pfs quality questioned by regular fe investors

Firstly, just a comment that the PFS was signed off by reputable consultants (Calibre Projects) and the iron ore JORC, by AMC Pty Ltd.....(check out their websites if you wish)

I am actually yet to see any detail or evidence presented, as to any mistake or oversight, made by the consultants......(Calibre Projects estimate of $3.80 per Pluton share NPV.)

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Anyway...

Just to discuss a little...the reaction to the detail contained in the PFS released by the company on 6 June.

The costs doubled, compared to immediately post GFC estimates, previously presented by the company in 2009.

Also the size of the deposit, seemed a bit modest....(iron ore investors are familiar with massive magnetite deposits of millions of tons of iron ore.)

The JORC deposit was smaller than expected, and it looked small...by comparision with most of the others. No DSO operation at this stage.

....Management credibility was immediately questioned - and the shareprice tumbled.

Would you agree ? - these factors combined and were the reason for the selloff!!

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In actual fact, I think funding will be forthcoming for this project ...funding will instantly vindicate longs and gap sentiment in the company.

Partly for the reasons discussed, as follows:


So quickly working through those negatives (that led to the selloff)....the company should have briefed the market, as to the 2009 difference. However the $700m capital, (without need for rail or port) should have surprised nobody, researching other benefication ventures. (but sure a creditability negative). The 4.4mtpa however, exceed that of previous estimated from the company.

JORC deposits...Pluton iron ore resources tonnes exceed that of $1.8b company Mt Gibson Iron Ore (105mt)....they are also in excess of that of Portman Mining (taken over by North American giant Cleveland Cliffs in 2006)

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Higher grade Indicated Mineral Resource component of 54 Mt @ 51% total iron and 52.5% weight recovery using a cut-off grade of 50% total iron for the Yampi Member.

In addition, the Company is also pleased to announce an Indicated Mineral Resource for the Wonganin Sandstone of 337 Mt @ 21% total iron (no cut-off grade applied).

The global Indicated and Inferred Mineral Resource tonnes reported in accordance with the JORC Code, now stands at 547 Mt for the Hardstaff Peninsula, an increase of 64Mt.

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MGX high strip ratio DSO iron ore is mined at $55 per ton...61% fe (need to rail, pay port fees)...compared to PLV $62 per ton (both pre royalties) - however PLV high grade ore pay achieve $30 per ton over and above MGX Platts index (today about $150 FOB).

Management credibility ?...why not talk to, or meet with the CEO (when things settle down)....or review the way Native Title issues have bee handled by the company, and make up your own mind.

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My views....like everybody though, looking forward to see how the share trades Friday.