The next FMG like stock?, page-33

completely different market to when fmg was minted - that was the start of the biggest commodity boom in living memory

ill say it again - comparing akm to fmg as a chart/sp forecast is simplistic and inaccurate in extreme

akm's in almost completely contrarian waters - a 'hated' commodity, in a part of the world most aussie investors are completely unfamiliar with, during a time of regular shocks/2nd guessing of confidence in global trade

what does that mean - you wont be likely to get fomo until the thing is proven/built

whereas fmg and all the other iron ore and coal plays generally ran with spot price rises back in 2002-2010 - ie investors would speculate on future value almost unconstrained fashion

akm will more than likely always be relatively underpriced until its delivers news confirming a big step shift

eg AKM's gotten almost zero upside from the coking coal spot price

by comparison if it was 2006-7 or 2009-11 AKM would be valued at $600M+ mkt cap atm purely on the coal project look through alone.

Riversdale's 1Bt stranded coking coal project was bought by rio for $3.9b despite no roal or river transport and being +1500km from port

and its precisely because RIO ultimately sold it for $us50m - nice one Tom - that the market is zealously conservative about how its pricing AKM atm

AKM's far more advanced than Riversdale was though with a smaller coal project. they were spitballing riversdale's might do 15-25Mtpa for 30+ years

but its not the NPV at issue for AKM - which I;d estimate to be between $4-7bn on a 34% free carry on rail and 15mtpa combined nurstei ovoot complex

its that its highly unlikely to see FOMO until finance is approved for the rail and AKM's 34% ownership of rail is confirmed.

at which point then fomo will kick in

so - as a chart - it will likely act verra verra differently to FMG

i doubt it will ever get the premiums FMG and other first movers in 2002-6 got - its just not likely there'll ever be the same 'gold rush' sentiment for coal and iron ore again in our lifettimes - even if the spot price actually goes higher

there just isnt the same zeitgeist of bullishness around china 8+% gdp growth forever etc and all the other factors that bring in the big slabs of stupid money

but then thats what makes it such a potentially sneaky rip roarer - precisely because its threatening to deliver massive value that 99% of the investment market will overlook