starting to buy, page-4

yep spot on gs.

I hold both albeit in very small amounts.

I consider this a bottoming out consolidation

you can see the stocks gone down on a downtrend and now its stopped for a fe sessions where its hanging round the bottom. This is a pre-cursor to a resunption of an up-phase , or up a little and then side-ways.

If it holds in this range for a cple more sessions, id say therell be bias to the upside rather than downside , as its alreadt retreated back by quite a bit.

In a few weeks we'll know the outcome of the iron ore price for 2008! This should get things moving again, if the fixed price is above expectations!

In any case, i feel comfortsble holding this for the next 2-3 years, as IO price is tipped to go up again in 2009 and I dont see it coming back below 100USD for a few years until another BIG producer adds a MATERIAL amount of iron ore into the market. BHP/RIO/CVRD pretty much control the supply. So they can keep the price up if they want as long as demand from china is robust.

Work out the potential EPS scenarios with different prices, and even add another 50mill+ or so in shares to the equity. Youll find that EPS is remarkably high when itll be a producer!

Being a rather small hematite play, the CAPEX required wont be much at all, so there wont be a HUGE amount of future dilution.

At 3 million tonnes a year @ 100 USD, costs of say $45/tonne and currently 85mill shares + options :

100 usd revenue per tonne * 1.13 = 113AUD

113AUD revenue - 45 AUD cost = $68/tonne revenue

$68 * 3million tonnes = 204mill

tax 30% : 143mill net profit

143mill profit on 85 mill shares + options gives an EPS of $1.68/share !

OK, lets assum an extra 60ill shares for CAPEX etc

143mill/145mill = about $1.00 per share!

I may have made a mistake???

The future EPS cant seriuosly be that high???

Ive added an extra 60mill to capital

are there any shares escrowed????

are my costs assumptions correct at circa $45/tonne???

FRS is about 45AUD per tonne; wpg is 55AUD per tonne (but WPG has big logisitcs costs)

If I assume a LONG-TERM IO price of 70USD:

thats 80AUD revenue - 45AUD costs = 35AUD/tonne profit

35 * 3mill tonnes = 105mill

105mill/145mill shares + options (ive diluted an extra 60mill though!)

EPS = 72.5cents per share!

these figures are too good!

Its because we're working off only 85mill shares + options currently!

the market cap is too small atm!

the amount of shares + options is very small which heps a lot and allows for high EPS even if we DOUBLE the equity (shares+options)!

thats why I LOVE this stock

plse someone tell me the figures are correct

again, any escrowed I shld know about??

are costs circa 45AUD???

I think its all correct.

If so, this stock could be $10 one day with a PE of 10!

Its the best VALUE long term play out there according to these figures!