screaming buy, page-8

Doc, all fair points.

To be clear, I didn't mean to suggest that management were somehow lining their own pockets with the $20 Mill p/a operating costs. I still think the management team is excellent.

I was merely pointing out that if in fact the royalty component from this deal turns out to be worth only around $20 Mill p/a it barely covers our operating costs and therefore probably adds limited value to IOH in terms of share price. It's not exactly a reason to rush in and buy the stock & I think we've seen evidence of that today.

It does give us a platform to add free cash-flow (i.e. genuine profit) from future deals (e.g. Bungaroo/Maitland) but one of our three pillars is effectively gone and we would want the next two to generate much more value than $20 Mill p/a or we are really up the creek.

Anyway, I should hold fire on this issue until we get a bit more clarity around the royalty because I'm really speculating here and hopefully $20 Mill p/a is indeed a worst-case scenario and the real number is up around $50-$60 Mill with a decent mine life.