Fundamental GuyI know about your analysis of CAP and ROY. I used...

Fundamental Guy

I know about your analysis of CAP and ROY. I used to be shareholder of both and made good profits from them.

Unfortunately, market is extremely negative toward iron ore stocks esepcially magnetite iron ore explorers. It does NOT matter even if high margin like CAP. CAP's sp has completely COLLAPSED. If IO price does not recover, CAP's sp will be 10c soon and ROY will be 5c.

A few years ago I already predicted IO price will collapse, and my prediction was totally independent of Roger Montgomry and Jim Chino (hedge fund short again FMG).

http://www.abc.net.au/news/2012-09-19/how-do-you-invest-when-central-banks-are-printing/4270770

A bit about IO in later interview (first part of about totally unrelated stuff).

Too much IO, will anyone put several billions to start a brand new mine especially magnetite?

Most steel mills fund CAPEX in IO project by debt, so more and more debt. Actually, most of Chinese steel mills are almost bankrupted.

I'm a bit bearish on IO. Unfortunately, may be due to a few bad apples like CITIC Sino and Midwest, Australia has been labeled as extremely expensive to investment new mines.

IMHO I don't believe IO will get over $120/t for the long term average. I think long term average will be around $100/t.

So will Chinese steel mills (most of them almost bankrupted) borrow $2.7B at may be at 6% interest rate to invest in magnetite IO with spot price may be around $100/t (long-term)? If I got $2.7B cash in the bank (no debt), I woundn't invest in this CAPEX. $2.7B cash I would consider FMS instead (T/O $0.4B & CAPEX $1.1B, $1.2B in term deposit) if I'm interested in IO. Not cross-promotion, but just saying there are good projects just cannot get funding.