ROY has all the infrastructures, possibly get to 1 bt soon, PFS...

ROY has all the infrastructures, possibly get to 1 bt soon, PFS completing soon & cashed up.

MMX with $300m cash, no project to start in the near future. Their Mid-west project (sold) won't start till 2015-17, very lucky they got $300m for 50% of their share of project. MMX needs a project that is:

1) Has infrastructures... so no more dangerous no infrastructure issues; Pilbra big players may not share railways & ports
2) Good large tonnages already identified otherwise will take too many years to explore
3) Some studies done already eg PFS
4) Massive future exploration upsides 4-8 Bt

ROY seems perfect fit... early start-up (possibly 2013), big tonnage (1+ Bt), infrastructures.

If MMX offers all-script takeover (to conserve cash), straightaway they can accelerate ROY's projects to get to 4.8Bt without any capital raising nor placement.

With $320m ($300m MMX, $20m ROY) it will generate about $16m pa of bank interest to fund explorations & admins, so will only use up interest not the capital (conserve $320m cash).

Once feasibility study completed, CAPEX might be around $1.7-$2B... Funding from:

1) $320m from cash
2) $1 B from capital raising (will be a lot of share holders MMX+ROY)
3) Rest $400m from JV partner, bank debt ($0.4B/$1.7B = 23.5% gearing ratio) or corporate bonds

This way less reliance on foreign funding & keep project in Australia.