Check out the Iron Ore Industry Market report that Deutsche Bank put out on October 24th: http://pull.db-gmresearch.com/p/1621-3B5D/2316053/0900b8c08717f4b6.pdf.
“The market’s use of cost curves to determine price pressure points in an oversupplied market in base metals has been erroneously transferred to iron ore. We have created a cash charge curve that normalises each iron ore product in the industry relative to the spot reference price. This shows support for the iron ore price at US$112/t despite 375Mtpa of new capacity entering the market over the next 3 years.”
Seemingly too low iron ore consensus prices are leading to dramtically low valuations. Most analysts have been using long term prices between $75/t and $95/t. The Deutsche Bank report is full of insight and analysis as to why much higher iron ore prices could be justified. The price that they use is almost dead on with Alderon’s Bankable Feasibility Study that was published December 2012, which has a $3.24B NPV8 for the Kami Iron Ore Project and uses a medium (Year 2015 to 2020) and long-term (beyond Year 2020) price of $115/t and $110/t respectively; prices that are now being seen as wholly realistic.
Alderon remains the lowest risk iron ore developer in the Labrador Trough. The company recently announced the successful completion of the Provincial Environmental Assessment process and have now advanced to the final stages of the Federal EA process. In the meantime, the company is taking steps to arrange a billion dollar financing with the lead arranger, BNP Paribas, as well as advancing engineering, working on infrastructure agreements, and working to secure a second off-take partner.