query for the mgx analysts...

Hi there,

I'm a shareholder in both AGO and MGX and was recently looking at how the two companies resources were valued by the market. I was a little perplexed by how much more the market seems to value the resources of MGX compared to AGO and was wondering if somebody out there might be able to explain the discrepancy to me.

AGO has measured, indicated and inferred DSO resources of 187 mt at above 56.5% Fe. Atlas also has the Ridley magnetite deposit, which may or may not be a great resource (remains to be seen). Lets ignore the magnetite for the purposes of this discussion. AGO has a market cap of about $839 million.

MGX has total measured, indicated and inferred resources of 104.7 mt at above 50% Fe. MGX has a market cap of about $1.67 billion.

If we look at how the market is valuing the resources in ground on a $/t basis, we find that AGO comes in at $4.49 and MGX comes in at $15.95! And this is ignoring the fact that AGOs resources were cut off at 56.6% rather than the 50% used by MGX. It also ignores the Ridley magnetite.

Now, my reason for this post is to try and understand WHY this discrepancy exists. Is the fact that MGX is shipping ore from Koolan island a big drawcard because it doesn't have to truck/train ore to port?

Any thoughts would be greatly appreciated!