possibilities, page-7

Just quickly on FMG, they're financing a $8 billion project currently to ramp up production to 55-155mtpa dubbed "rapid growth" by its board. The debt might be because of this financing, though i haven't looked too much into their books to know.

Heres a quick summary of their HALF YEAR report.

Revenue in half a year was over $2.5 billion
They mined 22mt of ore
OPEX was about $39/t
Refinanced during the half putting secure notes on the market of $2 billion, then a further $600m in dec.
Profit dented by a "refinancing cost" of $700m (paying back debt) and "financing expense" of $300m (the latter i believe to be interest and the like).
$2.3 billion in the bank
And total current assets(cash and equivalents) of $3 billion.

Non-current liabilities of $4.5 billion. (includes debt mainly).

To me this a very strong balance sheet, to suggest that FMG is in trouble because you read that they have $3 billion debt is ridiculous, you should do alot more research to understand these things.

Also you have to note that all those figures about profits and expenses are all for HALF a year, bringing in $2.5 billion dollars every 6months ($1 billion of which is a free cash flow = after costs), and a huge expansion in the pipelines.

Now this was not meant to be a FMG ramp, just a clarification of facts presented earlier, though with these type of figures for FMG, we can make comparable predictions to AGO, with 3mt due to be produced in this HALF, with current I/O prices we should see revenue of close to $500-600 million flow into AGO, less costs gives AGO a free cash flow of about $360-420 for the half year, considering that AGO will have NO "financing costs" or "refinancing expenses" for the half most of that should remain as earnings.

The first post also 'implied' that AGO would pay a lot of dividends even though it wasn't expressly stated in the post, i disagree, AGO have only just begun producing, they will be spending a lot of money on development (see quarterly) over the next few years to be able to make sure that by 2015 they can be producing 20mtpa of DSO, as more cash flow comes in, to avoid debt, AGO will need to use to profits to re-invest into the company, starting their magnetite operations while their DSO operations are still ongoing would be another things they would most likely consider, once 20mtpa is coming out, they'd be able to fast track the second project into production through re-investment to further increase cash flow/profits.

It will be a while before we see a AGO dividend (similar time frame to that of FMG) but we will see the growth in the company, as that happens, share price will tag along and grow too.

Also consider this, for AGO to be at the equivalent share price/market cap as FMG today, the AGO share price would need to be at $30.

I'm not saying it will get there next year, I'm not saying it will be there in 2015, but the faster AGO can get to a similar position that FMG is in today (in terms of production, revenue, profits) the closer that share price will be.

Threats to a $30 share price = Commodity prices (I/O specifically), cost blowouts, exchange rates.

Remember AGO are taking over GIR atm, who says they'll stop there, there is more than one way to grow your company.

All the above is my opinion, DYOR.