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Strategies & Market Trends : Ride the Tiger with CD

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To: Goose94 who wrote (136110)	11/12/2008 12:08:34 PM
From: Goose94	Read Replies (1) of 313062

Baffinland Iron Mine (BIM-T) Net Cash of Approx. $120 Million ($0.80/share) - One of the Best Value Plays for 2008 Baffin is one of the companies we are tracking from our large list of Cash Rich Plays in our Vulture Fund. The value in the $0.30's is one of the best we have seen in a long time and a great speculation for 2009. www.baffinland.com Net Cash & Investments in the range of $120 million ($0.80/share) This is a cash rich iron ore play. It goes against the slowdown we're seeing in that industry right now, but their burn is controlled and even if they completely mothballed this property for a year, we have to consider that we're paying less than 1/2 for their cash in the bank and we get their giant ore deposit for "Free". Its the same logic we're following by purchasing discounted cash and getting big (proven) minerals or metals for nothing. You can easily make a case for the iron ore sector struggling but that doesn't change the fact a person is simply buying discounted money and paying nothing for the iron ore in the first place. Personally I will tuck it away for 12 to 18 months on hope a large steel company buys them out to secure long term supply. In theory someone could buy them out even for cash value (which is 100% higher than current prices) and inventory a massive deposit of rich iron ore (which they get for nothing). Even if you put it on care and maintenance for years, the purchasing company risks nothing. Its this type of scenario that makes companies like this a steal for smart speculators while others are taking tax losses or fretting about the future. ________________________________ Also check the company's news release issued on Nov 6th - it sheds light on the tremendous potential here and value of this iron ore on world markets. Baffin Property Overview - which the market currently values as worthless !! Mary River iron ore deposits (100% owned) located 160km south of Pond Inlet, Baffin Island (Nunavut). Studies show this deposit to be the highest grade, largest undeveloped iron ore project in the world that is independently owned. Iron Grade 64% - high grade and economic Proven & Probably Reserves - 365 million tonne Indicated - 52 million tonne Inferred - 448 million tonne Highlights from Oct 1st Presentation - Almost 75% of production is expected to be premium priced - Initial output would be 18 million tonnes per year with a 20 year mine life - Excellent proximity to port and European markets - Letters of intent from 5 major steel producers and interest from Mitsubishi for Asia - Seaborne iron ore supply is controlled by 3 majors (almost 80% of global supply) - Steel producers want to secure their own sources - long term outlook for iron ore prices remains strong - low strip ratio (low operating costs) - no processing required other than simple crushing and screening - existing 143km rail line to year round marine terminal - ice strengthened ore carriers can move ore to Europe - thousands of tonnes already shipped for testing to Europe - regional government and native groups fully support development Economics Pre-Tax NPV $18 Billion IRR of 20.5% with 3.7 year payback on $4 Billion capital cost Operating costs $14.62 per tonne Price Assumptions $67 U.S. per tonne Primary Risks: Capital costs in the range of $4 Billion Economic slowdown will impact iron ore prices for 2009 Iron Ore prices have fallen to $50 from well over $100 earlier this year Quick links on the right side of their website provides for excellent research

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