oakagee, page-29

Hmmm just listened to the radio broadcast.

Barnett says Mitsibushi can fund it, MMX is a small mining company and Chinese can fund it.

He says case for OPR is stronger than ever so its definitely going through, I think.

He constantly uses the word "align" in reference to funding it.

I think he wants to know how MMX are going to raise the funds to develop it.

We know OPR is about $4bn, we know that the Govt has committed $0.6bn which means the partners (MMX and Mits) need to fund about $2bn each.

Mits have no problem getting funding, but I think he wants to know how MMX plan on obtaining their $2bn of funds.

I dont think he wants this to rely on the payment due from Mits for Jack Hills.

My guess is currently Mits were meant to arrange financing for OPR (inc MMX's share) and secure it against Jack Hills, but maybe they don't want to.

So my guess is the Chinese take a share in OPR - reducing MMX's stake in the Project, and the amount of funds that Mits have to obtain secured against Crosslands on MMX's behalf.

Best case scenario, of course is somehow Mits and MMX maintain their 50-50 share in OPR.

If you assume a 15% return on investment, and 10 times P/E.

If MMX has 50% share, cost $2bn, Earnings of $300m, Gives projected Market Cap of $3bn, SP of $7.20

MMX Share Cost EArnings Proj MC Projd SP
50% $2bn $300m $3bn $7.20
40% $1.6bn $240m $2.4bn $5.80
30% $1.2bn $180m $1.8bn $4.20
20% $0.8bn $120m $1.2bn $2.90
10% $0.4bn $60m $0.6bn $1.44

So even if MMX only retained a 10% share, (which you would think is very unlikely since they have done a lot of the Engineering work) then that would warrant a $1.44 SP based on future OPR earnings ALONE.

Remember, though if this was the case, they would sell their 40% share to someone and this would not be free. You would expect them to recoup at least the work which they have currently put into the Project - so this would result in a higher SP.

Then off course, the fact that OPR would then have a green light woould mean that MMX would create further value for shareholders from Crosslands (including the payment from Mits) so this to would lead to a much higher SP.

Obvioulsly that scenario is worst case.

IF MMX retain their 50% share, this gives a base price of $7.20 from OPR earnings alone.

So I think any news on OPR is good news. They need to just hurry up and work out how they can "align" themselves.

Disclaimer: the above represents my opinion only and should not be used as the basis to any investment or financial decision. Always exercise your own due dilignece first.