Hey Tele,

Very interesting exercise indeed!

From the macro-economic point of view, even for the lowest number (1% of in-situ rather than 2%) the SP would be $56/s for selling our ore as Ferro Titanium. Separating the TiO2 and other stuff out would fetch $78/s which is about 40% more. However, even the minium number of $56/s (assuming 1% of in-situ) is mind boggling.

The gross above ground values of the two scenarios are $8.5 B and $6.2 B assuming 1%. The difference is about $2B. Would it be simpler to sell the ore as Ferro Titanium rather than going through all the troubles to separate them further to get the extra $2 B?

The troubles would include, just off the top of my head, the followings.

- smaller financing requirement for getting Ferro Titanium. The capex for iron ore mining and processing is large, and if a couple of $B can be shaved off the price tag then financing would be easier.

- simpler operations (less headache)

- simpler tailings to deal with.

A simple strategy would be just to dig up the stuff, do enough processing to produce Ferro Titanium and sell the stuff to off-shore customers. Since there is so much stuff at Magpie (and we are only talking about deposit #2 only) there would be no need to do any further exploration to increase the deposit size, and effort should be devoted to the simplest. cheapest and fastest schemes to get to production.

As indicated $56/s is huge compare to the current SP at $0.20. Even half of $56/s, or a nice round number of $10/s, (I am getting cheaper and cheaper) would make quite a few of us millionnaires!

$5 a share, anyone?

goldhunter