C'mon guys.. what are we debating here… lets look at the actual...

C'mon guys.. what are we debating here… lets look at the actual result first..

Revenue up 27% to $69m up from $54m.
Iron ore shipments of 1,111kt v 928kt pcp.
Average selling price increased 35% to A$62/t
NPAT was $27m this was boosted by a one off of $18.7m.
Pre tax profit was $13m down from $20m.
NPAT $9m down from $22m.
$9m was well below guidance given during the 2H06.

A major item was the group's aggressive amortisation of waste over the period with $32.5m charged against profit the result compared to only $7.5mt the previous period.
$11.1m of additional waste was capitalised. Close to 1.4mt of iron ore was mined during the period thus MGX now has significant inventory (750kt in stockpiles) with trade and other receivables up to $28m (was $6m) and inventory up to $21m (was $6m). Hence a lot of profit and cash sitting in the system. Some of which should flow out into the 2H. However shipping more than 1.4mt is currently a big challenge and another 30 rail wagons are needed to get to 1.5mpt per half rate.

Average cost of sales fell 9% to $42/t.

Balance Sheet: $67m debt and $53m in cash. Balance Sheet robust given Koolan Island almost complete.

Koolan still first shipping June.
Expect reserve and resource upgrade?? march ¼.
Extension hill being used as a test case by mgx/chinese to defeat enviro concerns for whole of Midwest. Best case start up still May 08.

Iron Ore prices.. don’t expect them to drop far from here any time soon.

Finally a note from one analyst/broker:

“Current weakness could be a result of company aggressively increasing mining rate but not getting product through system and hence low result.
No change to recommendation. Comment - The lower it goes the better buy MGC becomes and certainly if management does not increase PR then corporate rationalisation would appear the most logical way of share holders realising value.”

My take: this is not accidental.

And spidey.. you are spot on I was wrong to think they’d hold 80c. But whatever the games being played by management, the chinese and the Russians.. this thing WILL GO!. I still hold and I will get more than one bid when it happens.
My bet is that someone will initiate the auction on or before the first shipment from Koolan which not only appears set as timetabled but now appears to be of higher grade and greater reserves than perhaps prev. thought.

While some insto’s have been put off holding by the presence of the chinese.. do you really think once the first bid comes.. they wont buy???

My opinion only DYOR.