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Let me try a couple of ways to provide a rough estimates to see if they provide consistent results with others. Since I have not "play around" much with iron ore, except indirectly with the FNC 17%CHM, feel free to add, correct my assumptions.

1. From total deposit: 1B tonnes of iron ore in the ground x 17.5% = 175 M t Fe ore for FNC x apprx 30% grade = 52.5 M t Fe (make this 50 M t Fe)

50 M t Fe (in-the-ground) x $200/t (above ground price) x f (factor) = $10 B x f

Above ground values $100 M, $500, 1.B for f = 1%, 5%, 10% respectively

An assumed factor of 5% would give $0.5B share for FNC . Note: The result here is of the same order of magnitude of $388M NPV stated by FNC in today’s NR (3 Oct 2011) for the old estimate of 388 M tonnes @28.9%, and something like $0.75 B using the latest results of 1.06 B tonnes @28.9%).

A $0.5B deposit for 25 years would give $20 M/year, or $10 M/yr to be conservative allowing for various expenditures and contigencies for FNC 17.5%

2. From mill capacity: 20Mt of ore at 30% Fe/yr and 17% share:

20 Mt/yr x 30% x 17.5% x $100/t = $105 M/yr (This number seems too high…a reduction factor of 10 would be required to bring it down to the $10M/yr level ).

3. Royalty (1.5% NSR): 20 Mt/yr 0.30 x 1.5% = 0.09Mt/yr x $100/t = $90 M/yr for FNC (Again this number seems too high…same reduction factor of about 10 required to bring it down to $10M/yr level, ...see Rago1 estimate of $15M/yr).

If the two components 17.5% share and 1.5% royalty are added together then the end result is quite a sum for FNC compared to the current market value of $13M.

If the above math is OK then there is something very very strange about FNC market value...

goldhunter