4Q2024 Valuation, page-40

Here are some thoughts whilst we patiently await the quarterly results.

Our cash build is appraoching $200m which is large when considering a market cap of just $390m so what could management be dicussing behind close doors..... well they have given us some hints.

At $390m market cap we are a small single comodity business and returning the cash via a buy-back or dividend whilst gives us a sugar hit keeps us small. I for one am not in favour of a dividend as my understanding is there wouldn't be any franking credits attached so the benefit to shareholders is likely negligible. I support a diciplined buy-back as it can be verry valuable in the long run to shareholders if bought back whlst our business is clearly undervalued, the buy-back cap we assume is in place appears low IMO and I think we could all agree any buy-back in the mid 40's would still be good value so I hope to see this adjusted.

I'm all for management growing our business and making good use of the cash pile so what could this growth look like:

RENTAILS:
Whilst some way off yet a large investment into Retails is likely and therefore a good chunk of our cash should be earmarked in readiness - I'm saying an amount equal to our full share of the Retails investment but a good portion of it.... Maybe $100m with the rest coming from cash flow and/or debt once the investment amount is known.

RINGROSE:
I'm not really sure what size investment is needed here nor if our partner is interested however if high grade and easy to access why wouldn't we so until we know what is there we should have some cash ready to throw at it.

CYPRIUM (CYM):
Management have indicated a desire to protect our interest in CYM which may involve throwing some additional cash at CYM to leverage and protect our interest. If the revised Nifty plan has legs and can turn a profit our investment can be realised whilst currently it can't. My guess is we'd be happy to invest further into CYM and sell it down in the future.

NICO RESOURCES (NC1):
This requires an investment well beyond our capability so we can only hope someone with bigger coffers comes along and buys NC1 and we can sell our remaining 9m NC1 shares.

TANAMI GOLD (TAM):
We have 34m shares in TAM and Brett Smith sits on the TAM board and our biggest shareholder APAC owns 43% of TAM. If I were a betting man (which I am) I would not be surprised to see more investment happen here. Brett Smith was excused from a couple of MLX board meetings due to conflict of interest which may suggest our board discussing the TAM investment. TAM only own half the Tanami gold project and I not sure if this is a good or bad investment.

I dont know what investments our management have planned but it certainly looks like they'd prefer to grow the business than return cash.

On a seperate note, LME Tin inventory has started to drop again albeit slowly and currently sitting at 4,335 live warrants. SHFE Tin Inventory is back down under 14k after peaking over 18k which is also good news. Declining Tin inventory is likely providing the support to the tin price.

So my message to management is:

Lift the buy-back cap and demonstrate to the market we thik we're still undervalued.
Keep some money aside for core business growth initiatives eg. Retails/Ringrose.
Be smart with any left of field investments as this may spook the market.

I don't know what management are thinkng so my comments above are simply reading between the lines of what we've been told in ASX reports so take my comments with a grain of salt.