Hi.I just had a look at that valuation in the prior post again....

Hi.

I just had a look at that valuation in the prior post again. $140t is too high. The valuation should've been done at $130t.


That aside, I'm still VERY confident of 6Mtpa for CY13. The public line from BCI management is 5Mtpa for CY13 with the possibily of a sprint capacity to 6Mtpa if FMG has the space. That's the only responsible thing that management could say. And going by management's history of understating things, rather than overstating things and then disappointing it's shareholders. It's inline with what we've come to expect from BCI management. But this is my only practical conclusion on why I'd be surprised if the NJV didn't do 6Mtpa for CY13.

Obviously no mining company can switch on a further 1Mtpa like you do a tap. It takes months of planning to implement. The process of increasing from 5Mtpa to 6Mtpa is currently underway. The crushing plant is having it's capacity increased from 4Mtpa to 6Mtpa as I type. And there's those 3 extra PowerTrans coming online shortly.

Getting to my point ... in a few months time BCI will be in a position to say to it's JV partner FMG that we have implemented the plant required to do an extra 1Mtpa as discussed through 'sprint capacity', it's now over to you guys at FMG, are you in a position to shift this ore to port? I'd be *GOB SMACKED* if FMG turned around to say, " Opps, didn't you get that memo. You didn't need to get your contractor Watpac to spend millions upgrading the crushing plant. You didn't need to get your haulage contractor Toll to recieve the extra PowerTrans trucks and spend millions in the process."

Guys, it just doesn't happen that way. You don't ask contractors to spend millions implementing plant infrustructure, and then say to those contractors, that those millions spent wasn't required. Besides, could anyone imagine BCI management ringing up the ladies/gents on the ground asking them to cut back on production rates. It's not going to happen. And it also makes me think that if BCI does sell or blend (same thing) the lower grade ore as well (It will, trust me). 7Mtpa is realistic, infact, it's odds on as BBY's Mike Hallowell suggests.

When BCI does it's estimate of what can be exported per year. The overburden must be taken into account. Obviously overburden (waste) needs to be shifted from Outcamp to get to the 57%+ Fe DSO. This waste contains lower grade ore (sub 57% Fe) and clay sections. If my calculations are right, there should be over a million tonnes of low grade ore shifted from Coongan and Outcamp combined per annum. As mentioned, this isn't part of BCI's export figures at present. But it's there. It's been hauled away and is stockpiled. What if that stockpile was placed onto a FMG train or blended with higher grade ore and then placed on a FMG train? Well, wouldn't that mean that another 1Mtpa has just been added to the NIOJV's export figure per annum?

7Mtpa for the NIOJV, or 3.5Mtpa for BCI CY13. I also totally agree with Hotlegs, the NIOJV will eventually be exporting at a higher rate then AGO. Compare market caps of AGO and BCI.