RHK (ASX) Other Options

Originally posted by Thorium1 ↑

I have been watching this stock with interest and have recently taken a position.

For what it's worth my view is that we are clearly in a standoff position. Todd need this project to progress their port and rail operations and FMS need to do a deal with Todd or someone else.

It is inconceivable and naive to think FMS can develop this project in their own right and quite unlikely that they will be able to quickly execute a deal with Rio Tinto or FMG.

Whatever transpires FMS management and shareholders are likely to not achieve the value being touted on HC

When iron ore prices were much higher than what they are now, BC iron were forced to give away a lot of value in order to obtain use of FMG's port and rail operations. This is the main barrier to entry of all wannabe iron ore miners.

It took two generations of Handcocks to achieve a Handcock owned and operated mine with their own rail and port and even then they still engaged significant partners.

I don't believe that management will be able to pull a deal like this with FMG however there are a number of other medium and large contractors that have the relationships with FMG that might be able to

These include:

Macmahon
Thiess Mining
Nrw
Downer (although they seemed to be aligned with Todd)
Mineral Resources

all of these companies have idle machinery that is costing them money and are very keen to win contracts.... Are they keen enough to buy one? With $100 million of tax losses as a kicker, I think it's a distinct possibility

FMG's Solomon project is close by and should be able to swell to support another 5-10 mtpa

If I was ocj I would team up with the shareholder group and request a board seat (if they don't have one). I would then start approaching those above with a view to arranging a competing offer

The current offer is low ball but I think many people are getting over emotional about the resource rather than looking at the big picture. There are so many fantastic iron ore resources that are worth are fraction of their resource value because they do not have access to port or rail infrastructure. These cost billions to develop and the companies that build them will exhaust all legal means to ensure others can't use them.

Whoever gets FMS will either need to build there own port and rail (Todd) or do a deal with FMG or Rio and this deal is unlikely to be extremely favourable to shareholders (but it might be better than the deal we have) i can't see anyone paying 10 cents and most likely it will be less than 5. The alternative for shareholders is no deal is done and more years of frustration and dilution.

if I was Todd, I would be talking to OCJ extending and increasing the offer to something acceptable to them and getting the deal done quick because It won't take long for some of these contractors to start trying to knock out a deal

Expand

Wise words Thorium. I think you are spot on. Realistically I am hoping for a final offer of 8c but the reality is it will be less than that. Todd "know" that management's talk with 3rd parties is just that "talk". They have been "talking with 3rd parties" for years and nothing has ever come of it. If other parties (incl FMG etc) were not interested in FMS when I/O was $170tonne why would they all of a sudden be interested at $60/tonne. There is no 3rd party and unlikely to ever be one. Stranded I/O deposits have little value no matter what their reserves are like. Look at SDL, talk now of receivership with 2 quarters of cash left and no prospect of a CR. The fact is Todd is in the box seat and they know it. They have no competition. Reality. If they walk away from this deal our sp will most likely drift back to 0.007c.

No.	Vol.	Price($)
1	1978	87.0¢

No.

Vol.

Price($)

1978

87.0¢

Price($)	Vol.	No.
88.5¢	602	1

Price($)

Vol.

No.

88.5¢

602

No.	Vol.	Price($)
1	1978	0.870
1	5753	0.860
1	882	0.850
1	10000	0.840
1	15	0.830

No.

Vol.

Price($)

1978

0.870

5753

0.860

882

0.850

10000

0.840

0.830

Price($)	Vol.	No.
0.880	20000	1
0.885	602	1
0.890	2368	1
0.910	20000	1
0.950	8667	1

Price($)

Vol.

No.

0.880

20000

0.885

602

0.890

2368

0.910

20000

0.950

8667

(20min delay)
Last 88.0¢		Change 0.000(0.00%)		Mkt cap ! $175.8M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

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