Pat,Your numbers are roughly correct, no mistake.The problem is,...

Pat,

Your numbers are roughly correct, no mistake.

The problem is, if the iron ore price is below $90 p/t then the IOH resource inventory is mostly worthless because it costs about that much to pull it out of the ground.

Analysts are estimating that FMG are running at about $9 p/t profit with a $90 iron ore price. Only RIO, BHP & FMG can make money at current Fe prices and if prices drop to $80 or lower even the big three will be forced to cut costs, sack workers & attempt to sell off non-core assets (as BHP has just done by selling a Uranium resource) in order to protect their profitability.

Hold onto your hat because if the iron ore spot price drops to $80 or even $70 I think IOH will trade below cash backing as the market will attribute zero value to our resources and that $100 million won't last forever.

Worst case scenario is that a big player (e.g. RIO) uses this downturn to launch a buy-out for (say) $1.70 and it gets up because many holders would prefer a bird in the hand.