Iron Ore

[Huang Chung]

Thought it might be useful to start a general thread on Iron Ore.

For those interested, here's a link with some background information on things to be mindful of when choosing an iron ore stock:

http://www.apollominerals.com/images/apollomi-45--ukaed.pdf

[Huang Chung]

An article from today's Australian:

http://www.theaustralian.com.au/news/ore-price-nears-new-high-as-chinese-demand-soars/story-e6frg6n6-1225813999885

[Huang Chung]

Although a 2006 publication, pages 16 to 21 of this Hartley's report provide some very useful background information:

http://www.mtgibsoniron.com.au/uploads/Iron%20Ore%20Book%202006%20-%20Final%20Email%20Version%20-%20reduced%20file%20size.pdf

[gazprom1]

Thanks HC. Interesting reading re the benefication process. I own some PLV and they released some figures from some ore that had gone through the benefication process - tied back nicely with the articles you posted.

The main problem with the junior miners/oilers is capital and the timeframe to get from discovery through to production...

Thanks
Gazprom

[drillfix]

Great posts there HC, good news for the whole sector across the board I reckon, but of course primarily the producers leading the way.


Gaz, thought that the last PLV Ann about its benefication and grades would have seen the SP roll up much higher than the current level. It goes to show that the market does not care why a director sells, but the sheer fact that that if he sells the markets takes caution which is a knee jerk reaction I guess, but a pitty nontheless.

Only if I had more funds, then I could be across the board a bit more in this sector.

[airedale]

Thanks, Huang, I have a small holding in TTY Territory Resources. They are producing from a mine near Darwin and are the closest ore producer to China. Financial problems have weighed on them in the last year, but they are now supported by global resource traders... Noble Group. Production is increasing...may be a take over target. But worth watching.
Discl: holding

[Pelm1]

Gaz, thought that the last PLV Ann about its benefication and grades would have seen the SP roll up much higher than the current level.

Drillfix. the market yawned when the sandstones announcement came out, I agree.

What we need is a resource upgrade including the sandstones. This is due out "very soon".

All small pieces of the puzzle at the moment..

;):D;)

[drillfix]

Drillfix. the market yawned when the sandstones announcement came out, I agree.

What we need is a resource upgrade including the sandstones. This is due out "very soon".


Hi Pelm,
Yes indedd it did mate and a big sleepy type of yawn at that but say, what exactly is your definition of very soon? Week, Month, Three Months? Curious to know your thoughts on that ;)

PS:
Dont forget to check your Sig on HC as it says Wanganin.
The correct spelling is with an o. As in Wonganin ;)

[Pelm1]

Hi Pelm,
what exactly is your definition of very soon? Week, Month, Three Months? Curious to know your thoughts on that ;)

PS:
Dont forget to check your Sig on HC as it says Wanganin.
The correct spelling is with an o. As in Wonganin ;)

Drillfix. yesterday Tony replied when asked: when to expect the final results To quote Tony "The Csiro results look very good but we need the full report to confirm what it means. Not sure on the timing but very soon."

So this may just mean more results, i.e after further testing or it could mean a resource upgrade. I may have mislead before, now that I have thought about it.. at worst the resource upgrade will be early next year i.e before the end of Feb.

As to my sig on hotcopper lol.... I have the correct spelling:)... I asked Tony, he said it is spelt with an "a" but pronounced with an "o" hehehe btw, I thought that you were suspended ??????:eek:

[drillfix]

I asked Tony, he said it is spelt with an "a" but pronounced with an "o" hehehe btw, I thought that you were suspended ??????:eek:


Thanks for the clarification there Pelm, and Yep, I'm suspended on HC but haven't really needed to go back, I like it here, nice, quiet, good folks and an agreeable difference in opinion when a disagreement takes place.

But I can still read and view over there under another Alias so that will do me~!

[Huang Chung]

Looking forward to GIR's planned commencement of production in 20011/2012 :rolleyes:.

http://www.abc.net.au/news/stories/2009/12/31/2783317.htm

[Huang Chung]

http://www.businessweek.com/news/2009-12-30/iron-ore-jumps-most-in-5-months-on-indian-tax-concern-update2-.html

[Pelm1]

I like this line by Australia & New Zealand Banking Group Ltd. analyst Mark Pervan "Really at the end of the day iron ore is a location story"

PLV ticks that box better than all other juniors, hands down!! :D:D:D

Cheers Mark ..

Edit: Sorry this is turning into the plv thread :)

[Huang Chung]

PLV groupies everywhere, but I'll stick with Giralia, thanks very much :cool:.

[drillfix]

PLV groupies everywhere, but I'll stick with Giralia, thanks very much :cool:.

Huang, LOL

Mate I would put some doe on GIR if I had some, however to me GIR has run quite hard and PLV has taken a Kicking due to whatever. So this leaves a heap of Upside for PLV to run to even return to previous support/res lines.

Now, as you know, there are quite a few IO plays out there. Can we be on them all???? Some people can because they are cashed up or have funds.

There must be somebody out there that holds Both GIR and PLV surely??
Chances are if they do, then they also hold, FMG, AGO, BRM and a handful of other IO stocks and then swap Position Size accordingly to make up the Sled Dog team with one being the Lead.

How about other IO's that nobody seems to talk about, ie: FXR (mt. oscar) and AON (mt. oscar) along with a mixed bag such as VMS (tasmania), there are many other stocks out there maybe not with a stack of IO but they have some, its gotta be worth something, to someone, surely?

Over all position size, in this sector is important, but you and me are not merchant bankers or Fund Managers so we cannot spread across the sector like butter on bread.

Some already have run hard, some need to run hard, some need to trade sideways due to the waiting game and its only then people start thinking about position size and their stocks direction and upside. This may not be reflective to your strategy of holding say GIR but if you held a few stocks, you would then be in the position to have to decide which ones will make up your sled dog team to get the best gains for your IO portfolio.

Sorry for all the babble, must be all these seminars I do ;)

[Huang Chung]

Hi Drilly

I've never been one to spread myself thinly across a sector...basically try to pick the stock with the risk / return profile I'm most comfortable with and then go for it. It's not so much a case of being unable to afford to spread myself across more IO stocks, but a conscious choice to focus on what I see as the best.

Sometimes it works, sometimes it doesn't, but I won't die wondering.

Anyhow, good luck with PLV Drilly.

[Huang Chung]

Drilly, regarding Mt Oscar...take a look at p23 of the attached presentation.

http://www.stocknessmonster.com/news-item?S=GIR&E=ASX&N=472284

According to a very good mate who is a metallurgist with significant IO and base metals experience, the grind size is just so important when it comes to the viability of magnetite projects. The actual magnetic seperation is a doddle by comparison.

Now that chart is not the be-all and end-all when it comes to comparing magnetite projects, but it does help me decide, on a relative basis, where I might want to put my money, and where I wouldn't.

[drillfix]

Drilly, regarding Mt Oscar...take a look at p23 of the attached presentation.


HC, hope you dont think I was tooting my horn about Fox and Mt. Oscar, it was only an example and probably a bad one at that :o

With regards to GIR, I do say, nice pres by the way :)

[Phar King]

Hi Guys, Early last year I checked out GIR and MMX......went with MMX [yes I knew the legal crap was looming] Should all be finalised next month and then MMX should be the IO team to be on?????Your thoughts would be appreciated.

[Huang Chung]

Hi Guys, Early last year I checked out GIR and MMX......went with MMX [yes I knew the legal crap was looming] Should all be finalised next month and then MMX should be the IO team to be on?????Your thoughts would be appreciated.

MMX doesn't rock my world Phar King.....a billion dollar market cap but less DSO ore than Giralia?? The substantial part of the Jack Hills ore is low grade stuff requiring beneficiation. Nothing necessarily wrong with that, but not the space I'm looking to be in (Giralia are also in the mid-west region with their Beebyn project, which, at this stage of the game, I would rate as one of the least exciting of their seven iron ore projects).

If you haven't checked Giralia out for over a year, I'd suggest it's time you take another look.....and I'd suggest you start that look with their McPhee Creek and Mt Webber projects. McPhee Creek has come out of nowhere, and is shaping up to be a real company maker.

[Harry7]

Hi Huang,

Thanks for the thread and recent posts as well on GIR. What's your take on IOH/Iron Ore Holdings ? - recent resource annoumcements, grade, DSO?, Kerry Stokes 51% owner, friendly relationship with RIO who are next door etc

Quality of the iron ore in terms of alumina content etc, size

Access to rail/transport and port infrastructure

Lowish market cap/MC atm, $285M

How would you compare it to GIR, about same MC. Can't find anything on this company here

Appreciate your thoughts on this

[Huang Chung]

Gees Vic, it's hard to fault IOH's resource base, isn't it :rolleyes:.

Like GIR, it looks like there is plenty of upside to come from their respective drilling programs. GIR has significantly more cash.

IOH resources look to be entirely dependant on either rail access or mine gate sales....no option of trucking to port. If a major wants the IOH ore for blending, it must be pretty good. I wonder what price they would get for their ore with a mine gate sale?

So, given I've only has a quick look, I'd have to say I'm impressed. If they pull back a bit, I'd probably think about having a nibble myself.

[Huang Chung]

Pricing shake-up:

http://www.theaustralian.com.au/business/story/0,1,26715128-36418,00.html

[drillfix]

Pricing shake-up:

http://www.theaustralian.com.au/business/story/0,1,26715128-36418,00.html

Good link there HC,

Guess we can expect to see the sector back on the boil again hey?

[Huang Chung]

Good link there HC,

Guess we can expect to see the sector back on the boil again hey?

Good news here, tempered by the Chinese changes to the reserve requirements.

http://topnews.in/china-s-central-bank-raises-reserve-ratio-second-time-30-days-2253364

This might be a short term negative for the markets to digest.

Ongoing or increasing financing constraints are likely to favour those IO players with low capital requirements to get up and running. Additionally, more port space could be freed up if some high cost projects run into financing difficulties and can't meet their deadlines and commit to their port allocations.

With Mt Webber and (most likely) McPhee Creek being essentially simple dig and ship projects, Giralia looks well placed in this tough environment.

[shasta]

Good news here, tempered by the Chinese changes to the reserve requirements.

http://topnews.in/china-s-central-bank-raises-reserve-ratio-second-time-30-days-2253364

This might be a short term negative for the markets to digest.

Ongoing or increasing financing constraints are likely to favour those IO players with low capital requirements to get up and running. Additionally, more port space could be freed up if some high cost projects run into financing difficulties and can't meet their deadlines and commit to their port allocations.

With Mt Webber and (most likely) McPhee Creek being essentially simple dig and ship projects, Giralia looks well placed in this tough environment.

HC

What's your informed opinion on GIR's offshoot CAP?

There Hawsons IO (Magnetite) project specifically, (seems large with high grades, even though conceptual NON JORC)

Pretty close to infrastructure

Have a few other projects (including an interesting Tin/Tantalum project), largely funded by JV partners.

Market Cap @ $0.135 = ~$10m, only 68m shares (Cash on hand ~$2m)

EV of ~$8m makes CAP look very cheap even as an explorer, wonder whether GIR would entertain buying it back on the cheap?

Only major downer for me is the options, that expire 30/6/10 with a strike price of $0.30 (would have raised around ~$7m to likely fast track drilling for a JORC resource at Hawsons)

Recent presentation

http://www.stocknessmonster.com/news-item?S=CAP&E=ASX&N=218085

[ozelectro]

What do you guys think of ROY? I hold a reasonably small parcel but like the look of them. Interested in some comments..

Cheers

[mark100]

What do you guys think of ROY? I hold a reasonably small parcel but like the look of them. Interested in some comments..

Cheers

I've been accumulating a few ROY at current levels. Not an expert in IO stocks but there seems to be value at these levels. I also trade GBG a bit

[Huang Chung]

My metallurgist mate tells me that for magnetite, it's the amount of grinding you have to do that will often make or break a project (he tends to ignore the non-metallurgical aspects though). The ore grade that you start with, of course, is also an important factor.

ROY's Razorback looks pretty good at this early stage to my untrained eye. Looks like they will be able to get away with a 100 micron grind, which by my understanding is pretty good. Could be interesting.

CAP's Hawson project has me wondering....ore grade looks pretty low and it's comparatively deep, and I couldn't find any info on how much grinding they'll need to do. Me?...I'd probably sit on the sidelines with this one for the mo.

If you haven't done so already, have a read of Giralia's scoping study on the Yerecoin magnetite project 150km north of Perth. It probably gives a little bit more detail which you might help you assess the ROY and CAP projects.

http://www.giralia.com.au/reportDocument/9%20Feb%2010%20-%20Yerecoin%20Scoping%20Study.pdf

[snowball]

What do you guys think of ROY? I hold a reasonably small parcel but like the look of them. Interested in some comments..

Cheers

I have a holding in ROY. Prospects seem greatly enhanced with the Razorback project. Also have the Warriedor JV (40%) with GBG but seems to move slowly where GBG have other resources close by where hold 100%.

I hold mainly via the options, ROYO. These are piggy back opts. Are dated Oct11 with 10c ex but can be exercised early in May10 with a 1:1 free additional opt on exercise dated Oct13 with 12c ex.

Expect the new opts where exercised May10 will have approx same value as the opts exercised (given additional time to expiry) so appears a margin in a strategy to buy ROYO well and exercise early.

Do the sums. Hope this helps if accum a stake.

[moimoi]

Don't ROY share some management or ownership with UMC.

If thats the case...then that will be reason enough for me to AVOID.

[corporateraider]

RAD is one of my favorites in this sector at the moment. The company has a very large conceptual target, but drilling is in its early stages. Initial drilling shows significant thickness of magnetite.
I believe that the progress of IRD through the last 12 months or so is a strong pointer to what RAD is capable of.
A bonus is that it is cum a 1 for 3 bonus issue.
Happy days ahead.