Hi Folks,I've spent a good few hours pouring through the notes...

Hi Folks,

I've spent a good few hours pouring through the notes to the accounts for IGO over the last three years, trying to reconstruct them, to get a good grasp on the underlying profitability of Long, and where the money is going.

We've spent about $60mm on exploration OUTSIDE of Long in the past 4 1/2 years, with imho some pretty encouraging results.

Even for the 09 FY once you strip out the interest income and various exploration and investment w/o outside of Long the margin is pretty impressive. The reported NPAT for the group just does not fairly reflect the NPAT from the mine. We have a typically loss making (in accounting terms) exploration entity (mostly gold) stapled to a mining entity which in itself is spending and expensing more than enough to sustain it's reserves.

From reading through the QR and the last AR in more detail, I really believe this is going to be a transitional year for IGO.

Looking at a couple of the other nickel miners at the weekend (PAN and MCR) I am really not impressed, most of the trumpetted profit from both is from eating hedging. These have nearly been fully eaten, and without them Lanfranchi and Mincors Sth Kambalda operations both look about breakeven to me (once allowance is made for sustaining capex etc). Or simply be prorata allocation of non cash costs to them.

The Long operation looks to me to be truly standalone sustaining at a little over $5/lb payable, vs $8.97 rev YTD. That means over 40% at the PBT level, and over 50% at the EBITDA level.

Just can't wait until Tropicana has been given the green light, and we are producing from Moran AND exploring beyond it.

This must be the most unhyped mining company on the ASX. Closing mc only covers the cash and Long imho.

EL