Curiouser and CuriouserIts both interesting and frustrating that even a 65% increase in the price recently negotiated by Vale with Japan for supply of iron ore hasn't put Northlands on investor, investment house or financial media radar screens. What's also frustrating is the lack of interest in Northlands realtive to, for instance, Baffinland.
Baffinland was featured in today's Globe. Baffinland's strongest proposition is that it is reputed to be one of the world's largest remaining iron ore deposits combined with the fact that it is very high grade ore (65% Fe), is strip-mineable and it requires little processing other than crushing and sorting. That's the good news.
The bad news is that Baffinland will require an enormous investment in infrastructure including 145 KM of rail lines over the permafrost, ice-free ports and water transportation will require ships with ice-resistent hulls. All in all, an investment of 4.1 Billion is estimated to bring Baffinland into production, sometime in 2014.
On the other hand Northlands is well on its way to confirming almost as much iron ore, port infrastructure exists, only 15 KM of rail lines are required for any of their three sites and Northlands operates in Europe's backyard (Europe being Baffinland's primary target market). Furthermore, Northands estimates roughly 1/4 or $1 billion in costs to production and a start date of 4th quarter 2009. While a lower grade of ore, Northlands can also be strip mined, close to the surface and initial peletizing tests have resulted in a very high grade result using an economical process.
Whereas Baffinland is up, and trading now at 20% below its 52 week high, Northlands is down, and trading at slightly more than 50% of its 52 week high. What's wrong with this picture?