So we are targetting production in early 2014 from Iron Valley. MinRes have a track record of getting things done, Phils Creek to production in seven months.
The market with its current appetite for speccys it seems wants to wait till first production before pricing in first production revenue for IOH which should be a major milestone and re-rating catalyst.
So could be a waiting game for potential buyers but then again never know when the market finally comes to its senses. Lets not forget the IV deal is revenue positive to IOH even with a IO price of $100/t.
In the meantime we have Bucklands as another major catalyst with a choice of partner in the next 2 months hopefully with it being a large steel or other IO player with deep pockets as noted in broker reports. Still, the market may still again heavily discount the SP against intrinsic value given the reluctance to buy speccys at this stage.
At the very least for long suffering SHs the light is burning brightly at the end of that proverbial tunnel, and any long positions in my mind gets signficantly derisked with every other deal that management has concluded brilliantly. Iron Valley production and an independent low marginal cost and capital cost mine to port solution eventually needs to get recognised even if the SP right now doesnt.
And lets not even get into valuations against peers on similar production scales.
IOH Price at posting:
$1.15 Sentiment: Buy Disclosure: Held
