jorc & iron ore reporting june 2009

http://www.asxgroup.com.au/media/PDFs/20090603_mike_young_jorc_seminar.pdf

Mike poses a question on page 2.

The answer on page 18 is Mike indicating how a resource with high sounding numbers in regards to Fe grade and deposit size, can potentially be the most risky as an investment.

1 ~ A high cash cost (opex) Magnetite slurry. A low DMTU would mean the mine isn't viable. The 1,600Mt is useless without a buyer.

2 ~ 61% CaFe is infact an ordinary grade for a fines product post sintering.

3 ~ Probably the best of the three. Even though 3 has a much lower resource than 1, 3 will most certainly sell all of it's deposit. Also 3's margins would be much higher than 1's, meaning more profit per tonne. 3 has a higher CaFe grade to 2 since the ore in 3 still needs to be sintered resulting in an Fe upgrade that would exceed 2. Infact 2 would probably only be suitable in a blend unlike 3.

I know what Mike's hinting at with this example. It's rather clever. As an MD of a IO company, he can't use actual mining companies as examples for 1,2 and 3.