We recently met with this company's Chairman and Chief Executive, giving us the opportunity to get even closer to one of our favourite mining companies.
Today the company is an iron ore producer in the Northern Territory, with production continuing to exceed budgeted levels.
Tomorrow, the board is actively looking to diversify the company's production and earnings base away from purely iron ore to become a fully diversified carbon steel and other commodity company. They already have made investments in other smaller companies.
Although the directors naturally weren't giving anything away, it seems the company will soon be looking to acquire smaller, undervalued emerging producers. Giving us a great deal of confidence in this strategy is the Chairman's experience with a similar business model whilst at the helm of another mid-range diversified miner.
In our most recent BUY report to Fat Prophets Members, we said …
"…(the company) has current production that allows it to take full advantage of the window of opportunity in iron ore that presents itself right now, and secondly, it is looking to build other income streams to reduce its exposure to iron ore alone. This is visionary stuff and what company building is all about."
We concluded by saying the company "…continues to represent what we consider to be an outstanding resource play…we recommend the stock as a Buy around $1.19*."
The good news for potential buyers of this very promising company is that today the shares trade back around the $1.02* level, down 14%* on our most recent buy price and down a whopping 41%* from its all time high reached as recently as November 2007.
Are you a fox or rabbit?
TTY Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
