results out - look at last quarter, page-15

Real significance from todays announcement was the fact that the rail operator ( half owned by Westfarmers) is prepared to upgrade the railway line to Perenjori (and MGX asked them to do so).

The fact that MGX seeks to utilize rail and build a second storage facility, rather then utilize the slurry pipeline from Mt Gibson, I think, gives the first hint that the pipeline will not proceed. The $270 to $ 300 million funding required to built the pipeline may not be forthcoming in the short term.

Should the pipeline not proceed, in no way, is a reflection on the ability of management, rather a credit to them to have al least reached this stage. I hope I am wrong, but these are my views, which may in fact be shareprice bullish even in the short term, anyway.

Aside from the situation with the pipeline, the upgrade from the rail operator, is of huge signifiance for MGX. Effectively we had today a 50% profit upgrade from 2007, something which really can be achieved without the major capital raisings and associated doubt with the pipeline. Indeed Westfarmers and the other 50% equity partner of the rail line would have undertaken due diligence on MGX regarding their ability to utilize the upgraded rail route.

Given the pellet deal may not proceed, MGX will have, with those 22 cent Oct options, (and excluding any Shougang placements) some $100 million cash at the end of the year and a fully diluted cap of $280 million.

That 2004/5 profit figure was something real and different to what we have even seen from MGX in the past. Small time investors have taken these stock from 15 cents to mid sixities in less than a year, without any instituational support.

How can you say their PR is a problem.

I know where the problem is. J P Morgan/Barclays Global Investments/ING/AMP wake up. I made the same comment on another board when the stock was 20 cents and was proven to be 100 % correct. (No boys its not Tuesday todays...its Wednesday. These people need to get on a plane to Perth and do the job they are supposed to do).

Final word. Have a look at the GCL presentation yesterday with EBITA and PE forward guidance for all mid cap coal companies eg MCC/EXL/FLX/CEY. They do not rate (Felix big question mark) against MGX.

If you have supported this stock up until now and are disappointed, hang in there.