Veritas Securities analyst Piers Reynolds has revised his...

Veritas Securities analyst Piers Reynolds has revised his valuation to $4.15(prev $2.77) and sp target to $2.49(prev $1.66) following higher iron ore prices and a significant change to Buzzard's lump to fines ratio now established at 65.35%( prev assumed 35%). Despite WPG announcing Kestrel's 16 year projected minelife, excluding the other known deposits, Veritas currently has not included any value for magnetite, preferring to focus on the more immediate DSO production. He does however refer to a possible total WPG DSO resource of 100Mt if lower grade ore can be upgraded commercially by removal of silica.This would enable a production rate above that currently planned for late 2010 of 4.5mtpa of DSO.
He has also assumed 1mtpa sales through Darwin( until Port Bonython available) commencing 2H '09 at cash cost of A$90/t against WPG A$115/t. This leaves significant cash margin of A$25/t FOB. He summarises a comparative iron Producers/near term Producers schedule to show WPG has an EV A$/t of A$2.28 for hematite and only A$0.15 for magnetite............imo that's not just unloved, it rediculous especially as they do have a Chinese partner committed to equity/debt and offtake. Any other views ?I'm biased !