Will junior IO producers ever get fair value?, page-35

thanks Eclectic_nish.

very much appreciated. Your experience of having lived through that last one is most helpful.
so the 1.5x applies to div payers like us. Good to know.
I’ve said from early on that LOM was important. Obviously if they found enough in the JV, then they could also look to increase output (= more cash), if/when IO price better. Although transport/port capacity would seem to limit that in our case.

when we were in the 40’s last month, our mkt cap was $200m. Which going by your 1.5x Max. was actually overvalued! We’re slaved to the IO price, so what’s your view on where it might go in these coming months? Good arguments can be made in both directions. China tend to win any fights of this kind, but ROW are strongly moving to prop up their economies with major infrastructure spend. That takes time, unfortunately, so I would expect it would be into next year before we saw much impact from that source. thankfully, our great board had the good sense to hedge 45%, which, as you say, gives us time.

we’ve seen the first project put on ice due to the IO price, with MGU shelving their DSO, which was due to start December. They’ve switched to now focus on their phases 2 & 3; beneficiated higher grade and HBI/Pig iron. Their SP got smashed. Interesting the market has liked their move to shelve the DSO and move onto the others.

IO has been volatile for a while. Both up and down. Some consolidation then move up would be nice.

unfortunately, I got carried away like a few others and ended up too heavy in IO. Another painful/expensive lesson. I moved more into Li, Au, Cu/Co etc, but from a nice 35% up overall, I’m now down 25%.
tough call to know where to from here, but FEX is the one IO that I’m comfortable with, as they have the hedge in place, CAP also probably ok, due to their low cost when they get into production. Their biggest hurdle will be funding if IO price stays muted, or goes lower. But for now, FEX is a hold for me.

cheers,

ned.