In the scheme of things all AGO needs to do is survive for next...

In the scheme of things all AGO needs to do is survive for next few quarters. AGO has projected mining of 1Mt of Iron ore for the 2009. Will there be demand for steel in 2009 and will there be a market for AGO Iron ore... The global consumption of Iron Ore is around 1.2BT or 1.4BT (dont quote me on that but i think the figures are close). As AGO is a start up mining company it never had the prior opportunity to formalise a contract with big steel producers when the days were good. And now negotiation are harder as the steel producers have the upper hand, unless you surcome to the bargaining pressures and cheaply sign on the dotted line.

The worst case scenario for AGO - NO binding contract with a steel producer. So that would mean sell on the spot market. And as we speak spot market prices are sliding, but the margins are still enough to earn a decent profit. AGO needs to show the world how resilient it is... I cant see AGO being hurt all that much in todays slowing economy, the company has got the smarts and the cash to ride it out, besides only needs to sell 1MT of ORE. But Companies like FMG perhaps should be worried...

With the quality of ore AGO will be mining I have no doubt that 1MT will be sold in any market whether spot or fixed contract.... And the main objective for AGO, sell the ORE, but never sell yourself cheaply or bargain yourself into bankruptcy. AGO is in it for long time...