News: Equatorial Resources large scale iron proje, page-6

re: News: Equatorial Resources large scale ir... I don't think there was much new information out of the presentation, though like other users I did like reference to the 62%fe rock chips with low impurities.

What I also liked was the fact they mentioned that once a resource is delineated (hopefully in Q1 2011), the figures will be able to be dropped straight into the engineering studies currently being undertaken with regards to the rail and port. I'd imagine all of this information will come together to make up the DFS. To me, this is another tick in the box with management trying to get this project up and running as quickly as possible to take advantage of high IO prices before new supplies come online. EQX won't need any strategic partners to help fund the operation, it will probably be done through a debt/equity mix, so it'll be important to have the DFS done as quickly as possible so interested financial institutions can dissect the project and approve funding. I'm assuming that concerntrating on delineating a DSO resource capable of sustaining the 5mtpa operation and moving it to a JORC reserve status as quickly as possible will be the main aim of the company.

The 21st slide - "Unique Development Potential & Value Drivers" - sums it up perfectly I think. In the short term there is the DSO deposits that can be expolited using existing infrastructure and low CAPEX, and in the long term there is the possibility to increase output of DSO & Itabirite as well as develop Badondo, which can all be funded through free cash flows from the initial DSO operation.

I get more confident with this stock as time passes. The main risks are that there isn't a viable IO resource there (which I severely doubt), and the other major risks are risks all companies are facing, namely that the World economy (or just the Chinese) falls over again.