what price.., page-8

Comparing market caps is an option but when houses in your neighbourhood go on the market it’s a fair indicator of what your house is also worth. In this regard a good indicator could be the proposed/agreed BHP purchase of UMC.

Whilst I'm not 100% familiar with the deal and I’m sure there are heaps of different scenarios involved the basics are that BHP is paying $204 million for UMC's Pilbra tenement. The main asset from what I can see is BHP picks up 158mt of iron ore at 58% fe that is right at their door step.

FMS has +500mt of fe but my personal value for this stock has always been determined on the quality stuff – the part most likely to (1) attract interest from a project acquisition view point from the likes of BHP/RIO/FMG and (2) sell to the market ourselves should we get that far? At present FMS officially has 131mt at 58%+ fe. thanks to Delta

Here are approximates below for information, comment and ridicule.

BHP/UMC Deal = $204 million for 151mt = approx $1.32 million per tone

FMS - $1.32 x 131mt of 58% fe = approx $173 million for current 58% fe resource.

Given we had $15million in the bank and now $52million from the capital raising that provides $67 million cash and values the company at $240 million.

With the capital raising FMS now have approx 1,800 billion shares on offer.

$240million / 1,800 billion shares gives a market cap of = $0.13 per share.

There is another 400mt of iron ore at 54% fe in our resource already that is probably very undervalued given blending techniques/possabilities. The big positive for FMS is also the additional quality fe that is being found and soon to be reported.

We also have all the other assets that don’t seem to be included or reflected in this scenario. Each million tone of fe above 58% could add $1.32million to the value of the company and therefore share price.

My conclusion = very undervalued company, significant upside, excellent news to come, big future.