FMS looking ahead both in terms of rail and ports.
- Again, the prefeasibility study is important to determine the best course of action for FMS so no decisions are to be made before then. Kevin is very happy with Worley Parsons and are doing a great job as far as he is concerned.
- There will be no capital raisings in the short term, a decision to go to DSO or the infrastructure/beneficiation route will determine this course of action. If they go the fastrack option to DSO then further capital raisings may not even be necessary. If they go the longer term infrastructure/beneficiation route then capital raisings will have to be undertaken in the long term.
While I feel quietly confident, another impression I was left with and an important one is that there are still a lot of stars that have to line up for FMS, going to production is not an easy path and there is a lot of work to be done so we all need to keep doing our research and keep an eye on China and global demand.
Long trip to Sydney for me so a bit on the tired side but very glad I went as I feel FMS is in good hands, while there is a long way to go I feel very confident Kevin is steering us in the right direction.
Canary Events put on a first class show and the biscuits and profiteroles served with the coffee were 5 star so I highly recommend their presentations if you were ever thinking of going.
So filcorp, over to you mate....
Cheers all.
FMS Price at posting:
13.2¢ Sentiment: LT Buy Disclosure: Held
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