Picture this. Most of the Pilbara is made of banded iron formation, which if you grind it fine enough and hit it with strong enough magnets you can extract magnetite. Little bits of the Pilbara ar enriched to form hematite or goethite which are the DSO ores, and little bits of these are eroded and redeposited to form detrital ores.
Now, if magnetite was such a great product where's the first place you'd mine it ? On the coast, in the Pilbara, where the banded iron formations outcrop at the seaside. One such operation is CITC Pacific's Cape Preston that will never make money and never pay its debt to the Chinese government. But that's it, noone else can develop an operation despite the abundance of ore. If magnetite production ever starts seriously in Australia it will be a bit like eating a cookie from the edge, starting a Karratha and heading south.
So, if you can't make it pay in the Pilbara, how is PDY going to make it pay 600km in land with no water, power, or infrastructure ?
Answer = $6.5 billion from Superkite, problem solved.
PDY Price at posting:
0.4¢ Sentiment: None Disclosure: Not Held
