i think you should use the BHP/UMC deal as a guide as well as...

i think you should use the BHP/UMC deal as a guide as well as the Polaris takeover going through now.

there are a whole lot of other companies that have done deals with chinese for the projects, some in SA, some in WA.

at the end of the day, its all about how the company is marketed to potential investors. my feeling is that the guys running the show should have used the current guys (ie the AQA deal makers) a long time ago.

the fact that they are happy to sit back and let a fund manager unload into the market is what gets up my nose. that escrow stock should have already found a home before it came out of escrow. the fact it didnt shows that these guys know nothing about how a market works.

so going back to what its worth, i would say $2-$3 per tonne is closer to the mark. on that basis the resource should be worth around $360m +/- a few mil. but if they can get finance then you can value it on NPV, that should bring the value of it upto around $2b - $2.5b depending on the assumptions used. So if they end up selling 50% of Balla Balla to a project partner the company should be worth $1b tops. assume a 40% disount to NPV and you get a market cap around the $600m level, or $3 per share (assuming 200m shares on issue). I would assume they will sell some AXO script in any deal they do, assume another 200m shares, then the value of the 400m AXO on issue would be $1.50.

the key to any deal they do will be how much equity in AXO they give up and how much of balla balla they sell.

everyone knows the NPV figure is rubbery especially if they expand the resource base etc. so if they really do have 1bt of fe, then the NPV is probably closer to $4b-$5b.

again, the key is the finance, without it the share is only worth what someone will pay for it and currently thats $0.27.

if the share price was supported by fund managers then the equity they issue would result in less dilution. thats where theres guys are lacking, they dont have that market savey like Andrew Forrest, Tony Sage or Clive Palmer. if they did this would be a $5 stock already and be producing.