Mount Gibson Activist Campaign, page-7

I think this endeavour is more than welcome.

This is company has been undervalued for way too long.

The board has been very lazy in regards to capital management, given the severe discount to cash the share price has traded at. This is especially so given the current iron ore price would have the Iron Hill operations in the black and value the operations at KI at around a billion dollars plus.

Premium 65% Fe is fetching around $US95 a tonne or around $120AUD - assuming costs of around $50 a tonne this would leave a margin of around $70 for the KI ore - if one was to assume that the second stage of the KI operations were too be mined then then the 20 million tonnes of KI ore would be worth around $1.4 billion. Even assuming I am 50% too optimistic its still worth $700 million.

So why is this stock still trading at a discount to cash, let alone imputation credits and why has someone shorted 14 million shares. What do they know that we don't?

The sooner someone with deep pockets makes an opportunistic offer for this stock of around 80 cents the better - there's 55 cents in cash and imputation credits - for the remaining 25 cents or $275 million they could get a mine worth around a Billion.

That's a pretty healthy return.

Let's hope the board pay out a healthy dividend this week - I won't hold my breath - probably a better chance some smart Private equity guys think about making a t/o tilt.

I think its fair to say that Iron Ore won't stay below $US50 for too long as the majors have too much debt and need healthy margins from Iron Ore to pay down their debt as their coal, oil and aluminum divisions are exactly coming to the party in terms of return of equity.

IMHO/GLTA