Been on since IPO Now 04 this little Nickel baby is now flying hit .58c high today from a .365c a few days ago a 60% increase ASX speeding ticket issued today
cheers laurie
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Been on since IPO Now 04 this little Nickel baby is now flying hit .58c high today from a .365c a few days ago a 60% increase ASX speeding ticket issued today
cheers laurie
MLM - Gold Coast Presentation
http://www.stocknessmonster.com/news...E=ASX&N=221325
Market Cap $25.8m (117.3m x $0.23)
Cash @ 31/3/10 = $8.8m
Enterprise Value = $15m
Own 100%* of 6 greenfield projects, including:
Nornico - Nickel/Cobalt project
Greenvale - Nickel/Cobalt project
Lucky Break - Nickel
Kokomo (80%) - Scandium project
Ootann - Limestone project
Weipa - Zircon/Rutile project
Listed Investments:
MTE - 56% = $17.8m (Coal)
CBX - 30% = $14.4m (Bauxite)
PMQ - 76% = $4.1m (Tungsten, Moly, Copper/Gold)
ORM - 34% = $1.0m (Gold, Rare Earths)
Total Listed Investments = $37.3m
Investments $37.3m + Cash $8.8m = Total Assets $46.1m ( or $0.39 per share) v Market Cap $25.8m = ~44% discount to NTA
Current share price $0.24
Disc: Nil, but on close watch
This post from the Age 2 mnths ago is quite interesting (particularly the ties to China at the end):
I see MLM has rallied 20% in the last 5 days, could've found this one a week ago shasta! Just kidding, nice find :)Quote:
More to Metallica than heavy metal
BARRY FITZGERALD
April 28, 2010 - 10:05AM
Garimpeiro confesses to long believing that Queensland's one-stop shop in the minerals game, Metallica Minerals, was named in honour of Metallica, the ageing US heavy metal rock band responsible for the sale of more black T-shirts than AC/DC.
But he has been set straight. The company's name comes from "De re metallica," (On the nature of metals), written by the "father of mineralogy," Georg Bauer in Chemnitz , on the northern foothills of eastern Germany's Erzgebirge (ore mountain) in 1556.
A young mining engineer who went on to become president of the US, Herbert Hoover, and his geologist wife, Lou Henry Hoover, did the English speaking world a favour by translating De re metallica in 1912. That was some 14 years after Herbert spent some time in Western Australia as mine manager at the Sons of Gwalia gold mine.
That's the end of the history lesson. Garimpeiro's interest today is in the massive discount to asset value currently on offer in Metallica's share price. As mentioned above, Metallica is something of a one-stop shop for punters in the mining sector, albeit within the confines of Queensland's borders.
Its direct and indirect mining interests in the state stretch from Weipa (bauxite) in the far north to the Surat Basin (coal) in the south. In between there are nickel/cobalt, tungsten/molybdenum and copper/gold interests, much of it through listed investments.
At last count Metallica's listed interests included 56 per cent of MetroCoal (MTE), 29.9 per cent of Cape Alumina (CBX), 76 per cent of Planet Metals (PMQ) and 47 per cent of Orion Metals (ORM). On yesterday's closing prices, the portfolio was worth $52.3 million.
The two big chunks in that are MetroCoal ($28 million) and Cape Alumina ($19.2 million). Both were floated off by Metallica last year. MetroCoal has already attracted the attention of Chinese interests through a big-spending exploration joint venture. Cape Alumina has environmental opposition to overcome but is of serious to the Chinese, given the superior quality of Weipa bauxite compared with their own stuff.
Add Metallica's $8.8 million cash to its portfolio of listed investments and you get a total value for the listed interests and cash of $61.1 million. That is more than double the group's market capitalisation of $30.1 million based on its last closing price of 26.5 cents a share (and after adjusting for the pending share buyback-transfer agreement in CBX with Resource Capital Funds).
But wait, there's more. Not steak knives, but full ownership of the group's flagship project, the Norninco nickel/cobalt/scandium project northwest of Townsville. It now includes the old Greenvale laterite nickel deposits which come with a handy remnant ore position of 38 million tonnes grading 0.8 per cent nickel and associated cobalt.
Greenvale itself was mined between by Freeport and others between 1974-1992 and has the distinction of being Australia's highest grade laterite nickel project to date, with grades of more than 1.5 per cent nickel. But it was a huge loss maker for much of its history. But wrap it in with Metallica's broader interests in the Greenvale nickel belt, and Metallica's ambitions for Norninco start to look interesting.
The return of well-above historical average nickel prices is not going hurt the ambitions either. A staged development is on the cards, with initial annual production of 2900 tonnes of contained nickel and 200 tonnes of high-value the cobalt the likely starting point.
That assumes that Metallica goes it alone. The entry of a big brother already in the nickel game to move things along and on a larger scale is a real possibility. On that score, it is worth noting that an associate of China's Jilin HOROC Nonferrous Metal Group is Metallica's biggest shareholder at 18.8 per cent of the company. Not very imaginative with company names the Chinese.
MLM has sent in an amended presentation & dropped 2c to 22c today.
http://www.stocknessmonster.com/news...E=ASX&N=221353
Page 19 has a slight correction (save you trainspotters some time!)
NTA (Listed Investments + Cash as per spreadsheet) = $0.39
I'll keep updating the discount of the share price to NTA, like i did with SRL, eventually the market caught up & SRL doubled!
Lets hope MLM does the same, technically it's still in a downtrend
MLM's 56% owned stake in MTE reported a 500% increase in Bundi Coal Resource (58mt to 292mt)
Market really hasnt taken this in, not a big rise in MTE or MLM!
http://www.stocknessmonster.com/news...E=ASX&N=221451
MLM's 76% owned stake in PMQ reported a HoA to sell the Wolfram Camp Project (Tungsten) for $8m
http://www.stocknessmonster.com/news...E=ASX&N=221457
MLM share price $0.235
NTA = $0.42
Discount to NTA = 45%
Friday's update
MLM share price $0.23
NTA = $0.40
Discount to NTA = 42%
IMO the disconnect between the SP & NTA must be due to the 30% holding in ASX:CBX (worth ~$15.4m @ $0.40)
The Queensland Govt has some serious environmental concerns on CBX's large Bauxite project, which is on hold pending appeals.
For now the upside is largely with MLM's 100% owned Nickel/Cobalt project (Nornico), & it's 56% (~$20m) holding in ASX:MTE (a coal company)
AA
Just think its so far off the radar & with little liquidity, eventually these plays get "noticed" & the discount evaporates
Friday's update
MLM - share price $0.225
NTA = $0.40
Discount to NTA = 43%
Remember i tracked SRL when it was under $1, doing the same as this & it eventually restructured itself to unlock the value & it doubled!
Disc: Nil
Gee thanks, how kind
On my various ASX watchlists i follow at least 100 stocks at a time, over different sectors & i replace them with better stocks that i uncover.
Those that have had a strong run, or the fundamentals have changed from when i first found them get culled.
Always looking for value, but as im out of the market (due to personal circumstances) im still following stocks closely for when im back in.
MLM - Friday's Update
MTE - Ann re Chinese $30m investment (56% owned by MLM)
http://www.stocknessmonster.com/news...E=ASX&N=222141
MLM share price $0.225
NTA = $0.39
Discount to NTA = 43%
MLM - Lucknow Ni-Co-Scandium drill results
http://www.stocknessmonster.com/news...E=ASX&N=222215
16 pages, on one of MLM's projects in there own right, MLM isn't just an LIC!
MTE - Surat Coal Drilling Project (MLM own 56%)
http://www.stocknessmonster.com/news...E=ASX&N=222376
China Coal Extension Granted
http://www.stocknessmonster.com/news...E=ASX&N=222378
ORM - Exploration Activity Update (MLM owns 34%)
http://www.stocknessmonster.com/news...E=ASX&N=222415
Very much a greenfields explorer, focusiing on cooper, gold & rare earths
MLM - June Quarterly Activities & Cashflow Report
http://www.stocknessmonster.com/news...E=ASX&N=222506
Quite a long report as it contains all the activities of there listed investments (MTE, CBX, PMQ, ORM)
MLM share price = $0.23
NTA @ 30/7/10 = $0.36
Discount to NTA = 37%
Will update the MLM's NTA figures after close of play tonight
MTE - Takes option to invest in Indonesian Coal projects
http://www.stocknessmonster.com/news...E=ASX&N=223226
Remember the chinese have pumped $30m into MTE & they have some prime real estate in the surat basin (the CSG hot spot)
MLM share price = $0.255
NTA = $0.38
Discount to NTA = 33%
MLM's market cap @ $0.255 = $31.9m
So for $31.9m you get:
Cash Est @ 31/8/10 = $5.5m*
Listed Investments:
MTE $23.6m (@ $0.295)
CBX $12.7m (@ $0.33)
PMQ $4.8m (@ $0105)
ORM $0.8m (@ $0.047)
Total LI = $41.9m
* Cash @ 30/6 was $7.1m (Less: Est Sept Qtr Exploration & Development costs $1.95m, + Admin expenses $0.45m = $2.4m x 2/3)
Plus all of MLM's own projects that have NO value attributed to them!
The MetaStock TA software that I use provides well over a hundred technical indicators. On top of that I have created many indicators of my own - but who needs 'em? Here we have a chart utilising nothing more than the Closing price and a simple Volume indicator. Judge for yourself how effective these have been in providing MLM trading signals.
Over the 20 month period covered by this chart, the OBV volume indicator has triggered just one sell signal and just one buy signal. Volume changes are supposed to precede price changes, so the OBV should be a leading indicator, providing signals ahead of those derived from price action. That is exactly what happened here with each OBV signal being followed within a few days by price action breaking through an established confirmed trendline. The Red arrow marks the trendline-break Sell signal and the green arrow marks the trendline break Buy signal.
Following the Buy signals, MLM went into a "medium-term" (3 month) uptrend. There is a confirmed trendline in place.
http://i602.photobucket.com/albums/t...sPB/MLM828.gif
In an attempt to temper Shasta's enthusiasm for this stock, it is important to realise that MLM is still in a "longterm" (15 month) downtrend and that the "longterm" trendline is still unbroken.
Well, I liked the look of the above graph, so bought into MLM at 25.5 on 29th...and the uptred continues as it rolls through 29...and by my careful TA calculations...the long term downtrend is broken...
So the question is: Will OBV signal be enough to tell me when to get out? Or perhaps...will it be the first to tell me to get out?
MLM - 76% owned PMQ - sale of Wolfram Camp Tungsten Project (85% interest)
http://www.stocknessmonster.com/news...E=ASX&N=223640
The total sale price of $8m is more than PMQ's current market cap, but it was there key project.
MLM should really acquire the balance of PMQ they don't hold & use the cash to develop there other projects
Thanks Very Much for that Shasta...I was wondering why there was such interest today....will that 30c resistance get broken or not...it's been tested all day and a few times in the last 6 months...
MLM - 34% owned ORM project acquistion
http://www.asx.com.au/asxpdf/2010090...2m9365l2jj.pdf
HREE, Gold & Uranium (close to NTU's HREE project)
ORM share price up +6.5c today to 15c (+76.47%)
MLM - 56% owned MTE - China Coal receives final approval (for $30m investment)
http://www.stocknessmonster.com/news...E=ASX&N=223847
pS. Check the Surat Basin map, this is right among the CSG highway!
MLM - 56% owned MTE
http://www.stocknessmonster.com/news...E=ASX&N=223920
Bank of America have increased there stake to 11.1%
MLM - Nornico Scoping Study Summary
http://www.stocknessmonster.com/news...E=ASX&N=224037
MLM's 100% owned flagship project (which the market is attributing NO VALUE to it)
Production anticipated for 2013, with a 10 year LoM, for 2,700T Ni, 160T Co, 7,500kg Sc (Sc = Scandium) = Annual Revenue/Operating cashflow ~ $A45m
Ni cash costs of <$US3/lb when including cobalt & scandium credits
MLM - Media Release
http://www.stocknessmonster.com/news...E=ASX&N=224040
MLM - Presentation Excellence Mining & Exploration
http://www.stocknessmonster.com/news...E=ASX&N=224042
A great read on why MLM is so undervalued!
MLM's 56% owned MTE
MTE - China Coal JV Underway (CCIEC to invest $30m into MTE)
http://www.stocknessmonster.com/news...E=ASX&N=224615
MLM provides an undervalued indirect interest into MTE, which is MLM's largest asset in value
MTE have around 141m shares on issue the 80m that MLM own are held in escrow. (I see Trading Room incorrectly shows 61m shares)
MLM's 80m shares are worth $27.2m, so MTE's market cap is ~$48m, but the $30m injected makes it interesting
I've tried to simplify & spell out the discount to NTA! (i update a spreadsheet when i remember)
I gave up with DGR, if you go thru that thread & the presentation, as they have holdings on other exchanges the listed investments are worth more than 3 times the market cap!
Yep, thanks for doing that Shasta, I for one appreciate it and have been following the thread quite closely.
I see ORM has gone from 5c to just under 30c in a month, on the back of the REE boom.
MLM - Annual Report to Shareholders
http://www.stocknessmonster.com/news...E=ASX&N=224821
A good read, not just for background on there listed investments, but about Nornico in particular, there flagship project 4 Nickel, Cobalt & Scandium
MTE - (56% owned by MLM) Presentation to the Coal Exploration Conference
http://www.stocknessmonster.com/news...E=ASX&N=224829
MTE has alot of acreage in the Surat Basin, the home of many CSG companies
Page 7 highlights some linkage to Arrow Energy, Pages 18 & 19 relate to MTE's interest in UCG
MLM reminds a bit me of SRL, for ages i posted about the disconnect between its share price & NTA, & eventually the market caught on, after SRL had a "strategic review" to unlock value.
MTE is MLM's biggest investment & the Chinese are putting in $30m to fast track there projects in the Surat Basin.
MLM's investment in CBX is largely on hold, as the Qld Govt has environmental concerns over the project.
PMQ has sold off a project for more than its market cap, & ORM has has a massive run up over the last month due to the REE excitement & there drill results.
That said MLM stacks up fundamentally, even though its not overly liquid, & i guess the TA doesn't stack up.
I'll keep the thread up to date, as im doing with DGR, as the discount won't last forever!
Both ORM & MTE have had trading halts today
Capital raisings for both, MLM should be supportive of these, especially with ORM's share price performance over the last month
Hi Shasta.
This one has been on the rise since July but todays action may get some attention.
I had a position at 29.5 and took another one today. Seems to me the market had woken up.
Also, the discount to NTA does not include potential upside of MLM flagship projects.
Absolutely right Soulman.
MLM's flagship project Nornico (Nickel, Cobalt & Scandium) could support its current market cap, without any of there listed investments!
I'm picking they will spin this project out to fund it into development/production (the same model as DGR uses)
Definitely MLM is in the prime position to take advantage of the strong demand for resources stocks. The market has awoken to MLM and maybe the presentation to the Perth mining community on the 13th Oct that does the trick as well as TA.
MLM - 56% owned MTE - 30% increase in Bundi Coal Resource to 381mt
http://www.stocknessmonster.com/news...E=ASX&N=225059
Page 2 highlights there underground thermal coal & UCG resources
With a Chinese company to put $30m into MTE, there resource upgrades should keep increasing as they step up the drilling, providing plenty of positive news for MTE for the rest of the year.
When my computer died i lost my MLM & DGR spreadsheets with all there listed investments updated, good to see MLM have been pro active & sent to the market an analysis that shows there listed investments are worth far more than its market cap (not to mention MLM's own 100% owned projects!)
http://stocknessmonster.com/news-ite...E=ASX&N=226151
Disc: Nil
Hi shasta,
I have been having so much fun with SRZ, that I sold my TPI and brought a few MLM at 33 cents and DGR at 14 cents today.I would hate to admit to how much money the TPI have cost me.
Just been lazy not selling them a long time ago.
I hope you do well especially with DGR, there's 4 or 5 spin offs coming in the next few months & DGR shareholders get priority entitlements.
I'd like DGR to unlock some further value for shareholders by retaining say a 20% stake in the spin offs, & giving half there shares as part of an in-specie distribution to DGR shareholders, that would create more interest in DGR in the lead up to future announcements.
MLM's 56% owned MTE
http://stocknessmonster.com/news-ite...E=ASX&N=226236
Great permits in the Surat basin next to Xstrata, with map showing Linc & Cougar Energy's UCG permits nearby.
MTE is the main driver of the MLM share price, & well funded with the $30m injection from the chinese
MLM's 56% owned MTE (Metrocoal)
Metrocoal signs WICET Feasibility funding deed
http://stocknessmonster.com/news-ite...E=ASX&N=226574
MTE has great acreage in the Surat basin for both coal & UCG/CSG potential
Carbon Energy, Linc Energy, New Hope & Xstrata all have permits near to or adjoining MTE's, surely only a matter of time before a bigger company comes along.
MLM - 56% owned MTE - Drilling Commenced on Columboola Poal Project
http://stocknessmonster.com/news-ite...E=ASX&N=226999
MTE has 2 clear objectives:
1. Thermal coal from underground or open cut mining
2. UCG - to turn gas into a clean liquid fuel
MLM - 100% owned Nornico Ni-Cu-Scandium project, drilling results & update
http://stocknessmonster.com/news-ite...E=ASX&N=227175
This is there flagship project, & maybe be spun out to self fund its drilling (like DGR does)
MLM - More news on there flagship project "Nornico" (Nickel, Cobalt, Scandium)
http://stocknessmonster.com/news-ite...E=ASX&N=228298
Production anticipated in 2013, with JORC resource of 83,000T Nickel & 6,400T Cobalt + Scandium
MLM - MTE signs drilling contract for Surat Basin Coal project
http://stocknessmonster.com/news-ite...E=ASX&N=228867
Remember this project has a dual focus, on thermal coal & UCG
Hi Shasta
I'll post my reply here, rather than on the HUN thread.
When your talking about the Surat basin, you're pretty much talking thermal coal. The higher margin coking coals tend to be found further north, in the Bowen Basin.
Certainly a large exploration target, 'down dip' of some well known deposits. I presume that this really means that these dipping seams are only now becoming increasingly attractive due to higher coal prices. Speaking in general terms, you are looking at mining lower priced thermal coal (relative to coking coal) in an underground operation (generally higher cost), and a fair distance from port (Gladstone).
I also presume they intend to make use of the ' Southern Missing Link' to get their coal to Gladstone. This has yet to be built. There is a small coal terminal at the Port of Brisbane (Qld Bulk Handling), which is wholly owned by New Hope. I believe New Hope allow third party access, but doubt it will be the solution Metro Coal would be looking for.
http://www.suratbasinrail.com.au/new...basin-rail.php
What's Metro Coals Mkt Cap and EV?
There are plenty of people here who know more about CSG and UCG than I do.
Sections of the farming communities west of Brisbane are agitated about the use of prime agricultural land for coal and gas production, and the possible contamination of the water table by toxins from UCG. Check out Cougar Energy if you haven't already done so.
http://www.abc.net.au/news/stories/2...28/3124052.htm
http://www.abc.net.au/news/stories/2...03/3128805.htm
I was more after your knowledge of Queenland based coal projects, especially the Surat/Bowen Basins
CSG & UCG really need domestic gas prices to rise quite a bit to really gain traction, as i understand it the main attraction is getting LNG via Gladstone to the Asian markets
How's the coal industry holding up after the Cyclone & floods?
Oh i should mention the attraction with MTE (not just the MLM link) was the fact a Chinese company invested $30m into there projects
Shasta, if you're specifically after a Queensland coal play, you might like to take a look at Blackwood Corporation (BWD).
Cheap and some good prospects in both the Bowen and Surat Basins (and Clarence-Moreton and Galilee Basins), including the possibility of coking coal, but you need to take a 12 to 18 month view. Noble Group are a cornerstone shareholder.
Disc: Hold a few.
I haven't been keeping up with it too closely, but the cyclone would have had minimal effect, if any. The flooding was a different story, although I understand a lot of mines were better prepared this time around compared to 2008 when we also had serious flooding in the coalfields. The was significant rail damage as well, but I presume they are well on top of the repairs that were required.
MLM - DRILLING RESUMES ON COLUMBOOLA COAL PROJECT
http://stocknessmonster.com/news-ite...E=ASX&N=229038
Nice map showing what great permits they have in the Surat Basin, also showing who there neighbours are
The recommencement of the drilling program is a positive progression for the Joint Venture between MetroCoal and SinoCoal Resources, the Australian subsidiary of China Coal Import & Export Company (CCIEC), a wholly owned subsidiary of China National Coal Group Corp (China Coal).
These folk are putting $30m into MTE for this project
Market Cap is approx $37m (@ 37c) & they have around $15m cash
MLM's ~30% owned CBX
http://stocknessmonster.com/news-ite...E=ASX&N=229873
This bauxite company has had an ongoing battle with the Queensland Govt over consent issues, im not too sure where these are at, the project looks viable & should obtain "major project status" on the basis it receives the required consents
This company is my example of a term used in share trading " A Dog " got on at IPO for .20c many,many years ago and its so called "Flag Ship" has never left the port, it has to change its name
MLM - New presentation out today
http://stocknessmonster.com/news-ite...E=ASX&N=229988
Extract from the ann...
Become a highly profitable long term diversified developer & producer – flagship NORNICO
• NORNICO Ni-Co-Sc production targeted late 2013
• Zircon-Rutile production targeted early 2013
• Limestone/Lime projects ready for development awaiting market off-take
• High social, environmental and safety standards
• Deliver high returns for shareholders
Quite a large Nickel project in the making!
MLM - The market tends to forget MLM is more than just a LIC, they have some decent projects in there own right!
http://stocknessmonster.com/news-ite...E=ASX&N=230369
MTE - SURAT BASIN COAL PROJECT REGION GIVEN FURTHER SUBSTANTIAL BOOST FOLLOWING COMMONWEALTH GOVERNMENT APPROVAL FOR WANDOAN COAL PROJECT
http://stocknessmonster.com/news-ite...E=ASX&N=230374
I've rehashed the spreadsheet i had lost on MLM, my interest remains as like DGR these are NEGATIVE EV plays ;)
Based on todays closing prices
MLM @ $0.27 = MCap $33.7m
Cash @ 31/1 = $4.9m
Listed Investments = $44.5m (MTE $24.8m, CBX $13.7m, PMQ $3.9m, ORM $2.1m)
EV = ($15.6m) NEGATIVE
NTA = 40cps
This is before ANY consideration of MLM's own projects
Corporate Strategy/Mission & Vision
• Become a highly profitable long term diversified developer & producer – flagship NORNICO
• NORNICO Ni-Co-Sc production targeted late 2013
• Zircon-Rutile production targeted early 2013
• Limestone/Lime projects ready for development awaiting market off-take
• High social, environmental and safety standards
• Deliver high returns for shareholders
Strategic Objectives
• Generate Cashflow Business (NORNICO and Weipa HMS or Limestone or combination)
• Become producer Ni-Co-Sc & world’s major Sc supplier
• Maximise our (4) ASX listed Investment holdings (MTE, CBX, PMQ, ORM)
• Maintain adequate funding and high quality staff
MLM - In specie Distribution of CBX shares
http://stocknessmonster.com/news-ite...E=ASX&N=230794
For every 10 MLM shares you will receive 1 CBX share
MLM - NTA Update
MLM @ $0.26 = MCap $33.7m
Cash est @ $4m
Listed Investments:
ASX: MTE = $24.8m
ASX:CBX* = $13.7m (NB, MLM hold 38.6m shares & are distributing 11.7m to MLM shareholers on a 1:10 basis)
ASX: ORM = $2.1m
ASX:PMQ = $3.9m
Total LI = $44.5m
NTA = 40c (The inspecie distribution will help narrow the NTA gap)
Discount to NTA = 31.71%
*NB, There is some value in the CBX in specie distribution, even though it very illiquid, the entitlement date is 11th May
Based on current share prices 10k shares in MLM is worth $2,600, you will receive 1,000 CBX shares worth $3,550, at last traded price
MLM are giving money away, unless CBX drops below 26c between now & 11/5/11!
Gotta love these negative EV plays!
CBX is a Queensland based Bauxite Explorer
Heres a recent ann:
http://stocknessmonster.com/news-ite...E=ASX&N=229873
Quarterly Activities Report:
http://stocknessmonster.com/news-ite...E=ASX&N=228467
MLM - NTA Update
MLM @ $0.28 = MCap $35.6m
Cash est @ $4m
Listed Investments:
MTE @ 41c = $32.8m
CBX @ 35.5c = $13.7m
PMQ @ 9.5c = $4.3m
ORM @ 22c = $2.6m
Total LI = $53.4m
NTA = 46c (largely due to MTE's run 31 - 41c this week)
Discount to NTA = 38%
Interesting thoughts on MLM and others:
__________________________________________________ __________________________________________________
Dryblower on value gaps, or traps, in the market
Wednesday, 27 April 2011
TOO many companies and not enough investors. That's how Dryblower sees the small end of the Australian mining sector, where an interesting "disconnection" has evolved, a situation that might generate fat profits for anyone with an appetite for risk.
Before taking this discussion too far, a word of warning: Dryblower does not give investment advice. Never has, never will. So, if you buy any of the shares about to be mentioned consider yourself a blithering idiot - and don't complain.
What triggered this idle thought about what might be called "arbitrage" situations, which is a fancy description for a value gap, was a rather sad email last week from the public relations consultants to Metallica Minerals.
"Metallica's cash and listed investments value outrank company's current market price by 72%" was the heading on an email which sounded like a plea from a lost soul as much as a desperate attempt to boost Metallica's share price.
For those reasons, and perhaps because it also sounded like utter rubbish, the PR blurb and accompanying statement from Metallica was totally ignored. Filed at the Australian Securities Exchange at 10.33am on Tuesday, April 19, the company's shares opened and closed at the same price, A27.5c.
By the pre-Easter close of business last Thursday, Metallica had "stormed" up to 28.5c, which means the alleged value gap has narrowed to 68.5% - or, put another way, anyone buying Metallica shares today is handing over 59c for $1.
Why is this so, and can Metallica prove its value gap?
Second question first. Yes, Metallica can run an argument that its underlying value is being heavily discounted. The core of its case is that it owns significant stakes in four other listed companies - 45.3% of Metrocoal, 29.9% of Cape Alumina, 76.2% of Planet Metals and 14.9% of Orion Metals.
Collectively, those four equity investments (at current stock market prices) are worth $53.1 million. Then comes Metallica's $4.1 million in cash to produce a global value of shares and cash at $57.2 million, divided by the 117.3 million shares on issue to imply a cash and investments backing per Metallica share of around 48c - 20c more than the current share price.
There are reasons for Metallica being discounted, the most important being that investors generally dislike listed equity investors and, in the case of mining stocks, the dislike turns to distrust about real values, especially in boom-time conditions.
However, the Metallica discount is so heavy, and the market so disinterested in stock which can be bought for an alleged 59c in the $1 that Dryblower cast an eye across the rest of the small end of the mining market - to discover that Metallica is not alone.
Altona Mining, an emerging copper miner with assets in Finland and Australia, is trading at 35c, but on the day before Metallica's lament Altona was valued at 81c by Foster Stockbroking.
Foster is Altona's tame stockbroker, having helped raise capital for its client in February, but if it has got the numbers right you can buy Altona for 43c in the $1.
Integra Mining is another case story. In February, the broking firm RBS Morgans valued the stock at 83c. Integra today is trading at 48.5c - or 58c in the $1.
A fourth example, Doray Minerals, has the best value gap, or is the worst instance of a broker over-promoting a stock (depending on your point of view). According to an Argonaut Securities report dated April 15, Doray is worth $2.18 though its current market price is 94.5c - or 43c in the $1.
There are reasons for those significant, alleged, value gaps, such as:
- Investors not often believing the spruiking by stockbrokers who, after all, can only make a living by selling someone a parcel of second-hand shares.
- Company management believing that investors do not appreciate the underlying value in the business they run.
- Too many companies and not enough investors.
What's happening is that with the mining company float game running hot (22 more on the ASX launch pad) there is too much choice among small exploration and mining companies.
In fact, sometime over the next week or so, the number of Australian companies in the ASX rises back above the 2000 mark for the first time since December 2008.
At last count, there were 1997 Australian stocks on the ASX, up from a low of 1952 reached in March last year and on the way to overtaking the record of 2016 set in July 2008.
A crowded house is not the only reason for stocks being as heavily discounted as Metallica and the other examples mentioned, but it is a factor, and one which means finding value in the mining market will become harder rather than easier.
Steve
What the market seems to be missing with MLM in particular is that it isnt just an LIC sucking out fees for the top brass, they have some interesting projects in there own right ie Nornico, a large Nickel, Cobalt, Scandium project.
MLM's current value basically = MTE shareholding, the $4m cash, the remaining $20m of listed investments & unlisted assets are FREE!.
MLM @ 27c = MCap ~$31m
Cash @ 31/3 = $4m
Listed Investments (all ASX):
MTE = $31m (Coal)
CBX = $13m (Bauxite)
PMQ = $4m (Copper/Gold, Tungsten)
ORM = 3m (REE, Gold)
NTA = 48c
Discount to NTA = 43%
Can anyone find a broker willing to lend MTE, CBA, PMQ or ORM to short? If you could short these and buy our friend MLM this would be sweet little play...
CBX - Presentaton/Run down
http://stocknessmonster.com/news-ite...E=ASX&N=231825
The MLM distribution will hopefully boost the liquidity
MLM - Presentation
http://stocknessmonster.com/news-ite...E=ASX&N=231892
Nice to see they are trying to promote the Nornico project, ok Scandium isnt exactly a well known base metal, but 400kt/Ni & 42kt/Co is a decent size project !
Negative EV & with 100% owned projects with near term production potential, are why i really like the MLM story ;)
MLM - Ann re CBX for you bauxite fans out there
http://stocknessmonster.com/news-ite...E=ASX&N=231981
Not only will buying MLM entitle you to free CBX shares, they are giving CBX shareholders preferential treatment for the capital raising
shasta,thanks for the update,as I missed the announcement.Bit like Suzanne Paul;"but wait there's more."!!!!!
MLM - NTA Update
MLM @ $0.315 = MCap $36.8m
Cash est @ $4m
Listed Investments:
MTE @ 49c = $39.2m
CBX @ 30.5c = $11.8m
PMQ @ 11c = $5.0m
ORM @ 22c = $2.6m
Total LI = $58.6m
NTA = 54c (largely due to MTE's run 41 - 49c this week)
Discount to NTA = 41%
No allowance made for the 100% owned MLM projects, including the very interesting & decent sized, Nickel, Cobalt & Scandium "Nornico" project
I see MLM has provided an update today, but has taken into a/c the CBX distribution, whereas i havent as yet
I will make the adjustment in this Fridays update
I received my CBX shares today.
MLM - NTA Update as 27/5/11
MLM @ $0.315 = MCap $36.8m
Cash est @ $4m
Listed Investments:
MTE @ 50.5c = $40.4m (Coal)
CBX @ 30c = $8.1m (Bauxite, MLM holding drops to 20.8% or ~27m shares)
PMQ @ 10c = $4.5m (Copper/Gold)
ORM @ 23c = $2.7m (REE's, & Gold)
Total LI = $55.7m
NTA = 51c (largely due to the CBX in specie distribution to MLM shareholders)
Discount to NTA = 38%
No allowance made for the 100% owned MLM projects, including the very interesting & decent sized, Nickel, Cobalt & Scandium "Nornico" project
MLM - EXCELLENT METAL EXTRACTION RESULTS FOR NORNICO TRI-METAL PROJECT
http://stocknessmonster.com/news-ite...E=ASX&N=232439
I'll update the NTA,over the weekend, but given MLM's listed investments already exceed its market cap, the markt attributes a NEGATIVE value to this project!
Nornico is MLM's flagship project covering Nickel, cobalt & Scandium
MLM holding in MTE would be almost approx. $50M and MLM sp is following MTE going UP!
Lawrence
Tax consequences
The Company believes the distribution will constitute a disposal of the Cape In-specie Shares
and will result in a capital gain to the Company. However, the Company has carried forward
taxation losses in excess of the likely capital gain, and hence no taxation liability should arise
to the Company.
The Company believes the taxation implications to Shareholders will be a reduction in the cost
base of their Shares in the Company equal to the value of the Cape In-specie Shares
distributed to them. Should the value of the Cape In-specie Shares distributed exceed this
cost base, then an assessable capital gain may result-based on the number of Cape In-specie
Shares being distributed and the value at which Shares have traded since listing on ASX, the
Company believes this is unlikely to be the case. Shareholders should consult their own
professional advisors to confirm these implications as they may vary depending on individual
circumstances and taxation positions
The Company has not sought any class ruling from the ATO as to the tax implications of the
return of capital to Shareholders. For specific taxation advice, Shareholders should consult
their own taxation adviser so that their particular circumstances are taken into consideration.
MLM - NTA Update as 3/6/11
MLM @ $0.37 = MCap $43.3m
Cash est @ $4m
Listed Investments:
MTE @ 63c = $50.4m (Coal)
CBX @ 24c = $6.4m (Bauxite, adjusted for MLM distribution)
PMQ @ 9.5c = $4.3m (Copper/Gold)
ORM @ 23c = $2.7m (REE's, & Gold)
Total LI = $63.9m
NTA = 58c (largely due to MTE rising from 50.5c to 63c)
Discount to NTA = 36%
No allowance made for the 100% owned MLM projects, including the very interesting & decent sized, Nickel, Cobalt & Scandium "Nornico" project
MLM - 1:10 fully renouncable rights issue to raise $4.9m
http://stocknessmonster.com/news-ite...E=ASX&N=232603
Looks a good deal to fund the ongoing development of Nornico & another Mineral Sand project, & the 2 PMQ (Copper/Gold) shares further shows MLM are trying to enhance shareholder value & free up more liquidity with PMQ.
PMQ recently sold a Tugsten project for $3.5m cash & $3.5m Rothchild shares, so PMQ is effectvely a negative EV company!
MLM - NTA Update as 10/6/11
MLM @ $0.345 = MCap $40.4m
Cash est @ $4m
Listed Investments:
MTE @ 59.5c = $47.6m (Coal)
CBX @ 23c = $6.2m (Bauxite)
PMQ @ 9.5c = $4.3m (Copper/Gold)
ORM @ 20c = $2.3m (REE's, & Gold)
Total LI = $60.4m
NTA = 55c
Discount to NTA = ~37%
No allowance made for the 100% owned MLM projects, including the very interesting & decent sized, Nickel, Cobalt & Scandium "Nornico" project
Shasta, I realise it's fully underwritten, but what percentage take up from MLM shareholders do you expect for the rights issue?
Just guessing but maybe something around 70%?
MLM have around $4m cash, so im interested to see whats left in the quarterly report.
For new shareholders the PMQ shares may be a nice bonus for there Copper/Gold project, PMQ is cashed up after selling the Wolfgram Tungsten project for $7m