trafing halt, page-17

What's it worth:

- Using the US cents per dry metric tonne unit (USc/dmtu) for the FOB calculation
- Assume 200c for fines (noting the grade is below 62%)
- Using 106Mt of 'inferred' resource (remember this is not transferable to ore reserves without further infill drilling and met test work), let's assume 90Mt gets mined as reserves (conservative).
- Fe content = 58.6%
- 2% royalty.

90m x 200c x 58.6 = $10.5bn
2% royalty = $211m in future value (around $2/tonne in ground presently).

Christrading mentioned 2Mtpa production so let's use that; now the NPV on $32m today and the 2Mtpa for 45 years starting 2013 and discounted to 9% produces an NPV of $72.3m.

So the deal in NPV terms for 2Mtpa production at an iron price of US$124 FOB with a 2% royalty is worth $72.3m or 44cps.

Plus IOH has just sold the production risk (which is challenging in the current environment) and minimised the impact of iron ore price fluctuations on their bottom line. Smart.

So, 44cps for the satellite. What about the rest of the company! LT Buy.