The main question is around whether the value of MAC is...

The main question is around whether the value of MAC is recognised in the SP.

The MAC royalty and income stream are clearly described in the accounts and in every ILU presentation. Any cursory examination of the business would identify it.

Even Morningstar can see MAC: "An iron ore royalty over BHP's Mining Area C comprises about 10% of our fair value estimate, but cash flows are relatively stable and requires no capital investment."


South Flank will likely be BHP's next io project, raising MAC's profits and cap value, to the great benefit of ILU holders. The royalty has delivered great financial flexibility to ILU as it grows the mineral sands business.

If ILU was presented with a glittering opportunity like eg. buying Rio's mineral sand business, cashing MAC in might make sense.

But to separate it just so holders have two pieces of paper or to pay down debt - I shrug my shoulders. Why?

ILU is generating a lot of cash as it winds off the $700m stockpile of Zircon. It isn't digging up much HMC in Australia.

While it has ambitious capex planned for Sierra and new Australian Rutile mines, I expect operations to more than meet debt obligations in the medium term.

Leave it alone.

Ash