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Iron Ore Junior Comparison

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There's talk that BHP may be going to pay $220m for UMC, sorry lost the reference.

Even if not, lets check their current EV to tonnage to get an idea of how much a junior IO is worth.

EV is $135 with 122Mt DSO so they're currently valued at $1.1 a ton DSO.

With a $220m MC that would take them up to $1.71 a ton.

Need to look at all the other pros and cons of the company to decide on what else they have going for them, including nearology, and then take a guess at what some others could be worth for a takeover.

Spreadsheet arranged according to cheapest to most expensive DSO.
 

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Hi, good table it's a great place to start with these companies, but I have a couple of general questions.

What grade of Fe is officially classed as DSO, is it >57% and is this a standard/official definition. Can you take your high grade ore and blend it with lower grade to come to this number, generally speaking.

With regard to the Chinese taking stakes in these juniors (or not so juniors) do you think that they may get screwed on pricing. I see that Fortescue is going better now the Chinese funding has been scrapped, I guess the market was worrying about the discount to spot they'd be forced to swallow for years to come?
 
Not sure of the exact number for DSO, I thought more like over 54%. Might depend on impurities also. Less Si and Al the better.

BHP are valuing UMC at about $205m which puts an EV to tonnage price of $1.55 ish.

On the table that makes anything under $1.00 a ton of DSO look pretty cheap. Then check the location for infrastructure and depth and quality of the ore.

Top 5 are:
GWR $0.28
DMM $0.48
FRS $0.65
WPG $1.04
BCI $1.15

I'm personally liking the look of FRS from that list.

BRM isn't included because the detrital hematite needs benefication. If you call it DSO, it rates just 13c a ton. And a BHP rail line practically runs through the deposit.
 
Saw an ann from ACS - should they go on this sheet? Don't know the details (not been following them).
 
A junior that hasnt been covered yet:
Mindax - MDX
Shares: 129million
Cash: $7.6 million
Share Price: $0.50
Market Cap: $64.5 million
Top 20 own 81.8%

Initial Exploration Target: 90-100MT DSO, 650-750MT Mag. No drilling has taken place yet, but they are due to start next month. They have been having permit problems due to native title considerations.
 
Like the way the market has re-rated IOH. Certainly the up and comer.

GIR and FRS next best.
 
This was an excellent thread, did it just run its course, or has it moved to another location? I'm based in China and might be able to add some market perspective if this topic is still alive. One other comment is that getting the ore to a port and loaded economically is crucial, otherwise, it's just dirt in the ground. Does anyone have a realistic assessment on which junior will be in a position to start shipping ore soonest?
 
Nonferrous Pete said:
This was an excellent thread, did it just run its course, or has it moved to another location?
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Hi Pete, it hasn't moved, just a bit less to talk about recently for whatever reason. World is going to need IO for some time yet so as information is added over time and the spreadsheet is updated, good opportunities should still present themselves.
 
Wow, some massive changes in junior explorer and IO explorer MCs the past few days. Obviously due to overall market implosion and the Rudd super tax thingy, but geesh, panic has set in. Should expect a bounce, but who knows. eeeek.

BRM, what a disaster sell off for short termers in late.



Could be a good opportunity coming up in the long term IO sector IMO.
 

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kennas said:
Could be a good opportunity coming up in the long term IO sector IMO.
Click to expand...

Yeah I reckon there will be some absolute bargains to be had when the time is right... I'm keeping a close eye on BRM, AGO, FRS etc...
 
it became a commsec margin loaner too recently, so that wouldnt help matters, tho only lvr 35pc.
might help its rise again....
 
Just wondering what others may think in relation to a range of iron ore and other mining juniors

Has fear and doubt surrounding the reaction to hte super tax, which has hit at roughly the same time as re-newed fears overseas, lead to a greater drop in SPs than warranted?

Opinions would be interesting.
 
Could be, but I do wonder if it will mean the difference between getting something off the ground or not. Can BRM now accress the billion plus in debt they need for Capex? Maybe it will mean projects don't going...

Or, this correction is going to provide another great opportunity to buy once things are truly oversold like they were in March last year. Probably not there yet. Europe looks untidy and fear reigns.
 
Thanks Kennas. Appreciate your experience. There certainly doesn't seem to be any reason to be buying anything at the moment.
I just had a look at the monthly competition list and had to chuckle - even with my guess right near the bottom....
 
Worth noting though - Weekend Australian had an article re RIO ramping up production which said IO prices were nearing pre-GFC highs of $197/t With freight charges currently running at $13/t they said RIO were making $170/t atm!! Mate, for any juniors in/near production this has to be a good time to get them - obviously keeping an eye on world issues to make sure you don't jump in too early

For mine, IFE having dropped back to $1.15 from $1.60 over the last week look a goer - heading for 2Mtpa by the end of this year which for a $45m MC looks pretty darn cheap if they're going to be getting $150/t and costs are $60/t means they'll be pocketing a nice $90m/annum (50% TRF/50% IFE) although this deal with the Chinese gives 30% of that away for a mere $35m input??? ****e I mean why would you do that, surely they could have got the money from an Aussie company for better rates than that??

Anyway enough ranting from me

PS Don't hold but might jump in over next few days?
 
The only one I plan to continue to hold [as of today] is AGO...

But I may change my mind, or not - or just go fishing!
 
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