Pellet Price, page-517

Hi Greatone

Fully agree with this company being in great shape, however I don't think there is any need to build their cash pile any bigger than it currently is.

Although a downturn in IO prices is certainly possible and it is highly likely IO prices will go lower sometime in the short to mid term. GRR's high grade pellets will stay in demand in a world going green with countries and companies looking to reduce their CO2 and people in upcoming markets starting do demand cleaner air as they move away from poverty and into middle class.... So I don't see them having a long period of making loses and the current cash reserves are well above adequate!
And honestly if they loose more then 100 to 150M its probably time to shut shop for sometime instead of continuing burning money and shareholder value. An unlikely scenario IMO

You mention growth, however at the current mine site the potential for growth is very limited due to the max capacity of the slurry pipeline which from my understanding is 3Mtpa. And the capital expenditure needed to upgrade this would only be warranted if the current ore reserves would be upgraded very significantly...

So as I see it GRR can either use its capital to invest in a new mine, hopefully IO and similar high grade product as they currently produce, like Southdown (there are several other large high grade IO projects in Australia that are pre production (MGT, CAP for instance) there may be options there) or some other mining venture that can produce value for us share holders.

The other option is simply start paying out much more then its current 20 to 25% of profits. I really don't think it is reasonable for them to just continue to build cash at current rates with no well defined plan for using it and just let it sit on the bank. Don't get me wrong, I understand the current high profit situation is exceptional and I am not saying they have to decide this within the next months or anything, but if IO prices hold up anywhere north of $120 by the end of the year and they indeed have hundreds of millions more in cash then currently I would like to hear something from management about their plans with (our) cash.