Does this mean they were a far better investment at $7 when...

Does this mean they were a far better investment at $7 when their market cap was double their debt?

If you read their most recent investor presentation they indicate all in costs are $54/t but they expect to reduce C1 from 32 to under 30. Let us assume 29. This will change the total cost excluding tax to $51/t for FY15.

If the price is $75/t with exchange rate at $0.88aud vs usd and they only get 85% of the index price then FMG will make about 2300mil NPAT this year. ($0.76/share). Lets include debt (net) as share capital. It is $2.41 of debt per share. $0.76/share in earnings for a share price of $5.36 including debt. That is a price earnings ratio of under 7.5 if you include debt which is a rather conservative assumption. I'd say the iron ore price fall is factored in and then some.

As for comparing FMG with the other minors, the break even price of $51/ton/0.85 (grade discount) = $60/ton. This break even price will fall with time as debt falls (reducing interest repayments). This means FMG has a better buffer against price falls than companies like atlas ect.

The one company that is in my opinion very close to better off than FMG is MGX. The thing is it is as good for different reasons. MGX currently sells near the price of cash at bank. This means you get ownership of $1 in cash for every $1 invested. Further to this, they throw in a few mines for free. Granted the mines are near worthless..