FEX (ASX) What should FEX do with all their cash

Originally posted by HairyRichard: ↑

I've been away for a while on this one but back in today
Now I might be working on old information here, but IMO for FEX to do 10 bags they need a new project, not a small expansion of this one. It can still be iron ore, but the AISC needs to be much lower, or the mining rate needs to go from 1.2mt up to 5mt. From memory only, FEX is working with an AISC of around $80/t (someone please correct me).
When costs are running that high it doesn't leave much room for when iron prices decline, and that's a turn off.

Check out E25, who are doing a DSO manganese project in WA and only looking to turn a profit of around $30m per annum. That's ramping up to $120m per annum, which is still lower than FEX's, yet they're DOUBLE FEX's market cap because they're working on another project PFS which should have high margins.

Anyway, getting a little off topic. My point is that I don't think more high opex iron mining is the answer, even though it's extremely profitable right now.

FEX should be sitting on somewhere around $60-70m cash right now. Can someone confirm that?

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Hey Hairy,
Good to see you over here from the CKA thread. If CKA could start production like FEX has then happy days. I wish. There is definitely some upside for FEX on the corporate side. There is plenty of smoke on this front. Here are my observations.
Most likely organisation to partner with is Sinosteel Midwest Corporation. Key drivers of a deal
SMC are basically a trading company and all attempts in West Oz to bring their assets into production have been a failure. They are shite operators
Despite acquiring the Mitsubishi iron ore projects at Jack Hills and having the Blue Hills project just behind Karara they sold their strategic export facilities at the GPA to FEX. This flags they have no intension to export small quantities in their own right and their end game is the Oakajee Port and Rail project they acquired off Mitsubishi for $A1
FEX have proven they are good small scale operators in the region and have some capacity left at GPA. 1-2 Panamax vessels a month depending on congestion.
Brierly has performance share hurdles relating to production increase (achievable with Iron Ridge) and resource growth (not achievable with Iron Ridge)
Maltman has a performance share hurdle of 45c probably likely as a result of a deal.
General Meeting of the company delayed 5 months. Is this to give some time to consummate a deal without holding an extra EGM?

So a deal to exploit the smaller resources of Jack Hills and or Blue Hills might be on the cards as the operator of some commercial earn in. I doubt whether FEX would be interested in the SMC bigger picture as this is many billions of dollars.

The SMC deal is ready to go(Jack Hills is an easy restart not so Blue Hills) if not start giving back some of the cash pile as dividends so I can decide where I can get my best returns. We have around $A65M in the bank atm and building this post tax at $A2.5M per week on average.