Put a graph of the IO price alongside a graph of the MGX price,...

Put a graph of the IO price alongside a graph of the MGX price, and you have a large piece of the answer. However, in my view, MGX was considerably undervalued before the IO price action at the beginning of the year. The price probably go to about "fair" at the peak, and is back to looking cheap again. Recent director buying seems to concur with that sentiment.

Here's a quick and dirty attempt at a cashflow forecast:

		Y1	Y2	Y3	Y4	Y5	Y6
1	Volume Sold	2,1	2,6	4,6	5,5	5,3	1,2
2	Cash Cost	76	68	41	34	28	17
3	Ore Price (62% FE, USD)	100	60	55	55	55	55
4	HG Premium	10,00%	15,00%	15,00%	15,00%	15,00%	15,00%
5	AUD/USD	0,69	0,68	0,69	0,7	0,71	0,72
6	Cashflow	$175 182 609	$87 023 529	$233 066 667	$309 964 286	$323 747 887	$85 016 667

The volumes sold and cash cost figures come from MGX's presentations. I've assumed that the IO price will be back to something quite ordinary next year, and will be only $55/ton in years to come, and that the AUD has only another cent or two to fall before 1c/yr recoveries. I'm assuming a 10% premium for high-grade ore this year, as we've seen the premium come under some pressure with the extremely high prices, but recovering to 15% in future years.

These are all inarguably conservative assumptions. And yet, that makes total cash generation in excess of $1 per share over the next 5 years. Add to that the $0.31 per share in current liquid assets.

If you apply a 10% discount rate to this, you get an NPV figure of $1.10, including the cash pile. So today's price is cheap. And there is upside: it doesn't take a stretch to imagine higher IO prices or HG premium, extension of the ore body, or the deployment of the warchest on something which earns more than the 2% interest they are presumably getting on it at present.

My short answer to your question is probably this: who cares why it rose and why it fell? Other than being a one-mine gig (a fair concern), the company is as sound as could be reasonably hoped, and the price is depressed relative to future earnings. I sold about 20% of mine a few months back when it crested $1.25, in the interests of rebalancing, but I will be holding the rest for the foreseeable future.