But there is no shortage of large magnetite deposits in Australia or around the world. News of new deposits won't result in as spectacular a reaction as would a massive new DSO deposit.
The capex and having offtake agreements to take all your production is where some of these new deposits will struggle to get past the dream stage. They will be at the mercy of the Chinese buyers who recognise that there is no shortage and that they are the main game in town as far as buyers go. The more deposits, the less the Chinese will pay for concentrate and the less generous in JV's.
The price of IO remains the critical component to ALL magnetite miners! "If" there is a general "oversupply", then obviously the IO prices will adjust accordingly and it can get to a point where GBG is still forced to supply Ansteel by way of the offtake agreements but at an uneconomical price. If that situation lasts for a length of time, then even GBG's bright future will obviously be impacted.
GBG Price at posting:
$1.12 Sentiment: None Disclosure: Held
