maslow, the fmg value includes the massive infrastructure investment which could be argued brings the value back by 50% to $2 a tonne. The access by flinders to fmg infrastructure will be charged accordingly by fmg, who knows at what but let's say a guess at equal par value plus a 20% profit. If we forcast the share price at ten times it's current for Flinders from 10c to $1 to bring as on a par with fmg costs, for the access costs and rail fees etc fmg would expect bring us back to about 50c, 50c fair value less the 20% profit puts our share value at about 40c. Of course these are VERY rough philosophical guesstimates. Yoou could probably take another 10c off for set up costs of infrastructure that flinders will need to do to get the ore to the rail spur when it is completed by fmg to serenity. The main advantage is we don't have to fund the infrastructure through borrowings. More like we'd just pay a price per tonne to cover fmg on costs so they recover fair commercial value for their investment that Flinders and no doubt many other companies will negotiate deals with fmg for utilising the infrastructure. It's very intelligent of Andrew Forrest to do this as he can get a return on any under utilised assets which is further testament to his good vision and commercial mindset. The rio and bhp refusal to allow other companies to use their iron ore infrastructure is about blocking the market rather than maximising returns for shareholders. They want to fight over the existing pizza rather than adopt the more intelligent approach of forrests of making the pizza biggger so everyone can get a good feed. fs.
FDL Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
