midwest iron ore comparies reserves

Nice way to highlight the explosive upside of UMC.....(should they prove up reserves)......is to look at the current proven reserves of those handful of iron ore companies in the midwest......and their market capitalisation.

Firstly in doing any sort of comparision....note the midwest does not have rail or port facilities......other than the congested shallow harbor facilities at Geraldton.....and a narrow gauge rail line used only by MGX. Specifically the issue is :

Battle looms on Mid-West rail
21st December 2006, 14:15 WST

The head-to-head struggle for infrastructure supremacy in WA’s emerging Mid-West iron ore region has intensified with Murchison Metals launching a stinging attack on the plans by rival rail and port developer Yilgarn Infrastructure.

Murchison said yesterday a consulting engineer had studied various rail route options and the one that closely resembled plans by Yilgarn would cost an additional $1 billion in capital and operating costs in the first five years of operation.

Murchison and fellow iron ore miner Midwest Corporation, which is also looking at the region’s infrastructure needs, are focusing on a direct rail link between Oakajee and their neighbouring Weld Range and Jack Hills iron ore projects, northeast of Geraldton.

Yilgarn, which is headed by Sydney infrastructure expert John Saunders and former State Labor deputy leader Mal Bryce, is promoting a rail route that heads east to Yalgoo before turning north towards Jack Hills and Weld Range.

Murchison executive chairman Paul Kopejtka said the study by engineers Maunsell Australia found the more direct, so-called northern rail route was clearly the best choice using a range of economic, social, environmental, operational and efficiency criteria. ______________________________________________

MIS......$160 million.......reserves 7mt @ 58% fe
GBG......$330 million.......reserves 14.1mt @ 60.6% fe
MMX.....$460 million.......reserves 75.5 @ 62.2% fe

Note:fully diluted market capitalisations are shown. These companies are doing OKl.....with MIS and MMX shipping ore via road transport and GBG hoping to get a big magnitite project up. Problem is...until that rail and port is built....profits are going to be very modest.

Current situation with the new port/rail....is that the group hope a China based group will pay the initial capital (about $2 billion)...and the mining company will rent....user pay for its use. Lots of hard yards to be done....and look at the caps of those companies.

No such problem in the Pilbara.

If UMC can quickly prove up reserves.....you could have a situation of the shareprice virtually gapping 300 or 400% overnight.......based on the valuations in the mid-west.