News: MGX Mount Gibson Iron announces 2016/17 financial year forecast, page-12

My two bob as follows:

1) No dividend is pathetic - with such a large stash of cash and $61 million in franking credits a 2 cent dividend should have been paid. Especially since the $86 million payout represents two years of profit. Its the least they could have done for long suffering shareholders.

2) Top of page 9 on the AR - the Koolan Island Logistics Base is on hold due to low oil price.

3) Top paragraph of page 16 on AR - Jim Beyer the CEO gets a payrise of his base salary from $500,000 to $670,000 plus LTI and STI from Mar 1 2016. This is disgraceful. Beyer should have been sacked for the KI wall collapsing and now the tool is getting a 34% payrise - for what - rolling over a term deposit. In the last two years these muppets have missed the gold boom and to a lesser extent the value in zinc. Thankfully they haven't fallen for the Lithum boom. No matter how you look at it management has done nothing and yet they're paid massive salaries.

4) No where in the presentation does the company state that the Koolan Island ore is of premium quality. What this means is that the ore sold will receive a premium not a discount to prevailing spot price index - this is very important as it would potentially indicate that KI would be in the top quartile or thereabouts for price and such would be profitable in a low price environment. KI isn't going to be a marginal project - subject to safety conditons of course. I think this should be highlighted as it indicates the MGX should be valued at more then cash backing due to the potential value. If KI could generate a profit of $30 per tonne on 15 million tonnes that's a return of $450 million dollars less the capex of fixing the wall. KI was previously forecast to produce 28 millions tonnes so I've assumed that just over half of that could still be recovered.

5) The company still has value as a takeover due to the large cash pile and franking credits. Given that most companies need to issue shares a discount it could actually be cheaper for a company especially a mining company to pick up the cash, franking credits, mining equipment and a potential mine as a way of raising capital - this could be especially so if they got rid of the overpaid board and management.

GLTA/IMHO