The numbers are very, very big at around $120 FOB and a 5%...

The numbers are very, very big at around $120 FOB and a 5% royalty. The deal could potentially be worth about $1.35 billion income at those levels.

This deal is effectively a punt on the iron ore price in 3-5 years time. If the price remains strong or actually increases, it will pay off massively for IOH.

It is broadly accepted that new supply of iron ore will gradually enter the market 2013-2015, but it is also suggested that demand may increase over the same time frame. Anyone invested in FMG seen their price projections for DMT unit of Fe?

Hopefully once the MOU becomes a signed legal contract, the full royalty rates will be released & this will trigger some serious number crunching amongst the brokers. Anyone bullish on iron ore will be rushing into IOH if my calculations are anywhere near correct.