MGX - what she do

[k1w1]

I can't find a thread for this pure iron-ore play.

Look at its pretty chart until I bought some today when it went down 6%.This is known in the trade as the K1w1 effect and is pretty much guaranteed.

Anyone else following this stock ?

[shasta]

I can't find a thread for this pure iron-ore play.

Look at its pretty chart until I bought some today when it went down 6%.This is known in the trade as the K1w1 effect and is pretty much guaranteed.

Anyone else following this stock ?

I havent been as yet, but K1w1 chin up, Iron Ore prices are likely to hike up 25% + in 2008, MGX will have there day in the sun!

[rotweiller]

Yes. I have a holding in this stock and have been very pleased so far with the Capital gain. Unsure why such a correction today but not concerned and shipments have commenced.
Cheers

[rotweiller]

The Australian Takeover Panel has ordered that due to unacceptable circumstances, the purchase of a large parcel of shares by Shougang is null and void and is not to proceed.
Interesting times now if the Chinese wish to make a full takeover bid.
Cheers

[rotweiller]

TRADING HALT on MGX shares due to "a potential transaction concerning a material shareholding in the Company"
BOY - that didn't take long.
I get the gist that shareholders generally a not enthusiastic about a takeover.
Cheers

[soulman]

This is a slider. I was trading MGX in the low $2's and got out 3 times at greens. Such hindsight to comfort your too many other bad trades that's gone wrong.

I am glad I did not re-enter MGX at $1.50 and the slide is a slide alright. MGX losing 3/4 of it's value in a month. Ouch.

[winner69]

This is a slider. I was trading MGX in the low $2's and got out 3 times at greens. Such hindsight to comfort your too many other bad trades that's gone wrong.

I am glad I did not re-enter MGX at $1.50 and the slide is a slide alright. MGX losing 3/4 of it's value in a month. Ouch.

Suspension until all things get sorted out

From $3.75 to 40 cents is sure some slide ...... but more and more of these sort of charts are beginning to hghlight the resource bubble we were in ......... and bubbles don't normally follow bubbles so as Lizard says 'are resources last years story?' (or something like that)

[ritchie]

Im surprised no one hasnt mentioned this stock...incredible turnover

[Dr_Who]

IT is on my watchlist. They are doing a capital raising to stay alive. The Chinese are giving them a hand.

[ritchie]

up 26% so far today....go the chinese

[soulman]

Good call AA. My auntie inherit MGX from the Aztec T/O (3 to 1 ratio, I think) and watch it climbed from 85 cents to $3.60 only to still have it now. Taking profits in these market still works.

I will stay away from MGX because I do not think MGX is a $350 million coy.

[Dr_Who]

How can MGX do a rights issue at 60 cents when the sp is at 47 cents?

The entire saga is quite funny.

Management oppose the Chinese taking 20% holding early this year @ $2.60 and now management is rolling out the red carpet and welcoming the Chinese @ 60 cents... ROFL!!

[STRAT]

How can MGX do a rights issue at 60 cents when the sp is at 47 cents?

The entire saga is quite funny.

Management oppose the Chinese taking 20% holding early this year @ $2.60 and now management is rolling out the red carpet and welcoming the Chinese @ 60 cents... ROFL!!Yeah, I had a look over it yesterday after AA tipped it and after reading the last 10 or so anns was also left thinkin WTF??? My simple take on it was a buch of cutomers have backed out of contracts and left them way short of cash so now some customers are buying into a cap raising at a premium. Sure left me thinkin there will be more to disclose so I left it alone. Theres more ethan meets the eye here I reckon.

Anyway glad it paid off for ya AA.

[Zephyrus]

The deal with the Chinese is still some time away & requires shareholder approval. In the meantime, another company (a white knight) could provide competition to the Chinese. Remember, the Chinese will only increase their shareholding if the rights aren't taken up. Also, shareholders could in theory vote no to the rights issue & yes to the offtake agreements. If another larger shareholder enters the register it could be all on. This could be the reason for the increase in price yesterday. The company will be very profitable from July 2009 onwards.

[Joshuatree]

$342 million in cash and deposits mkt cap $556 mill. P/E 6.6 , D/Y 8.2 getting re $115 tonne. Timing is everything and im not in.

[mark100]

I'm watching. Nice deep value play when the sentiment turns

[JBmurc]

Good buying here IMHO @ 62c

-48cps in cash
-4cps divi ex.date round 10 days away
-I.O 3% price lift overnight ...
-Glencore looking to buy more I.O interests ?
-China looking to a second stimulus
-lower Breakeven $77ton I.O USD than the likes of AGO,BCI,GBG

Morningstar-----Aug 2014

Adjusted net profit of AUD 117 million was slightly stronger than expected and an improvement on the AUD 93 million result from fiscal 2013. The solid outcome was largely thanks to continued cost control and we factor some modest gains into our forecasts. Management continues to focus on cost savings and unit-cost efficiencies at Koolan Island as volumes ramp up to capacity of 4 million tonnes a year from the end of 2014. Guidance for iron ore shipments of 6.6 to 7.0 million tonnes in fiscal 2015 was a bit weaker than expected but not materially so. The balance sheet is excellent with more than AUD 500 million net cash. Mount Gibson continues to reward shareholders and will pay an unchanged AUD 0.04 fully franked dividend. We make no change to our AUD 0.90 per share fair value estimate. Long-term assumptions remain USD 90 per tonne iron ore delivered to China (2013 dollars, inflated at 2.5% per annum) and an Australian dollar/U.S. dollar exchange rate of 0.90. The fair value is supported by cash worth nearly AUD 0.50 per share. Shares are slightly undervalued but we think management's disciplined approach to operations, continued payment of dividends and stabilisation in the iron ore market will close the gap. Despite being challenged by relatively high costs and short life, management's focus on cash generation, cost control and the tight rein on capital spending continues to impress. The key risk is how cash will be spent but, to date, we have been pleased with the company's disciplined approach to acquisitions. Our overall view is unchanged. Above-average cash costs and short mine life of about five years on reserves dictate our very high fair value uncertainty and no-moat ratings. At our long-term iron ore price, Mount Gibson's margins are skinny. On the plus side, the strong balance sheet provides considerable resilience and options for clever capital allocation should there be further unexpected price weakness.

[Okebw]

I've been keeping an eye out for a while to see where this one was headed and it appears I've dodged a bullet.
This coupled with the still falling iron ore prices could be catastrophic for MGX

http://www.asx.com.au/asxpdf/20141126/pdf/42v17xd8nv99kh.pdf

[Joshuatree]

And 50% down today .Hope noone got caught

http://www.abc.net.au/news/image/1738372-3x2-340x227.jpg

[Okebw]

And 50% down today .Hope noone got caught

http://www.abc.net.au/news/image/1738372-3x2-340x227.jpg

Missed the knife fortunately. Though even after the associated employee termination costs and the asset write downs MGX now has about 150% or so of the share price in cash (give or take, it's too late for math) as well as the insurance policies they hinted at to be cashed in. Could be worth a crack

[JBmurc]

Missed the knife fortunately. Though even after the associated employee termination costs and the asset write downs MGX now has about 150% or so of the share price in cash (give or take, it's too late for math) as well as the insurance policies they hinted at to be cashed in. Could be worth a crack

Yes a ton of cash to Market cap ....many opts available to MGX ...

[JBmurc]

Brought a position 25c would like a few more round these levels ....33c+ in cash ....50c Analyst valuation recently ....I.O moved upwards JPM give average I.O target USD$79t av. for 2015 ..AUD weakness add to the bottom line profit..

Even though Koolan Island operation could well stay on C&M for some time if the costs to fix the seawall are over the top ...MGX's other W.A- I.O operations should still see production over 4mt..

One of the Biggest upsides with MGX is the 360mill in cash + Tax refund due $35 mill... (current Mktcap. @28c 305mill)

With so many cheap mining assets round MGX could quite easy secure a couple undervalued Gold , Nickel producers etc and build a nice diverse Mining company

[Abacus]

I was in at 0.25 too and agree with your assmt.

[JBmurc]

another larger bid @26c in place ....be good to get filled on a lower swing tomorrow but with a nice close ...(not asking to much)

Have placed a 32.5c sell order on my first lot ....

Now get them both before the weeks out and I will be a happy camper

[JBmurc]

Ended up selling my position 24.5c ,,,,,not long after buying ...I see the bids @ 17.5c today still have well over 300mill in cash thats 110mill+ more than the marketcap ...now if only the Mgmt could wake up and be pro-active on investment rather than continue to dream that I.O is going be a good investment ...IMHO they should exit all but the best of their I.O projects .... and in turn look for some profitable investments ..Gold producers in Aus are one of the few in the resources sector to be making very good profits so not stupid to diverse here

[JBmurc]

Brought a few other day 19c no brainer here ....31cps in cash ,Iron ore operations now profitable ,insurance payout to come
up 15% today to 23c ....short term target 40-50c

[blackcap]

Brought a few other day 19c no brainer here ....31cps in cash ,Iron ore operations now profitable ,insurance payout to come
up 15% today to 23c ....short term target 40-50c

Hi JBmurc, got some of these recently as well (buying money really if you are prepared to be patient). But how much do you think the insurance payment really will be. I note they got an interim $2m but the market to me is signalling that they expect nothing from the insurance companies. If there is a substantial payment then on the flip side this stock could take off.

[JBmurc]

Yeah not to sure but it must be a good few million 10-20mill my pure guess ?

[JBmurc]

MGX Now my Biggest holding safe play IMHO with next to nil downside in the short term with $520,000,000AUD in- cash/term deposits(with mave a few million more from last of the insurance payout)

some great high grade Iron ore assets and small production >>> Market values at only $383mill !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

March quarter>>
-iron ore sales of 0.8 million wet metric tonnes (Mwmt) including low grade sales of
0.4 Mwmt, and quarterly ore sales revenue of $44 million Free on Board (FOB).--

--Nine month iron ore sales of 2.6 Mwmt, including 0.8 Mwmt of low grade material, and nine month
sales revenue of $148 million.

-Quarterly cashflow of approximately $9 million.

 Net profit after tax of $22.9 million reported for December 2016 Half Year.!!!

[blackcap]

MGX Now my Biggest holding safe play IMHO with next to nil downside in the short term with $520,000,000AUD in- cash/term deposits(with mave a few million more from last of the insurance payout)

some great high grade Iron ore assets and small production >>> Market values at only $383mill !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

March quarter>>
-iron ore sales of 0.8 million wet metric tonnes (Mwmt) including low grade sales of
0.4 Mwmt, and quarterly ore sales revenue of $44 million Free on Board (FOB).--

--Nine month iron ore sales of 2.6 Mwmt, including 0.8 Mwmt of low grade material, and nine month
sales revenue of $148 million.

-Quarterly cashflow of approximately $9 million.

 Net profit after tax of $22.9 million reported for December 2016 Half Year.!!!

Yes the insurance payments was a nice surprise and I am locked and loaded. Not worried about the day to day gyrations in stock price, the cash is already worth more than 45 cents per share, Koolan Island will cost 90m to build and plenty of good Iron ore there.

[JBmurc]

Yes K.I high grade reserves in place ....worth a good amount more than average Iron ores >>> 90mill CAPEX will be paid back just over 2.5yrs of operation >> so another -$45mill++ EBIT(over 12months) before having to expand reserves (which shouldn't be hard with large resource in place)...

Personal I think MGX should take out SFX -- located in the same state....

best undeveloped mineral sands projects globally. It is well located in WA, which means low
sovereign risk (most other large new mineral sands projects are in Africa),
with a very long mine life, well located to port and with a large proportion of
high value products (zircon and leucoxene) as well as significant volumes of
high quality ilmenite, which means it could be strategically important.

http://www.sheffieldresources.com.au/irm/PDF/2856_0/HartleysResearchNote

Would think it could be done for $50-70mill + MGX scrip 1:1 .....then the bulk of pre-production CAPEX could be funded by MGX say 200-300mill with some short term debt to be paid back within year a two ,,,,,

Then going forward MGX would have $170-250mill EBITDA income for good few years (SFX mineral sands project life 40yrs+!!)

Huge spare funds to continue to grow high grade I.O operations ...maybe tag on some other base metals to complement the Bulk resources operations


And one would think with earnings minelife MGX outlook etc would command min P/E-15 Mrktcap- 3bill ($1.3bili total shares)

==== $2.30ps target minus cash backing (5% divi would soak up 150mill etc) >>>>>>