One thing on capital management. We’ve seen recently with 29 Metals what happens when a higher cost producer with a stretched balance sheet has an operational hiccup (flooding event).. they are on their knees atm looking a a huge recap and have no capacity to add any debt. These deep UG mines can encounter operational issues, I think running a conservative balance sheet with an asset like Renison is prudent.. Also Alphamin when they first started production had a bridge collapse which prevented critical supplies coming in and concentrate/revenue going out. What’s the right amount to hold on the balance sheet? I dunno - but holding 6mths of operating costs on reserve (A$100m) is probably reasonable until such time as an additional revenue stream is found.
Probably still too early to me talking cap mgmt but they should certainly be thinking about it.
MLX Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
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