I dont see the Wingellina asset priced in to the MLX share price at all at the current levels. Whilst it has huge upside potential, production is a long way off (2012 at best) and many many mountains to climb before production could start. All it is at the moment is a great deposit, but based on current share price it seems the market is giving in next to no value. For a company with forecast EPS of around 8cps in FY09, a PE of 5-5.5x is probably fair for MLX, that equates to a share price of 40-45c which is the current share price. Therefore, theoretically a negative feasibility study shouldnt move the stock downwards at all. However that ugly factor called sentiment could easily send it down 20% though.
On the otherhand, a positive feasibility study may see Wingellina given some value to be reflected in the share price, meaning the upside depends on just how much the market likes the outcome.
MLX Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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