Surely AGO is also the most likely takeover target in the...

Surely AGO is also the most likely takeover target in the Australian resource sector. With BHP, RIO, FMG all competing to consolidate their position in the Pilbara, the Chinese incresingly being frozen out and the other major international miners without a significant presence, AGO presents a key strategic target.
- current Market Cap around $600 million
- projected production of 6 million tonnes in 2010,rising to 12 mt in 2012 and 20mt in 5-7 years (GEO prediction)
- operating cost at PArdoo around $40/t and current spot price around $85/t. (I believe Pardoo production is fully sold for 3 years; not sure of price - but guess around $60)
-based on current spot price if 12 million tonnes in 2012 is correct and assuming about 3 million tonnes from Pardoo is committed at $60/t; indicates an operating profit ver $400 million
- no debt as a result of fund rasing this year
- larger land holding then BHP in Pilbara as noted above and enormous exploration potential

My guess is that BHP will lead the charge with a relatively low takeover offer not becuase they expect to get it on the cheap, but to flush out other bidders. In any bidding war BHP becuase of its current low debt is at a significant advantage. Good possibility then of the Chinese forming a strategic alliance with Fortescue to bid and possibly others coming in as the last possiblity to get a strategic position in the Pilbara.