Metallum - MNE

[Lizard]

Have any of the resource investors out there had a look at MNE? Share price is languishing (probably because they look in need of capital) and market cap under $6m, despite having started some small scale operations in Chile for copper ore in the last quarter.

Their permits apparently relate to narrow vein mining of copper (possibly with gold credits), around historic mines (1800's) that operated with a cut off of around 9%. They now have licences to truck up to 5,000 tonnes of ore per month from two separate locations, although they are not geared up to that quantity yet and will have to stump up $US170k to pay up on the option to mine at the latest location announced today. Ore can be trucked to a couple of near by toll treatment plants. http://www.asx.com.au/asxpdf/20140827/pdf/42rs39m2qdsys1.pdf
http://www.asx.com.au/asxpdf/20141020/pdf/42t08ml6pxwffb.pdf

September quarterly will be interesting, as first indication of volumes actually being treated and payments received. However, given the lack of excitement in the share price, somehow I expect the results will be underwhelming. Having said that, some very high grades here, low market cap and potential to be at least partially self-funding in development, so seems like an interesting prospect.

Since I'm not normally much of a resource stock investor, I'd be interested in any thoughts from the more experienced! :cool:

[BFG]

I stumbled upon this accidentally today by typing MNE instead of MNW (morbid fascination of a bubble popping...). After putting some bucks into AVB and doing my research I had a quick look and thought it looked ok with the grades. Still hesitant though after watching NTL go nowhere with "boutique" mining. If capital is found then expect thr SP to rerate a bit, but not much.

[slimwin]

Yes, the market isn't a fan of mining juniors that need to find cash soon. AVB has a great story and some astute backers like blackrock and finance all but secured but will probably go nowhere till ore is being sold.

It's been like this for nearly two years and I can't see the market getting irrational on valuations soon.

[BFG]

Wild card is always drill results. GOR posted amazing gains during a gold downtrend. Ya never know!

[Lizard]

Market was a bit squeamish yesterday, so didn't pick up on the San Sebastian "purchase complete and 700t ready to truck" announcement yesterday. Gave me another chance to buy today, so I coat-tailed the interest at 1.2cps this morning and am christmas-wishing for it to at least hold ground here at 1.4cps.

Hoping that all this needs is some clean cash to get it some traction on the starter block.

[Lizard]

And finally, the long awaited permit for Paraguay. May be too late to make a real impression on cash in the December quarterly, but should be worth holding for March quarterly? Market will certainly be starting to feel a little more comfortable with prospects.

[BFG]

At least one copper company is keeping it's shareholders informed!

One key point I noticed was that tonnage per month should start around the 1900-2000 tonne mark. Nice grades as well.

[Sharp737]

Quarterly is out and tonnages are disappointing so far but grades good. If they can get the tonnages up, then good

[Lizard]

Interesting report http://metallum.com.au/images/announcements/Metallum_Copper-bottomed_certainty_February_11.pdf

Calculation appears fairly conservative in assumptions and arrives at a fair value of 6.6cps (currently 1.3cps). Although the one area they didn't seem too conservative about is the number of shares on issue. Assuming no further dilution may be somewhat optimistic.

[Lizard]

Okay, so I have averaged down at 0.8cps... prematurely, I suspect. They really need to start generating some cash and see off the vulture funding.

[percy]

Okay, so I have averaged down at 0.8cps... prematurely, I suspect. They really need to start generating some cash and see off the vulture funding.

It is a wonder you have any fingers left to type,after catching this falling knife.
Phaedrus would be giving you a good telling off.!

[Lizard]

It is a wonder you have any fingers left to type,after catching this falling knife.
Phaedrus would be giving you a good telling off.!

He would indeed! :cool:

[Lizard]

Another tranche of vulture funds converted at just 0.6cps. The risk beginning to escalate from here. The newsflow has suggested enough ore stockpiled to be able to be (at least temporarily) cashflow positive. Still another 3 tranches of $US100,000 per month that Bergen may keep converting though, unless MNE can repurchase.

Along with that, MNE suggesting they may look for some additional funding - which at these prices becomes very expensive for existing holders, unless it is used to repurchase the convertibles (no hint of that). Also maybe belies that "cashflow positive" is going to be anything more than marginal - and possibly followed by another negative quarter if they run down the stockpile this quarter.

Weighing up whether to throw in the towel on this one, but will probably stick with the gamble.

[Sharp737]

Another tranche of vulture funds converted at just 0.6cps. The risk beginning to escalate from here. The newsflow has suggested enough ore stockpiled to be able to be (at least temporarily) cashflow positive. Still another 3 tranches of $US100,000 per month that Bergen may keep converting though, unless MNE can repurchase.

Along with that, MNE suggesting they may look for some additional funding - which at these prices becomes very expensive for existing holders, unless it is used to repurchase the convertibles (no hint of that). Also maybe belies that "cashflow positive" is going to be anything more than marginal - and possibly followed by another negative quarter if they run down the stockpile this quarter.

Weighing up whether to throw in the towel on this one, but will probably stick with the gamble.


Well Lizard, it looks like a good capital raise to clear those convertible notes and really get things going. A very positive step I think, all going well!
And with the director converting his $250,000 loan to shares does bode well with his confidence in the project. It looks like there is life in this one after all!

[Lizard]

Yes, that was a good outcome - better than I'd expected. Bodes well, although expect cap raise overhang to provide plenty to go around for a month or two. :)