Well, having been soundly castigated by an ex-BHP geo, I can now confirm my opinion of the FMS iron mineralisation as being...challenging...to market. The +4% Aluminium and the +7% Silica contents will be a real problem for them.
Also, unlike every other CID in the Hamersley, they don't appear to have distinguished between the Upper CID (Oakover Fm) and the Lower CID (some other formation). There is usually a clay band in between. So, I wonder if their BID is in fact the lower CID, and they are just calling it BID because it's so chock full of silica it probably looks like BID's.
Basically, this would be the only CID which sits above a bedded iron deposit. And this is coming from comparison with well researched CSIRO work into the CIDs. So, when you have problems with interpretations, one tends to favor the consensus view which is that BID doesn't sit under CIDs.
Anyway, thats besides the point. These CIDs can be hard to work with - you tend to just get slop out of the holes unless its good goethite or cruddy siliceous gothites.
Its hard to see how FMS will pull off a good upgrade with a desand plant. They will also likely need to drill and blast the BID/silica CID so you can kiss goodbye the Wirtgens which FMG uses just across the way.
The subset resource of 126Mt at the higher grade is closer to viable. However, even that isn't a corker. have a look at the 300Mt FMG found the other week at Solomon; silica and aluminium are both lower than FMS. Twigster probably wasn't stupid in letting the FMS ground go.
Financially, FMS is sweet, with heaps of dosh to throw around. Drilling is getting cheaper by the month, so their cash burn should be manageable even if they chomp through more in the cooler months.
The only danger might be if Big Kev decides FMS ought to bail out the MXR Failboat. Though, at least FMS has some of the financial muscle to do something with the Canegrass stuff. Not that it's worth a huge amount. Nor does the shipwreck of the SS Maximus give one much confidence about the skippering abilities of the portly sailor at the helm of SS Flinders Mines either...
FMS Price at posting:
6.5¢ Sentiment: Hold Disclosure: Not Held
