Afternoon fellas,i expect a far better Monday than we had last...

Afternoon fellas,

i expect a far better Monday than we had last week when MLX got caught up in the metals correction, in part led by Ni’s dive on the Taingshan news, and in part due to macro / market factors.

if anyone is interested, I highly recommend an interview with Mark Thompson on Mining Stock Daily (hosted by Trevor Hall) podcast which was released on Friday. Mark’s interview was the first 1/2 hour.

He makes some very good points and, in the context of his professional career, IMO I think that some of the wisdom he imparts will be valuable for investors searching for conviction in this niche metal and MLX specifically, which was named in the interview.

Whilst the interview covers commodities generally with a focus on Sn, I found these points interesting:

- zero exploration and development from hard rock Sn for over 30 years
- a large Sn inventory the US held as part of the cold war led to multi decade bear market until 2005
- a large Sn inventory held by the ITA in an effort to counteract the Sn bear market added to the sector’s woes when it collapsed and, likewise, was sold into the market
- these inventories are now exhausted
- we are entering a “commodities super-cycle” with no inventory
- market currently supplied 40% by alluvial, small scale mining operations in Asia and parts of Africa. This has been filling the supply gap left by closed hard rock mines and dearth of new mines. Easy / economical alluvial deposits are depleted
- only two Western listed pure play Sn producers (MLX and AFM)
- AFM has a truly exceptional ore body but in DRC. Will not be surprised if price of Sn continues higher, that at some point AFM experience “security issues”
- Sn is a strategic material with zero sources in USA. Makes USA vulnerable to Chinese dominance (like REE and Tungsten, et al)
- Critical to electronics industry. No access to Sn means no electronics manufacturing capacity
- some uses for Sn have no substitutes
- Sn is a very small cost / use component of high value electronics components. Example cited was that iphone sales will not change at all if Sn input cost for iphone goes from 5c to 50c
- thus the price is very elastic with little change in demand. The key driver is for end users is having access to Sn not the cost, especially when used in high value electronics

Mark used to be a commodities trader for several large Investment Houses. Of all the commodities, and he is bullish commodities generally, Sn and Cu are his favoured commodities for now followed by Tungsten (but too early).

I’m approaching 1% of MLX and I’m not selling.

I also consider that, via the Con Note, MLX still has an upside option, but no obligation, to Cu. I am also very bullish, LT, on this metal.

[Off Topic: he mentions a Cu play. I am long this name. It may be a very early stage Ero Copper look alike ... or not]

cheers
John