I called the MD earlier today - Mr Bromley. Very nice chap who had plenty of time to share. I would ask one question, and he would just talk and talk. I got the impression he's an old boy who's been in the game for years and is passionate about his work.
He seemed to have a lot of time on his hands as we just chatted about many issues such as his tenements, china, and subprime.
From memory, these are the points which were mentioned.
Mr Bromley said that they've had the Mt Forrest region for 20years and the
strikelength runs for 17kms and doubles back on itself.
MDX were origianlly drilling for gold at Mt Forrest, but
everywhere they drilled they had to cut through iron. This, along with with the current insatiable demand for Iron, was the reason for progressing with Iron sampling.
It
forms part of the Richardson range, from which IRM sampled 60%+ grades of Haematite as part of a Banded Iron Formation. Mr Bromley seemed to be very well aware of IRM's findings and shareprice increase. I got the feeling he is expecting the same.
He mentioned that the 17kms does not consist of a continuos Iron band but there are
several very interesting formations that run for a few kms each.
When I questioned why the results mentioned in the August release seemed to produce lower grades of Iron the IRM's 60%+, Mr Bromley said that the original sampling was so small (10 samples?) and wasn't from specific targeted formations. The current sampling is vast and they are very busy studying the many assays. Obviously it goes without saying that he didn't go into details, except that he seemed very positive
When I asked as to when we can expect some results,
I was told that the quaterely is out in the next few days which will have some information. The full picture will be announced within 2 weeks.
Gold results will also be out soon. We didn't go into too much detail, but he did say that the current resource will be able to provide good cashflow for future project developments.
We also touched on the Uranium JV with Quaser. I was told that this is a long term play and priorities are iron/gold.
I also questioned the timing of the entitlement offer. I asked "why not give the market the results and then offer the entitlement at 15c instead of 10c?"
I was told that the entitlement offer
was decided a long time ago, and then subprime hit the headlines to delay the placement. I get the feeling that he felt it was better to get the funding for future drilling arranged asap to secure the company's short-mid term future, than risk leaving the placement for a few weeks and have the volatile markets affect any capital raising again.
I found it quite amusing that Mr Bromley also like us follows the US markets. He said he was very unhappy at last Friday's Dow performance. This is understandable, as it could affect whether the placement is taken up. However, from where we stand with the current share price, this should not prove to be a danger.
I have to say that this seems to be a very shrewd move in which everyone benefits. Afterall, the dilution would only take the market cap to around $20million, and leave the company with a good few million in the bank.
All in all, I feel very confident that we should hear something very positive. If we do, I reckon this entitlement offer will seem one of the best bargains we've seen in the resources sector recently.