re: starting to wake up, page-13

re: starting to wake up I guess MGX has been sold down just like every other resource stock on the market, hopefully when this is over quality stocks will bounce back quickly and I hope MGX is one of them.

For me nothing has changed, in fact 19% is above expectations - Shaw allowed for a 10% increase. However there were some concerns expressed about the last quarterly by Paul which seem justified, to be honest I don't know enough about mine engineering to comment. Hopefully this lower grade ore is short term. Suffice to say Chinese continued to accumulate after the quarterly (as can be seen in change of shareholding announcements the last month).

MGX in last quarterly advised that they agreed to extend magnetite project decision till end of May. Why? I don't know but I suspect partly because outcome of iron ore negotiations was still unclear which affects their calculations / whether or not to proceed. Given how fraught these negotiations have become, and steelmakers are screaming at the next hike, I think it is more likely than before, but I really don't know.

The other decision pending is whether to go ahead with a pellet plant which is lower risk and less capital intensive. This decision is independent of the Shougang decision on magnetite though one would complement the other.

I still hold because I think one or both these projects will go ahead, and they are not priced into the stock at the moment, it seems good value just based on its existing haematite operations. These other projects are the blue sky for the stock if such a thing is possible in this market.

The Chinese steelmakers will be more keen than ever to break the monopoly of BHP/RIO/CVRD given they will need to agree to higher prices than they intended. Makes MGX a good strategic hold too. (I hope.)

But if Paul100 or others who understand mining better can explain the last quarterly better that would be great.