looking forward for 50% increase in sp

After careful analysis, I sold out AGO and brought MGX and BCI. I believe that MGX is way undervalued. I'm looking forward for a 50% share price increase in MGX within 6 months time.

The total cost per ton for MGX in 2012 is (413.5m+23.4m)/5.2mt = A$84.0 per ton.

The total cost per ton for MGX in 2013 is (698.3m+30.8m)/8.8mt = A$82.8 per ton.

This isn’t too bad when you consider that the total cost per ton for FMG in 2013 is around A$70 per ton. (8120m revenue – 2466m profit before income tax) / 80.4mt production= A$70.3 per ton

With the Koolan Island ramp-up to 4mtpa, as well as the on-going cost saving program I expect the cost per ton for MGX to reduce further to below A$80 per ton.

MGX has a market cap of 763m at 70c a share,
less 376m cash,
MGX's net cooperation value is only 387m.

Assume average iron ore price for next year at US$110 or A$122 per ton, MGX has a very healthy margin of $A40 per ton. At 9 mt production rate next year, MGX will generate a profit before tax of 360m. In another words, in 12 month time, MGX’s share price will close to be full cash backing at current share price.

Not to mention, at current iron ore price of A$150 per ton, MGX will very likely to earn 100m – 120m profit in the current quarter alone.

As a stress test, even if iron ore price drops to US$90 or A$100 per ton in 2015, MGX still has a reasonable margin of A$20 per ton.