I posted the following message on CAP web site. Similar comments...

I posted the following message on CAP web site. Similar comments applies to Roy apart from according to the quarterly report they have already slashed their exploration cost to $10,000 total for next quarter and have savage the admin costs.


Well done

My post to CAP is repeated below


"Why would any company keep on spending money on a low grade Iron Ore Project where the CAPEX is $billions (which CAP does not have) and where the price of iron ore is now $62 pt and falling.

The Australian dollar has declined as an offset to falling prices but for how long will that last when $billions in LNG exports start coming in from those new facilities in QLD.

Company's in the iron ore business are falling over every other day.

CAP should be selling anything they can, relinquishing leases that are not essential so as to to save costs, sell leases to others if somebody wants to buy them, dismiss all staff and get the admin costs down to close to nothing and bunker down for the next boom which will not be for another 15-20 years.

Hawsons is a marginal project. It is very low grade and the ore body is at least 50 meters below the surface. It needs a lot of water to operate which it does not have without a desalination plant (a hell of a lot more money). Being 50 meters below the surface means somebody has to pay to scrap off the first 50 meters before any ore can be mined.

That will cost $200m before any money is earned. Who is going to front up and pay for this expense together with the other production costs in today's market?

Nobody"


My additional comment are directed at Roy

Why should Roy agree to buy or vend in any more iron ore assets held by Braemar Iron when those assets have had very limited exploration and are now worth next to nothing in today's market.

If the proposed merger was to include the chairman's Olary Magnetite assets and leases that company owes (which is outstanding since July last year) in excess of $2.5 million to Helix Resources Limited.


If an investor had the money available you could probably buy any one of Arrium, Atlas, BC iron etc right now for a couple hundred million. Those companies are already in production so any development for Royal is not going to happen for years.

The proposed merger of assets is unnecessary and would be counter productive as these leases have expenditure liabilities. Royal does not need any additional costs or liabilities at this time.