what is this project worth?

I reckon it will add about 30c to eps for 2005. With a pe of 10 that would make this company worth between $5-6 if Gina throws her lot in with them.


Hancock takes Hope Downs option
By Jamie Freed
June 17, 2005

Gina Rinehart's Hancock Prospecting said it would exercise a $231 million option to buy out Kumba Resources' half of the $2.2 billion Hope Downs iron ore project yesterday, but did not announce a replacement partner.

Payment is due on July 1, leaving the West Australian mining heiress with two options. The first is that Mrs Rinehart could dip into or borrow against iron ore royalty payments she inherited from her late father, Lang Hancock, and prolong negotiations as long as she wishes.

Otherwise, Hancock could name a replacement partner that would make the payment to Kumba within the next two weeks.

Analysts said the second option was more likely, as Hancock must submit a formal project development plan to the WA Government by June 30 and it was keen to line up financing for the 30 million tonne-a-year project.

Hancock bought the option over the 49 per cent stake in the Pilbara project from South Africa's Kumba in April after a protracted legal battle. Mining giant Anglo American bought a controlling stake of Kumba in late 2003, which Hancock argued changed the circumstances of the original partnership. Kumba had been keen to hang onto its portion of Hope Downs to grow its iron ore business, but an out-of-court settlement gave Hancock the option to buy it out.
On Tuesday, Perth's Consolidated Minerals confirmed it was in discussions with Hancock but said no agreement had been reached. It is believed that Mitsubishi held talks with Hancock over the weekend.

In a statement last night, Mrs Rinehart said Hancock would not comment about any of the talks, but reiterated it was keen to find a partner to help develop the project as soon as possible.

"The cost of establishing this major project is substantial and those who participate will have to be able to make substantial contributions," Mrs Rinehart said.

It was unknown, however, if Hancock would allow a partner to take a controlling interest in the project, which might prove a stumbling block in its negotiations.