we have a buy

http://www.theaustralian.news.com.au/story/0,25197,24013400-5005200,00.html

Gindalbie Metals (GBG)

Southern Cross Equities. Buy recommendation . 12-month share price target of $2.35 . Last traded at $1.17

GINDALBIE is an emerging mid-cap iron ore producer, well placed to benefit from the new prices being secured by the big miners. Its Karara project in the Mid West region of WA is capable of generating substantial production and earnings for Gindalbie. In the first year of full production, likely to be in 2012, Southern Cross Equities estimates NPAT of more than $600 million on rising iron ore prices. The magnetite project should be a major contributor to earnings. "Management has a vision, which is founded in the size of the Karara resource, of attaining a production rate of more than 30 million tonnes per annum once a new port and infrastructure are in place," Southern Cross Equities told its clients. Driven by the new pricing paradigm in iron ore, as encapsulated in the appended Metalytics' analysis and forecasts, the economics of the Karara Project are extremely robust. "However, in the new world that brings higher prices, there are also enhanced risks in the areas of capital and operating costs, offtake over the long term and infrastructure competition," Southern Cross said as a risk warning. It said one of the greatest risks in magnetite concentration is the cost of energy, relating to the need for fine grinding. Mitigating this energy risk is a 15-year supply contract already signed with Verve Energy for enough power to support 12 million tonnes of concentrate a year.