MGX - Mount Gibson Iron

[Porper]

Yes, 0.08% lower than last week. That's not very exciting to me. Is that significant astojic?

Big volume on MGX today and it went down 1 % or so. That's not normally good is it?

Agree, there is some good old ramping going on with MGX, however it did close well off it's lows on huge volume so there were buyers willing to pay up.

A Doji close with high volume is usually a sign of a reversal (dramatic) so tomorrow will be interesting.If I was a bit more of a risk taker I would bet these will reverse tomorrow, of course Gold and the Dow could get hammered tonight and it could go down 10 %

 

[chansw]

I'm in late on this one though, thought i'd make some quick beer money just before christmas. But turning in to very a dry argument !!!!!!
Holding 5k@ .83
Cheers

If I remember correctly, the Russians paid $23.33 million for 77.8 million Aztec shares (around $0.3 per share) from Australian Royalties Corp. That valued MGX at $0.9 per share. Hopefully, your beer will turn into nice champagne.

 

[bvbfan]

Could the trade be from AZR holders exiting and perhaps some funds entering
Don't think it will happen until AZR is bedded down into the company

 

[astojic86]

um

mgx doesn't mine Gold - and mgx has locked in price rise for another year, there is no reason for this stock to go down, they are about to start shipping ore from azr's mine.

so commodity prices shouldn't affect this thing.

 

[Sean K]

um

mgx doesn't mine Gold - and mgx has locked in price rise for another year, there is no reason for this stock to go down, they are about to start shipping ore from azr's mine

so commodity prices shouldn't affect this thing

While hedging in the short term might support it, any commodity price depreciation or appreciation will effect all companies related to that particular resource. If there was no reaosn for the stock to go down, why is it off it's highs?

I am not being negative to this stock, just trying to keep things objective. Blanket statements saying this stock will not be effected by market conditions are inflammatory.

 

[astojic86]

http://www.wabusinessnews.com.au/en-story.php?/1/47569/Sundance-plans-3bn-African-iron-ore-project


Jones predicts strong iron ore; Sundance approves $3bn plan
8-January-07 by Mark Beyer
Latest News

Sundance Resources chairman George Jones has predicted an 8 to 10 per cent increase in iron ore prices in 2008, which would help to attract support for the company's $3.1 billion Mbalam iron ore project in west Africa.
Mr Jones, who also chairs aspiring Mid West iron ore miner Gindalbie Metals, was speaking at Sundance's extraordinary general meeting today.
The meeting approved a $30 million capital raising, which will allow Sundance to accelerate its pre-feasibility study and exploration program.
Mr Jones said he joined Sundance last year because of "the potential quality and scale" of the Mbalam project, located in the Republic of Cameroon in west Africa.
He believes the strength of the global iron ore market augurs well for the company.
"I expect iron ore prices to again increase in 2008, probably by around 8 - 10%, on the strength of the continuing and growing demand for high quality iron ore from China and other Asian and European markets," Mr Jones said.
The Mbalam project requires extensive infrastructure, including power and water to the mine site, construction of a 490 km rail link to port storage and export facilities, and development of a new port facility on the southern coast of Cameroon.
"Indicative capital cost estimates for the project are in the range of US$2,460 million (A$3.1 billion) for the establishment of a long-term operation producing 35 million tonnes pa of direct ship hematite," he said.

The company's announcement is pasted below:

SUNDANCE ACCELERATES WEST AFRICAN IRON ORE PROJECT AFTER COMPLETING $30M PLACEMENT
SHAREHOLDER APPROVAL RECEIVED FOR SECOND TRANCHE OF $30M PLACEMENT

International iron ore company Sundance Resources Ltd (ASX: SDL) has announced the commencement of an intensive 2007 work program at its flagship Mbalam Iron Ore Project in West Africa after today receiving shareholder approval to complete the second tranche of a $30 million capital raising. The substantial raising will enable Sundance to accelerate its pre-feasibility study and exploration program to be carried out on the Mbalam Project.

At a shareholder meeting in Perth today (8 January 2007), approval was received for the issue of 219,812,500 ordinary shares at 8c each, to raise $17.6 million. The first tranche, comprising the issue of 155,187,500 ordinary shares at 8c each, was completed on 30 November 2006 under the Company's 15% placement capacity and in accordance with ASX Listing Rules.

The placement has resulted in the introduction of a number of leading Australian and international institutional shareholders to the Company.

Speaking at the shareholder meeting today, Sundance's Chairman, Mr George Jones, said the Company was now well funded to pursue an aggressive pre-feasibility drilling program with the aim of confirming the potential of the Mbalam Project to support a resource of 1,000 million tonnes of high-grade hematite at Mbalam.

"The Mbalam Project is potentially a world-class hematite project, strategically located midway between European and Asian markets, and our focus will be on enhancing the value of this asset as rapidly as possible," Mr Jones said. "With continuing strong demand in the iron ore sector - as evidenced by the recent 9.5% price increase accepted by Chinese steel mills - we believe that there is a significant opportunity to develop a large scale, high grade iron ore project."

"The resource defined by previous exploration has shown that the Mbalam Project, which is located in the Republic of Cameroon, has the potential to be at the forefront of a new generation of major iron ore projects," Mr Jones added.

"The important message to get across is that the Mbalam Project is located within one of the world's emerging iron ore provinces in West Africa. It is in the same region and geologically similar to the US$3 billion Belinga Project under development by China National Machinery and Equipment Import and Export Corporation in Gabon, 170km from Sundance's Mbalam Project, and other large iron ore projects currently under evaluation in Guinea. Sundance has a significant potential opportunity to develop a large-scale iron ore export business, delivering large volumes of high-grade hematite ore to international markets".

'With installation of our new expanded management team, headed up by Don Lewis, we are well placed to unlock the true value of this project over the coming 12 months," Mr Jones said.

Sundance plans to use the funds raised in the placement to expand its pre-feasibility drilling work over the 875sq km Exploration Permit No. 92 held by Sundance subsidiary, Cam Iron S.A.

"Our key focus this year will be the completion of an expanded exploration program as part of our Pre-Feasibility Study of the Mbalam Iron Ore Project. This will initially target the Mbarga prospect as identified in previous exploration by the United Nations Development Fund. This previous work identified an Inferred Resource of 800 million tonnes iron ore, including 218 million tonnes grading more than 60% Fe, based on a very limited drilling program covering just 2.7km of strike length within our Exploration Permit area", Mr Lewis said.

"Airborne magnetic and radiometric surveying recently completed by Sundance have identified 26 highly prospective magnetic anomalies and targets, at depth and at surface, consistent with the previous drilling work by the UN. The data suggests in excess of 35km of prospective iron formations within the permit area".

Sundance plans to mobilise diamond and RC drill rigs to site as soon as possible to confirm the potential of the Mbarga prospect. "Our initial focus will be to confirm a resource of 300 million tonnes of hematite grading more than 60% Fe from this prospect. The next stage of work will aim to expand the resource base to at least 1,000 million tonnes of high grade hematite by targeted exploration of high priority targets identified from our aeromagnetic surveys," Mr Lewis said.

The pre-feasibility study being undertaken by Sundance will focus on the exploration program but will also include preliminary engineering, infrastructure and environmental planning required to progress project development. The expanded Pre-Feasibility Study is scheduled for completion by end 2007.

 

[astojic86]

While hedging in the short term might support it, any commodity price depreciation or appreciation will effect all companies related to that particular resource. If there was no reaosn for the stock to go down, why is it off it's highs?

I am not being negative to this stock, just trying to keep things objective. Blanket statements saying this stock will not be effected by market conditions are inflammatory.

You are right if commodities are down this stock will be affected but I think it should be slightly less affected as this company hedges.

Also chinese can not mine ore grades that we have in Australia, they cannot get them that is why they have to accept price hikes all the time.

 

[astojic86]

Japan Accepts PRICE RISE AS WELL good for IRON ORE INDUSTRY

http://www.forbes.com/markets/feeds/afx/2007/01/07/afx3306551.html

Japan steelmakers face 80 bln yen in added costs for iron ore in FY07 - report
01.07.07, 10:40 AM ET


TOKYO (XFN-ASIA) - Japan's steelmakers are finishing up with negotiations for fiscal 2007 purchases of iron ore, and the agreed-to prices will increase their procurement costs by an estimated 80 bln yen, the Nihon Keizai Shimbun reported.

Iron ore is sold in three forms: powder, lump and pellets. More than 60 pct of the iron ore procured by Japan's steelmakers is in the form of powder.

Nippon Steel Corp (other-otc: NISTF.PK - news - people ) and the other four major Japanese steelmakers have agreed to a 9.5 pct increase in the price of powdered iron ore from Brazil's Companhia Vale do Rio Doce (nyse: RIO - news - people ) SA for fiscal 2007 shipments, the paper said in its online edition.

The five steelmakers are expected to also soon finalize an agreement with Rio Doce on a 9.5 pct hike in the price of lump and a 5.28 pct rise in the price of pellets, the report said.

These prices are comparable to the prices already negotiated by the Brazilian firm with leading steelmakers in China and Italy, it said.

Japan's steelmakers are said to be ready to agree to similar price hikes in their negotiations with BHP Billiton (nyse: BBL - news - people ) and Rio Tinto, the paper added.

China's surging demand for iron ore has sent prices upward since fiscal 2003. In the four years through fiscal 2006, Japan's steel industry shouldered cumulative extra costs of 2.5 trln yen, according to the report.

 

[surfie]

All small aust iron ore miners are in bed with either russians, chinese, koreans etc. The name of the game for the foreigners is buy a big slice of the aussie company to guarantee supply for decades to come and at same time avoid being captive of the BHP's of this world.

For example: MMX in WA midwest starts ore shipments this month but POSCO (Huge Korean steel mill) bought 10% of the company at bargain basement price subject to guarantee of 10 million tonnes / year supply of iron ore from 2011 onwards. This will be 40% of MMX total production when fully operational.

They are all doing these deals. And that is why the share price like MGX hits its high in such a dramatic way.

If its good enough for POSCO its good enough for me.

Because iron ore price is fixed it is not subject to commodities down turn until next negotiations in 12 months. For now they enjoy the 9.5% increase from April.

For companies likw MGX, MIS and MMX it is hard to see any losses for shareholders who get in AND HOLD ON FOR THE LONG TERM. The big profits will be made by holders not short term traders. These companies are actually about to produce something other than pie [or yellow cake] in the sky. That is why the WA government will approve a $1 billion rail link from the mine sites and build a new port just north of Geraldton.

I have been in MMX for 1 year and continuing to accumulate on weakness. No selling for me - yet.

 

[simonb]

Second Quarter Activities Report was posted by MGX today... What do people think? any surprises?

On reading the report, despite 'record profits' it appears that they were certainly less than predicted.

I am not sure about how much of a concern the EPA's recomendations regarding the Extension Hill Magnetite Project (recomendation about classification of adjacent land to the proposal site being secured as a class A reserve and that MGX apply adequate management resources to this reserve) affects MGX's proposal.

Would be interested in others expectations for this stock over the next 3-6 months.

cheers

 

[TheAbyss]

MGX Volumes on Commsec state in excess of 50 Million. Can anyone confirm if this is correct? 50 million is way over usual trading pattern.

 

[redandgreen]

50million confirmed.
Insto buying maybe....

 

[TheAbyss]

Checked, the volume today was a tick over 50 million. The last time this stock hit volumes of this level was Feb/ March 05 when the sp went from 20c to 92 cents.

Would appreciate it if someone could offer up some thoughts as to what the lift in volume might be about? Perhaps a stakeholder moving in to lock in some iron ore supplies at a good rate?

 

[redandgreen]

It is due for a run sometime soon... methinks.

 

[TheAbyss]

The 78 cents early today was the lowest this stock has been since October last year and they do have a pile of Ore under them so perhaps a company has been waiting to take a bite and figured this was as low as it was going to go (See Surfie's post earlier this month)?

Instos another possibility or maybe YT is about to start a PR campaign

 

[bvbfan]

48,373,197

5.5$41,117,217

portfolio crossing I'd say but too lazy to check it out

 

[BSD]

It was a Special - not a portfolio

Above market at the time

Great stuff

 

[benwex]

I think it has to do with the issueing of MGX shares from the AZR take over.....

 

[nioka]

I think it has to do with the issueing of MGX shares from the AZR take over.....

That would not be a trade on the asx. Watch for an announcement of a notice of change in substantial holdings. Glad I did not hold when they "stole" my small stake in AZR. If you check the intraday trading you will see that there was very few sales near the closing price which was after 4PM and was brokers trading. AZR was a good business ruined by a worse one.

 

[TheAbyss]

Thanks for the valuable insight everyone. A few more questions if i may? Thanks in advance for the assist.

If this is a non event and/or negative for the shareholders (which i am one of), why is the average share purchase price for todays volumes so much higher than the share price has been of late?

The 50,005,737 units sold at a value of $42,445,206 which equates to an average of 84.88 cents per share. My point being that if a large lump of shares were done at off market at a discounted price then that would lower the average, not elevate it.

Why so high compared to the earlier share price today (79.5c)? The shares haven't been at 84 cents since mid december. Would they have worked out an average share price for an off market deal last year and implemented at that price now?

Any advice appreciated and please forgive my ignorance