$20m a year in the Profit and Loss include $13m in exploration...

$20m a year in the Profit and Loss include $13m in exploration costs- you cant say that $20m is therefore directed at admin costs and lining the pockets of management.

With $130m in the bank at interest at 6% gives you $8m- covers salaries and admin costs.

Take your point that we dont know when production starts- in my NPV calc ive assumed no mine for two years. Extend that out and obviously it impacts the NPV calc- the point being though that you discount the cashflow to take into account the time value of money so the valuation builds in the delay. And the NPV calc does value the year on year revenue stream, i.e. the value of that future revenue stream now. Not sure how else you value the deal.

Also take your point re the uncertainty of not knowing the royalty sliding scale which critcally impacts the valuation obviously as I pointed in my oringial post. But Im with Plucker in that perhaps the market is more focused on the possibility of FMG not exercising the option.

IOH seemed confident though and point to the $25m non-refundable option fee from FMG, Im sure even a company of FMG's size wouldnt throw that kind of money around willy nilly. FMG have also stated that the broader deposit is critical to their growth plans.

In any case, at current market cap, and applying a conservative valuation anything under $2 is IMHO a steal. So if I was a buy on IOH before the FMG deal, then Im more of a buy after it. Despite all the uncertainites we have before us in my mind this is already built into the current price, and I can see significantly more upside than downside.

Good luck all holders in any case.