Although Sherwin is not mentioned, this should be a very good...

Although Sherwin is not mentioned, this should be a very good sign:

http://www.theaustralian.com.au/business/city-beat/buy-emerging-iron-ore-plays-says-citi/story-e6frg9no-1225931662196

Buy emerging iron ore plays, says Citi

CITI reckons the emerging iron ore sector looks bright and has initiated coverage on a handful of stocks, handing out four "buys".

Magnetite play Murchison Metals was the only stock of the five to be given a "hold" recommendation due to uncertainty surrounding the $4.4 billion Oakajee Port project.

Oakajee Port is crucial to unlocking its Mid-West projects in Western Australia.

In order of preference, Citi likes Gindalbie Metals ($1.30 target), Atlas Iron ($2.90 target), Grange Resources (80c target) and Mt Gibson Iron ($2.30 target) and has a buy recommendation on the four.

"With production ramping up, cash flow is generally very strong and prevails of the GFC a fading memory, the outlook for the sector is looking bright," said Citi analyst Clarke Wilkins.

The move follows Merrill Lynch on Monday initiating coverage on Atlas and Gindalbie with buys and $2.85 and $1.43 targets, respectively.

Atlas and Mount Gibson mine hematite ore, similar to the majors like BHP Billiton, which is a higher grade and less capital intensive than magnetite.

Wilkins said all five stocks have substantial shareholders that somewhat restrict the liquidity which makes them less attractive as M&A targets relative to coal miners.

Citi is forecasting "all important" Chinese spot prices of $US145 per tonne for 2011-12.