BCI IOH

Valuation post IOH Takeover, page-16

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SuperWealthy

7,132 Posts.

846

19/09/14

14:09

Post #: 14000731
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Originally posted by doctornoh ↑

not sure you can go rushing into judgement on this deal right now when the IO price has dropped to 83USD, although the fall in the AUD is providing some relief.

Im also sure you need to consider the 15c dividend declared by BCI and the fact it is now trading ex. To what extent also is BCIs production issues relevant to where we are at?

Perhaps like you the market thinks BCI's future dividend is going to be severely limited by it spending billions on developing Iron Valley. But as we have noted on here, Baosteel, Posco, AMCI and Aurizon have all now firmly committed to the Anketel solution so getting Bucklands into development I would think can now been done on a capex lite mine development only solution to BCI. Lets not also forget the contiguous nature of the Bucklands deposit to the Aquila deposit and perhaps its even possible to share mine development costs with Baosteel. We shall see.

So im willing to collect my BCI 10c cash cheque, receive my BCI shares and wait for next years dividends and Iron Valley royalty and see where the market takes us. If I lose money then so be it.

Also Im glad if you made money from your trade/s.

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So... Now that we know Anketell is happening, and that it would likely offer a great opportunity for Bucklands to piggy-back onto the rail...

And we know that Iron Valley is already close to production if not already stockpiling...

Why is it necessary for IOH management to do this deal with BCI?

Surely we could have farmed out Bucklands (exactly as we did with Iron Valley) and then simply sat back & collected anything between $40 million - $100 million p/a in royalties depending on the iron ore price.

Am I being too simplistic? What am I missing?

BCI Price at posting: $2.00 Sentiment: Hold Disclosure: Not Held

IOH Price at posting: 96.5¢ Sentiment: Hold Disclosure: Held
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