ICU - Investor Centre

[Fool]

Re: FWL - Ferrowest Limited

I think the trading this week has already factored the ann into the price. The share price was still dropping yesterday even when people knew the ann was definitely coming out today (if we believed the MD). But the ann may be better than what was expected. Still should be careful here.

But do you think the trading has already factored the 1.5x expected resource ?

Everyone expected 75Mt and they've thrown 112.5Mt at us.

It's gone up and dropped back, it was sold down yesterday ON VERY LOW volume, we're talking like 90,000$ on the options and probably $140,000 ish on the heads.

Yesterday was people thinking the announcement was not coming and selling because they were scared.

Today you -should- see the more cautious investors moving in because the resource is now announced, and they'll move in and hold.

I really can't see FWL going down today, especially with the PFS due in July and profit takers wanting to wait until Monday to sell because of the financial year.

 

[UPKA]

Re: FWL - Ferrowest Limited

I dont think there will be a significant jump today, bt metal price is up overnite, so we will see it getting pushed a bit higher. wat this baby need is a bit of publicity, a short feature in the Financial Reviews would be excellent

 

[UPKA]

Re: FWL - Ferrowest Limited

doesnt look too bright today, the volume was low, so was the buying interests. looks like the market is expecting alot better result than this....

 

[Ruprect]

Re: FWL - Ferrowest Limited

A lot better result? the company was targetting 75mt, they came in with 112.5mt. I dont think the market could have expected as good as that!

No, such low volume today so far, only 291k turned over in first 40mins, i dont think theres a whole lot we can read into that. Give it a little bit of time.

 

[INORE]

Re: FWL - Ferrowest Limited

“We have been in operation for only 11 months and started the Yalgoo Iron Project with no resources and no drilling of our own. Our target for this first Resource Estimate had been 75 million tonnes and so we are very pleased with the actual result. Securing sufficient resources to underpin the Yalgoo Iron Project’s requirements for a 20+ year operation is a key building block in the Project’s development.
In fact, with a further two thirds of the deposit yet to be drilled, the total resource potential is no longer an issue for us. We will continue to explore the deposit into the future but with an aim now of identifying the most economic sections of the deposit.” Ferrowest Managing Director,

Sounds like the feas study will be positive as they are saying they have got the resources for project development. As a holder...i'm very pleased with this announce. Perhaps what we are seeing now is a few people jumping who expected a huge spike in SP, once these speculators jump ship we should see the SP go forward at a steady pace.


yeah and price falls as i type... can someone tell me its jus cos its the end of the fin year....

 

[YOUNG_TRADER]

Re: FWL - Ferrowest Limited

Like I said guys, the mkts reaction to the JORC will tell us alot, looks like it may weaken, but it may not, I see next support around 55c

The PFS is the next major ann which we can expect in 2-3weeks

Given I was expecting a JORC of 75Mt and this JORC is 112.5Mt ie = 50% More than expected, = Instead of 30yr Mine Life it may be 45yrs (50% More)

But I'll wait for the PFS

 

[Fool]

Re: FWL - Ferrowest Limited

I beleive we are seeing people who bought at 90c realising a LOSS for this financial year, only to buy straight back in and wait for next years profits.

We may also be seeing fund managers selling to take profits to make their end of year books look "good".

Either way I still anticipate a buy back in the afternoon as people re-enter for the July PFS and further resource upgrades.

Not a big deal IMO, hold tight and wait for the next run.

 

[prawn_86]

Re: FWL - Ferrowest Limited

looks like its either a june30 sell off or that this ann had already been factored in and any people who have only just noticed it dont wanna jump on cause of how much its run lately.

im happy to see it range here for a while then kick up again in july. well thats the plan anyway

 

[Pat]

Re: FWL - Ferrowest Limited

Like I said guys, the mkts reaction to the JORC will tell us alot, looks like it may weaken, but it may not, I see next support around 55c

The PFS is the next major ann which we can expect in 2-3weeks

Given I was expecting a JORC of 75Mt and this JORC is 112.5Mt ie = 50% More than expected, = Instead of 30yr Mine Life it may be 45yrs (50% More)

But I'll wait for the PFS

Agree YT, The market aint to intrested in the JORC upgrade, we want the PFS! Some more sideways action to come.

 

[danewbee]

Re: FWL - Ferrowest Limited

Like I said guys, the mkts reaction to the JORC will tell us alot, looks like it may weaken, but it may not, I see next support around 55c

The PFS is the next major ann which we can expect in 2-3weeks

Given I was expecting a JORC of 75Mt and this JORC is 112.5Mt ie = 50% More than expected, = Instead of 30yr Mine Life it may be 45yrs (50% More)

But I'll wait for the PFS

25.3% Fe grade? Even considered as poor grade in China. By Australian standard, it is waste, not ore. Try to upgrade it into 65%, you need at least 3t of ore to get 1t of sellable products. The mining and processing cost will be huge.

The BFS will be looks very "attactive", and very "profitable". Cannot wait to see it.

Cannot fancy the profitability.

 

[Ruprect]

Re: FWL - Ferrowest Limited

Danewbee, Its Magnetite, which will be converted using new technologies to a value added product, merchant pig iron.

Merchant Pig Iron can be a very high margin product.

Please, if you dont understand, dont post.

And i might note, 7 posts from you so far, and not one positive comment.

 

[TheAbyss]

Re: FWL - Ferrowest Limited

Block his IP host would suffice i think.

Blissful ignorance, mindless down ramping and a touch of jealousy. What a mix.

Perhaps the commentary could be moved to the jokes and funnies section?

 

[TheAbyss]

Re: FWL - Ferrowest Limited

Danewbee - I suggest you have a look at the following documents and they will explain why a low fe% is satisfactory for the project at hand.

http://www.ferrowest.com.au/Announcements/2007/ASX Announcement - Assays Phase 1 - 23Mar07.pdf

http://www.ferrowest.com.au/Announcements/2006/ASX Announcement Pre-AGM Pres.pdf

I would also recommend you have a listen to the following article for a verbal explanation.

http://www.brr.com.au/event/FWL/2049/23464/wmp/dqcqsbzpv5

Do yourself a favour and take a look, have a listen then come back with any questions you may have and we can all be on the same page.

 

[danewbee]

Re: FWL - Ferrowest Limited

But your the one whose posting random posts, you question the grade without understanding what the company is doing.

Is it that hard to read through this thread and get a proper understanding of whats going on?

If you post legitamate questions then I'll treat you legitametely if you just post random negative comments well then this is the treatment you get

Cannot ignore the fact that a 25.3%Fe grade iron ore company want to build pig iron plant, while most other companies with 30%+Fe magnetite will just upgrade the ore, and ship it to China. Why don't they do that?

FWL is assumed to make a lot of money from pig iron making, not on from exporting iorn ore (although the interim plan is to export), it virtually becomes an iron plant with upstream low grade feed stock.

To produce pig iron is total different business from mining. Talking about tough environment approval process, heavy investment, expose to energy price, available labour and labour cost, and pig iron market price, you should know what you have just invested.

I cannot see they can get $300m+ investment from any bank easily. The banks will ask the same question I asked here.

 

[kgee]

Re: FWL - Ferrowest Limited

Granted companies such as GGR send their ore to be proccessed overseas...thats not to say a pig iron plan isn't achievable here....its not out of the question at all their locality is a huge bonus,I'm not sure of the boards experince or resources but if ARH can secure investment from chinese for their project theres no reason why FWL can't ...great location and nearby infrastructure
ps I don't hold but may buy in on any weakness b4 pfs

 

[Pat]

Re: FWL - Ferrowest Limited

Cannot ignore the fact that a 25.3%Fe grade iron ore company want to build pig iron plant, while most other companies with 30%+Fe magnetite will just upgrade the ore, and ship it to China. Why don't they do that?

FWL is assumed to make a lot of money from pig iron making, not on from exporting iorn ore (although the interim plan is to export), it virtually becomes an iron plant with upstream low grade feed stock.

To produce pig iron is total different business from mining. Talking about tough environment approval process, heavy investment, expose to energy price, available labour and labour cost, and pig iron market price, you should know what you have just invested.

I cannot see they can get $300m+ investment from any bank easily. The banks will ask the same question I asked here.

LOL danewbee, your posts are less "broken", so to speak.... great improvement.
Perhaps you are correct.
Regardless, FWL went from 20 cents to 93 cents... Has the market gone mad
The money is made where the money is made. So lets make $$$.
I assume this is YT's only goal, it's certainly my only goal.
When it's time to sell it's time to sell...
So far FWL has made me good profits. What's to down ramp???

What is your goal danewbee? You must be short

 

[doctorj]

Re: FWL - Ferrowest Limited

Cannot ignore the fact that a 25.3%Fe grade iron ore company want to build pig iron plant, while most other companies with 30%+Fe magnetite will just upgrade the ore, and ship it to China. Why don't they do that?

Who knows why they don't do that - maybe they figure the tonnage is sufficient to warrant a plant and that the premium fetched by the processed iron will offset the upfront cost?

25.3% Fe grade? Even considered as poor grade in China. By Australian standard, it is waste, not ore. Try to upgrade it into 65%, you need at least 3t of ore to get 1t of sellable products. The mining and processing cost will be huge.

I disagree again. Low grade deposits can be just as profitable as high grade deposits provided they have sufficient size to offset the added cost. Lower grade deposits require more (or more complex) equipment to process the larger volumes of ore and hence generally more capex. The capex is apportioned and expensed to each tonne mined, so consider the simplistic fictitious illustration:
Capex: $100m
100mt
Situation A: Grade 25%
Situation B: Grade 50%
In situation A, the capex component of each tonne of iron is $4 and in B $2. It logically follows that if situation A had twice the tonnage, the expensed portion of the capex per tonne would be the same.

So grade isn't the only the you need to look at. Things like the size of the deposit as above, as well as the depth, the type of ore, impurities and the processing that's required.

The last thing I'll leave you to consider: A very high grade deposit that's deep and small might be worthless. A low grade deposit that's big and shallow could be worth a fortune.

 

[YELNATS]

Re: FWL - Ferrowest Limited

Block his IP host would suffice i think.

Blissful ignorance, mindless down ramping and a touch of jealousy. What a mix.

Perhaps the commentary could be moved to the jokes and funnies section?

Gentlemen/Ladies, judging by his/her nickname, this poster is only a beginner - ie. to be deciphered as "the-newbie". Perhaps we should be a little more welcoming and understanding towards newbies and less willing to condemn if their posts seem somewhat naive. On the other hand if he/she should ever be uncloaked as a charlatan, your vitriol is justified. regards YN

 

[danewbee]

Re: FWL - Ferrowest Limited

Situation A: Grade 25%
Situation B: Grade 50%
In situation A, the capex component of each tonne of iron is $4 and in B $2. It logically follows that if situation A had twice the tonnage, the expensed portion of the capex per tonne would be the same.

You are the only one that following the rules, no personal attack, no name calling although I pay no attention to this kind of noise.

YOu might consider this:

Situation A: Grade 1% with 50 times as much resources
Situation B: Grade 50%

According to your study, the capex per tonnne would be the same.

How about Opex?

It is very clear, FWL will not make good money being an iron ore producer for the reason of low grade ore, which need spending more money to process to higher grade for sell, or iron and steel making.

In stead, the company comes up with an idea of pig iron plant to justify the business case. It could be very successful, and could be a totally failure.

It will be fine if you understand the risk, It is not a blue sky. The management need to prove the capability to handle both mining business and pig iron making business. Otherwise, just remember, there are handreds of pig iron plants in China, Korea, and Japan, if not thousands. What is your advantage over them? And who want more pollution near their backyard?

This is why most iron ore companies, like BHP, RIO, FMG, MGX send most of their ore to China, Korea, and Japan, not to build more plants on Australian soil.

Good luck with FWL holding. I promise this is my last post if there is no more name calling.

 

[doctorj]

Re: FWL - Ferrowest Limited

You are the only one that following the rules, no personal attack, no name calling although I pay no attention to this kind of noise.

I also deleted a couple of your posts for the type of noise you talk about. Let he without sin etc etc.

It is very clear, FWL will not make good money being an iron ore producer for the reason of low grade ore, which need spending more money to process to higher grade for sell, or iron and steel making.

Your logic does not follow. Making less money than you would if it were a higher grade is entirely different to not making money. You're yet to present any information about why "FWL will not good money". You state it as fact without any analysis to support. This is why your posts have upset the locals. By all means challenge the status quo, but back it up with supporting evidence/calculations, not just gross, incorrect generalisations that might wash on Hotcopper but simply won't here.

I don't hold FWL and never have.