and for my two bobs worth..straight out of the report:
Investment Highlights
• Cheap but execution required. Assuming YML executes a 2mtpa trucking (CY10) - 5mtpa rail operation (CY11) we derive a valuation of A$1.81/sh
(DCF10%). We consider a discount is appropriate given uncertainty over infrastructure however, on peer comparison YML looks cheap (EV:Resources A$1.92/t in-situ versus a sector average of A$13.25/t).
• Maiden resource exceeds expectation. YML released a maiden 44mt resource at its 100% owned Marillana Iron Ore Project (MIOP) located 100km NW of Newman, WA. This number comfortably exceeded management’s 30mt estimate and is classified 100% Indicated under JORC.
• Positive start; now looking for critical mass. YML is reliant on securing third party rail access and we estimate circa 70mt of mineable resources is
required to justify the construction of a dedicated spur line. YML has set a resource target of 100mt with drilling to recommence in November.
• Strategy aimed at production. Incoming MD Wayne Richards has been the catalyst in aligning YML with a potential development. Richards is a career miner and a transition to mining is the stated strategy. To this end,
metallurgical, environmental, project evaluation and logistics studies are progressing with a scoping study underway, targeting 1Q CY08 completion.
• Infrastructure options. YML is fortunate in having several potentially feasible infrastructure options at hand. BHPB’s Newman rail line traverses the tenement 4km north of Marillana, FMG’s open access Cloud Break line is 35km to the north, and RIO’s Yandicoogina Line is 40km to the south.
• Striking a deal the key. Uncertainty over a transport solution has translated to a considerable market discount on peer comparison. While we
consider a discount is appropriate, we expect third party negotiations to accelerate into CY08, with any emerging clarity to underpin a re-rating.
you have all probably read this but for those who havn't here it is
I'm expecting all IO stocks to appreciate when the big three announce their increases in IO prices
Only mortage rates in Chicago will undermine this rise derrr
YML
unknown
