Having held FEX for awhile, two things strike me when I look at...

Having held FEX for awhile, two things strike me when I look at their SP in relation to IOP:

1. Hedging takes the edge off the volatility in both directions. If the IOP rockets to $US150/t FEX only gets that benefit on a smaller proportion of its sales. Conversely, if it dives, we are still getting the higher hedged amount!

2. The acquisition of the 15mt Shine Iron Ore mine sounds great but at 58%Fe the IOP will be discounted. Imo it will be hard to see us making much from this unless we can get our costs way down. FMG makes good money because their costs are down below $20/t whilst we are up above $70! The Weld Range deal is more promising at 61% but it is still need to get all the approvals before mining can start.

Whilst the deals and increased IOP should be increasing the enterprise value, the deals have also diluted the share holding. The next 6 months will be telling if we see a combination of reduction in costs, increased volumes and some mining approvals. These will imo indicate that growth is real and that the investments are going to realise some good value. Fingers crossed, we start to see some upside.