sleeping giant stirs, page-2

Have been holding this stock since the YML days ultimately accepting my fate and going through the WNI takeover. Have for years heard from management that a rail deal was close, so I take it with a grain of salt when an imminent deal is suggested. However, it does appear this is the first real activity for rail access to be played out in the public domain.

There is a bit to like about the Marillana deposit, the free dig nature means it's low cost mining compared to those that need to blast; the beneficiation process has higher recovery rates than first calculated; and the quality of the ore seems to be of standard sought after by steel mills. It is claimed by BCK that the cost of extraction and beneficiation is still lower than the mining costs of AGO and FMG, so still a reasonable profit margin per tonne even if ore price falls to $90 per tonne.

The level of share dilution before production is achieved will be interesting. It's pleasing that Luk, who orchestrated the WNI takeover and is now in charge of negotiating a rail deal, does not appear to be receiving options until a deal is finalised. Hopefully this is a sign that dilution is being kept to a minimum and that options are to reward outcomes achieved by the board members/employees.