I prefer MGX it is mining Haematite right now and is fair value...

I prefer MGX it is mining Haematite right now and is fair value based on these operations alone. It has upside with magnetite project JV with Shougang if they go ahead and pellet plant. These 2 projects are free options based on the current share price and would add significant upside.

GBG also has great potential but also greater uncertainty, the last broker report (Southern Cross Equities) on their website does not have them earning a profit till 2008 with earnings exploding in 2010 putting them on PE of about 3. Now that is tempting but it is 4 years down the track.

I prefer to sit in MGX and if SHougang says okay let's go, MGX should have a good rise, and then maybe I will switch to GBG, since I can't see a big bang in the short term.

Having said that I don't follow GBG closely so maybe I have misread the situation with them.

Both look very good in terms of giving the Chinese a way to break the RIO/BHP duopoly and I am sure will look even better if we get a good iron ore price outcome in the next few weeks.