MGX 3.57% 94.5¢ mount gibson iron limited

iron ore prices

  1. 2,218 Posts.
    Just reading yesterday's Interesting that, according to Miningnews, there has been a firming of expectations for price increases of late for iron ore. Instead of a 3-4% increase predicted a few months back, commentators are quoted as expecting 5-7% and the Brazil mob CVRD are predicting 10%. Of course, many of these people have vested interests in raising expectations, but the outlook looks good, particularly with the likelihood of no real discounting in the Chinese mkt (MGX's likely main customers) on the benchmark rate.

    With MGX capitalised at less than AUD25million, and having just raised AUD11million to fund development of Tallering peak and the port handling facilities, current company guidance puts them on a PE of around 2 for first years full production. This figure includes tax losses, but their exhaustion should be compensated for through the development of the Mt Gibson deposit in 2004.

    MGX still have egg on their face from the aborted late 2002 capital raising so still have to kick a few goals to get back on track credibility-wise. However, if iron ore does become one of the commodities of choice in brokers recommendations for 2003, MGX could well be a good small-cap pure iron ore play. Klown thinks there are 'a few suprises in store'. I have no idea what these means, but the risks seem to be the upside to me.

    As always, do your own research and don't rely only on what anybody says on HC.


    I hold MGX and have been accumulating.
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