next leg up, page-18

Nose knows nothing. Twenty-nine years old, yet so bitter and twisted. Move on young man...

I shouldn't dignify your antagonistic postings with a response, but I can't resist the chance to expose your naivety. I'm not blind to the risks of FWL, but here are some reasons why, for me, FWL is an attractive speculative investment:

- established market for MPI at 96%FE (how can you suggest there's no market? MPI nuggets sell at 4 to 5 times the value of the best ores!)
- leading steel companies are signing up for ITMK3 technology because of economic and environmental efficiency
- there's growing pressure on these same companies to reverse integrate and secure resources to bring down supply chain costs and reduce volatility. They are actively looking for opportunities. Whether FWL ticks all their boxes remains to be seen.
- access to infrastructure and low mining costs (favourable geometry and low strip ratio) mean FWL's expected production costs are below US$300/t, well below long term average and current MPI FOB prices approaching $600/t.
- based on the expected 50:50 JV arrangement and a $750m - $1 bn project cost, FWL will need to finance $375m - $500m. Project financiers should be willing to debt fund all of this, provided there's a solid offtake partner, that projected production costs compete with the world's best in the lowest cost quartile, and that there's a positive (i.e. >$0) NPV (FWL estimates it will be hundreds of millions). Even if the banks require some equity, FWL should still be attractive after dilution.
- estimated after tax revenue is greater than $125m per annum (and growing with MPI price). Plenty of profit margin to keep the banks comfortable (and investors happy!)
- with regard to the Haematite, creating a conceptual target is normal practice. We all understand, Nose, the limitations of this claim, but it serves a purpose. 1.5m tonnes p.a. is a reasonable target based on preliminary exploration of outcroppings and deposit calculations. A drill program is certainly justified.

Rather than writing off FWL, Nose, you should be asking yourself "does the share price reflect the risk/opportunity?". Personally, I think it does.

I don't mean to look down my nose, Nose, but you're nearly 30 years old. It's time you started using the grey matter. Try offering some constructive and considered analysis...