takeover talk, page-4

BB,

Wow! Those are old posts you dug up. Are you a stenographer?

The comment below looks to be the most interesting. Showman has a lifetime's experience in the IO industry.

Showman:

"BB.... my honest opinion?

Do the deal with BHP... but not without a nonbinding MOU with FMG. when....soon as a Jorc of 100mt+ of hign grade DSO is announced.

Can't say more than that.... I have been harping on about it for some time.....

All IMO and DYOR.

Chers, Tony."


One thing has changed since that was written-
Why do a deal now, when you have other high potential targets at Jumbo and Yandi?

The attraction to FMG is this:

1. Will building a spur to UMC (100km) lead to a more economical ramp-up of operations than building the Kennedy spur to their Serenity deposit (200km)? I think the size of the resource would need to be large to make FMG change its plans.

2. Notice Tony mentions both an MOU with FMG, and a deal with BHP. I said in another post yesterday, that BHP will not like FMG encroaching on their patch. Especially not with a multi-user access rail line.

Here's how things could play out:
(a) FMG don't build the 200km kennedy spur. Remember that FMG's deposits in that area are close to the existing RIO line.
(b) FMG do build a multi-user line into the heart of the Pilbara.
(c) FMG show clearly that a rail line from the Pilbara to Port Hedland can be multi-user. This shows BHP's and RIO's arguments to be a farce, and that they monopolising assets.
(d) FMG put their Serenity ore on RIO's rail line, and save having to build their own line to the deposit.

Who knows, i've put 1+1+1+1 together here, and ended up with 99 as an answer.

It seems logical though. It always has - but it really depends on the final size of the deposit. The bigger the better.

Another logical approach, is that UMC's deposits are useful to BHP as blending ore in their up-coming Pilbara Mega Hub. (see presentations on bhp website).

Even with no takeover - 2 million tonnes per year, by truck, to Port Hedland = $aheckofalotofdollars.

MMX already truck a bigger distance to Geraldton. For this reason, I can't see too much political problem in UMC trucking too. After all - why would the state government have built a sealed highway going to Port Hedland? They could have made it go to Broome if it was just meant as a tourist drive.

Food for thought!!!!!!!!!!!!!!
anyone for duck?

Joel