Australian (ASX) Stock Market Forum

Iron Ore

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Tiberium said:
Thanks Yeti. I have been holding BCI since the last two week, when it was $1.15; I bought it only because it's located in Pilbara :p:. BCI has exploration target of approx. 45Mt (58%Fe) but I’m assuming the tonnage could be higher after the resource estimation on the Outcamp Well and Coongan Well prospects in this quarter. Thanks a bunch to Kransky and Broadside who have introduced UMC to me, it definitely has slipped through my net. Pilbara is a very promising location for every iron ore explorer there, including BRM.
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Also, Giralia have got another deposit next door to BCI (to the North). They will be drilling on 5 deposits fairly soon (4 at present)
- Western Creek (next to BHP at Newman) DRILLING nice hits already
- Weld Range (next to MIS) DRILLING + jorc
- Earaheedy inland from Wiluna DRILLING +1billion tonne target 80km from proposed rail line to Mid-West
- 15 km south of Weld range DRILLING target 30-50 million tonne
- another deposit north adjoining BCI (can't remember the name)

I also hold BRM. Heard a rumour results won't be out there for another 2 weeks (was to be Feb 08).
Hold FRS too. It's got a target of 200 million tonne of DSO. News due Feb 08 there too not yet in.

Just some food for thought.
 
grace said:
Also, Giralia have got another deposit next door to BCI (to the North). They will be drilling on 5 deposits fairly soon (4 at present)
- Western Creek (next to BHP at Newman) DRILLING nice hits already
- Weld Range (next to MIS) DRILLING + jorc
- Earaheedy inland from Wiluna DRILLING +1billion tonne target 80km from proposed rail line to Mid-West
- 15 km south of Weld range DRILLING target 30-50 million tonne
- another deposit north adjoining BCI (can't remember the name)
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Surely Giralia is going to spin all of this out like they have with their other running assets...
 
kennas said:
Surely Giralia is going to spin all of this out like they have with their other running assets...
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Yes, I'm sure they will. They will prove up somewhat, so the projects look nice going forward. Spin-out and probably raise some funds for further work. If they spin out each one, that is going to be a lot of new companies. Giralia always tries to retain a fair share in the newly created one, and often distribute bonus shares back to Giralia holders so you stay with them as well. Should be an interesting year for them with the iron ore hunt on for one and all! I personally believe they have more going for them than Sundance, and much cheaper market cap even just on a pure iron ore play(for reasons stated before). They do have other non iron ore assets too.

Guess I should be posting this on GIR's thread....oops.
 
grace said:
Also, Giralia have got another deposit next door to BCI (to the North). They will be drilling on 5 deposits fairly soon (4 at present)
- Western Creek (next to BHP at Newman) DRILLING nice hits already
- Weld Range (next to MIS) DRILLING + jorc
- Earaheedy inland from Wiluna DRILLING +1billion tonne target 80km from proposed rail line to Mid-West
- 15 km south of Weld range DRILLING target 30-50 million tonne
- another deposit north adjoining BCI (can't remember the name)

I also hold BRM. Heard a rumour results won't be out there for another 2 weeks (was to be Feb 08).
Hold FRS too. It's got a target of 200 million tonne of DSO. News due Feb 08 there too not yet in.

Just some food for thought.
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Congratz to you Grace and all the holders of BRM! BRM has finally borne very very big fruit :) I had BRM when it was only $0.80, this arvo it was just happening by chance I looked at ASX site and BRM's headline was on top of the list :p: otherwise I wouldn't be aware of the good news. I'm now looking at TRH (Transit Holdings), if I'm not mistaken TRH's location is near major players, such as Portman Mining. Good luck and good night all!
 
Atma said:
sector getting smashed. slipped is an understatement. only UMC(best of the bunch) is good. rest are no good!
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Nice piece of analysis to come to that conclusion Atma. Great work.
 
I have been trying to find a nice iron ore stock and the rail acess annoys me no end. Here we have so much capital, staff, lab work tied up that is well needed elsewhere if there is never ever going to be transport options available. I think the government should build railways and ports. Then they charge the users, so user still pays but ownership is in the national interest.

We have so many delays and staff shortages creating cost pressure yet we tie up these resources in a sector that is unsure of it's future.

Poor government imo.
 
All of the iron ore juniors suffering utter carnage, and mine particularly today. This sector, and the coal seam gas sector, are the only two sectors I have real faith in over the next 2 - 3 years, so I hope I'm not wrong!:D

Would love to hear others' thoughts.:)
 
Grace

I agree, well if bulk commodities do not survive whole aussie economy down the porcelain. I see major institutions going from one sector to another, atm they are saying the resource sector did not get the correction other sectors got earlier this year so now their turn. Not sure there is anymore logic behind the goings on than that. The boom may well be over but still will be healthy. Depends on definition of boom I guess. I do know some iron ore stocks I wanted to buy did not seem to offer potential of huge returns in the immediate future and speculative stocks' main attraction are huge gains. So I will wait atm for a nice low entry point and just hope I pick the winning stock.
 
Spaghetti said:
Grace

I agree, well if bulk commodities do not survive whole aussie economy down the porcelain. I see major institutions going from one sector to another, atm they are saying the resource sector did not get the correction other sectors got earlier this year so now their turn. Not sure there is anymore logic behind the goings on than that. The boom may well be over but still will be healthy. Depends on definition of boom I guess. I do know some iron ore stocks I wanted to buy did not seem to offer potential of huge returns in the immediate future and speculative stocks' main attraction are huge gains. So I will wait atm for a nice low entry point and just hope I pick the winning stock.
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Well, looks like China is going to die immediately after the Olympics are finished, and they will no longer need any of our resources. Brokers are pushing the banks at the moment. I disagree with their verdict. I don't own any Bank shares, nor will I for a few more years. Hope I'm right.:D
 
The olympics is funny. More like more iron ore discoveries if anything. Also read far more recycling due to high steel prices. So I see a few reasons for iron ore sector to come off boil but the olympics is not one of them. lol Wonder how much these people get paid to come with such rubbish.
:banghead:
 
Have been trying very hard to find a good little stock out there. Hard. When you see what iron ore is keenly sought you see RIO, BHP and FMG all with grades between 60% and 64% , makes the others look quite woeful.

CID seems complicated, was reading how BHP took years of testing to satisfy the requirements of it's japanese customer. Is this a common problem and why some CID explorers are so cheap? Think you need to be very knowledgeable to know which maybe good. Maybe reason I cannot understand why BCI has such a small market cap..or another reason?

Maybe I am being too selective but those that are not close to mining may have to have really high grade resource at quite high tonnage to make it. I cannot find one that meets my criteria atm. A couple may in time but...maybe a big ask.
 
Just read ocean equities ltd’ iron ore report, I’m still bamboozled with how iron ore deposit was distinguished between Marra Mamba, CID and Brockman iron ore type. I only know is if an explorer has iron ore deposit >55% Fe grade and low impurities, it could mean that this explorer has saleable and profitable iron ore deposit. I wonder how the experts know how to perceive which explorers or producers have Marra Mamba, CID or Brockman iron ore type. Could anyone please help? Thank you.;)
 
Tiberium said:
Just read ocean equities ltd’ iron ore report, I’m still bamboozled with how iron ore deposit was distinguished between Marra Mamba, CID and Brockman iron ore type. I only know is if an explorer has iron ore deposit >55% Fe grade and low impurities, it could mean that this explorer has saleable and profitable iron ore deposit. I wonder how the experts know how to perceive which explorers or producers have Marra Mamba, CID or Brockman iron ore type. Could anyone please help? Thank you.;)
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Here's some comment from Ocean equities again. They like Atlas and Ferraus (I hold FRS). They also mention a few others at the bottem (I hold BRM).

Iron ore juniors still a good bet
-----------------------------------------------------------
Wednesday, 20 August 2008

LONDON-based broking firm Ocean Equities says that despite the plunging market, the junior end of the Australian iron ore sector still offers value for investors. By Kate Haycock

The company, which specialises in small and mid-cap mining stocks, said iron ore juniors still represented a solid investment opportunity despite volatility in resource equity.

The brokerage noted that Rio Tinto’s recent win with the Chinese in gaining the freight premium – which passed on to BHP Billiton and Australia’s newest iron ore miner, Fortescue Metals Group – further de-risked the sector and was a formal recognition of the greater value-in-use of Australian iron ore.

Analysts at the company said the freight premium set a precedent for longer-term pricing that was expected to continue beyond 2009.

“Given the higher-cost freight environment and longer-term outlook for the oil price, freight appears set to become an ever increasingly significant component in the total cost of steel production,” the brokerage said.

The firm also predicted next year’s negotiations would be just as tense, with Australians again pushing for a higher recognition of the freight differential.

“We believe the break in the traditional price negotiation process will result in an aggressive resumption of negotiations into [the next Japanese financial year] as the Australian majors attempt to gain further benefit from the freight cost differential and further close the gap between the annual contract and spot price mechanisms,” the brokerage said.

The freight premium also would partly insulate the iron ore sector against the risk of a contraction in iron ore pricing in the medium to long term, offering further support to the junior iron ore sector.

Meanwhile, iron ore miners would continue to take advantage of the new over-the-counter iron ore market established by Credit Suisse and Deutsche Bank.

The shortfall in ore supply in relation to demand would continue, with another 50-60 million tonnes per annum to be required by Asian steelmakers in the medium to long term – both factors boding well for the continued strength of iron ore as a commodity and an investment opportunity.

“This [rising demand] is effectively the equivalent of 1.1 to 1.23 new Fortescue’s coming onstream each year,” analysts at the company added.

Out of the junior iron ore sector, the brokerage said the change in contract pricing to a higher value for lump ore over fines had increased the Australian premium for this product to around 40%.

This could be expected to continue, Ocean Equities said, if shipping costs continue to rise, with lumps representing better value in transporting.

As a result, the premium for lump ore could be expected to widen in coming years, which will continue to favour companies with higher-grade, lower impurity deposits.

Nevertheless, with the higher-quality Brockman deposits becoming depleted in the Pilbara, other deposits – such as the Marra Mamba style of ore, and Yandi or Channel Iron Deposits – will continue to produce a growing quantity of the Pilbara’s ore.

Ocean Equities said given the increasing importance of higher grade and lower impurities, its pick of the juniors included Perth-based Atlas Iron and Adelaide-based FerrAus due to their estimated lump to fines product ratios.

Atlas is targeting production of 1 million tonnes per annum from the Pardoo operation, beginning in December. When additional direct shipping ore export tonnages start arriving from the Abydos project, the company is targeting exports of 6Mtpa by 2010 and 12Mtpa DSO by 2012.

FerrAus, meanwhile, has two key projects in the Pilbara: Davidson Creek and Robertson Range, which it hopes to bring into production in 2009 to ship some 6Mtpa by 2012, increasing to 10Mt in 2014, and up to 20Mt by 2017.
However, the brokerage warned potential investors in the sector to carefully consider the major impediment to any junior play wanting to establish an exporting mine – infrastructure.

The brokerage came down firmly on the side of juniors pushing for third-party railway access, and said that while the Western Australia government’s push to open access was welcomed, it was in the interests of the major miners and juniors to come to a suitable agreement among themselves – such as that recently signed by Rio Tinto and Iron Ore Holdings.

Atlas and BC Iron were well-placed in terms of infrastructure and memorandums of understanding with FMG over its rail and port system, while Brockman and Iron Ore Holdings were best placed to strike deals with BHP and Rio, the company added.

The brokerage also suggested keeping an eye on leading Asian steel makers looking for further “upstream integration” and further acquisitions, joint ventures and off-take deals would be expected in the Australian iron ore industry in coming months and years.
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Thought some may find the following of some interest. If you have more up to date figures, let me know.

And I still hold GRR.



Magnetite Iron Ore concentrate comparisons:

GBG ground to 25 microns = 68.5% FE, 4.00% SIO2, 0.08% Al2O3, 0.012 Phosphorus

ARH ground to 32 microns = 67.5% FE, 4.50% SIO2, 0.09% Al2O3, 0.030 Phosphorus

CFE ground to 26 microns = 66% FE, 5.8% SIO2, 0.45% Al203, 0.010 Phosphorus

SPH ground to 45 microns = 70.8% FE, 1.24% SIO2, (West Africa)

GRR ground to 38 microns = 68.8% FE, 2.06% SIO2, 1.41% Al2O3, 0.003 Phosphorus
GRR ground to 35 microns = 69.7% FE, 1.00% SIO2, 1.39% Al2O3, 0.005 Phosphorus




GBG info' from 30/4/07 page 1 http://www.asx.com.au/asxpdf/2007043...s8fz5bstdp.pdf

ARH info' from 17/7/08 page 3 http://www.asx.com.au/asxpdf/2008071...lkdfsmlr03.pdf
May08 http://www.austresources.com.au/pdf/...esentation.pdf

CFE info' from 14/02/08 page 2 http://www.asx.com.au/asxpdf/2008021...mq5vmjsr41.pdf

SPH info' from 31/10/07 page 7 http://www.asx.com.au/asxpdf/2007103...r6xdy8qlcv.pdf

GRR info' from 28/7/08 page 3 http://www.asx.com.au/asxpdf/2008072...bnntbl048x.pdf
05/5/08 page 24 http://www.asx.com.au/asxpdf/2008050...vy46wpgkvn.pdf
 

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