A past opinionBarry Fitzgerald The Age The July 2006 float has...

A past opinion


Barry Fitzgerald The Age

The July 2006 float has been quietly laying the groundwork for its move to iron ore producer status by the end of (calender) 2008 no less.

About 17 per cent is owned by a couple of Chinese steel heavyweights.

Centrex's stomping ground is South Australia's Eyre Peninsula — it ain't the Pilbara, or WA's mid-west. But the Eyre Peninsula is known for its hematite and magnetite potential. What's more, the coastal positioning of the deposits and the presence of under-utilised rail and ports up and down the coast means Centrex's iron ore is not as stranded as the WA hopefuls.

That hit home last week when Centrex was able to reach an agreement with US-owned Genesee & Wyoming for it to rail direct, transporting iron ore (hematite) from Centrex's Wilgerup project near Lock to Port Lincoln, subject to Centrex first proving it's got an economic mine on its hands.

The agreement with G & W covers 2 million tonnes of hematite annually.

Success with a relatively short-lived Wilgerup would provide Centrex with the cash to chase the main game, a 3 million tonne-a-year magnetite export project with a mine life of more than 20 years.

Thinly traded Centrex last traded at 15.5¢ for a market cap of $33 million, which makes for an interesting comparison with the much higher multiples the WA hopefuls still command.