I’m not unhappy about the shareholder return here over the past ~4yrs.. something like ~8cps to ~43cps with a ~2cps NICO distribution. Sure - we’d have all loved some dividends or higher capital return given the cash generation of the Asset but sometimes the market doesn’t reward progress for whatever reason. Anyone who says the market is efficient has rocks in their head (imo).
Today we have a company trading at a ~A$380m MCAP.. with ~A$200m in cash and generates (on my numbers) ~A$110m cash per year.. not too dissimilar to you WB200 only maybe a higher tin px and lower capex.
Anyway - ur buying something for A$180m EV that is generating A$110m cash.. what could go wrong?
The capital mgmt/allocation I think is fairly clear.. why pay out any of that cash today given the tax penalties if you can either use it on the buyback (40cps cap may need to be raised) or some investments .. Ringrose and first tin (or dare I say rentails) are probably the best uses of cash there and that says all you need to know about the state of the tin market.
This mine is old but last I checked tin is worth over 3x copper and so this is a >5% CuEq mine. Good luck buying a copper mine with this grade and a >10yr LOM at 2x EV/FCF. Wild.
MLX Price at posting:
43.0¢ Sentiment: Buy Disclosure: Held
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