News

September 02, 2008

Investors Who Haven’t Done The Numbers On Giralia Resources’ Iron Ore Properties Might Be Missing A Trick

Charles Wyatt

No doubt about it, Giralia Resources is one of the most fascinating companies operating in Australia. Not only does it have five wholly owned iron ore projects, three of which are high grade hematite and close to infrastructure, but it is also involved in the Lake Frome joint venture which adjoins the Beverley uranium mine in South Australia, and has a gold and a nickel sulphide project to boot. Iron ore is top of the pops at the moment and it has been suggested that the price of iron ore may go even higher if BHP Billiton succeeds in taking over Rio Tinto. It’s also been suggested that uranium is due for another run after fading from the limelight over the past year. In addition to all this Giralia has A$76 million in the kitty as well as a portfolio of shareholdings in six listed companies which it has spun off, worth A$9 million even in today’s bear market.

And, if you stand the cash and the quoted investments alongside Giralia’s A$202.5 million market capitalisation, a short reckoning up reveals that the market is is valuing all the iron ore projects, plus Lake Frome and the two other projects at just A$117.5 million. Something is clearly out of kilter. It may be that Giralia dazzles investors with its plethora of projects. One way of avoiding that dazzle is to focus in on the projects that are likely to make a material difference to the company...