MLX metals x limited

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54.5¢

If Old Peak insists on selling they should just organise to buy...

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binwood

9,194 Posts.

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14/08/22

08:39

Post #: 63100975
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Originally posted by wb200 ↑

Trying to do a numerical comparison between buyback and Rentails based on 2017 DFS numbers. It's very back-of-the-envelope, so I appreciate you all poking holes and correcting mistakes.

Here it goes:
(1) Assume the company has A$10mn to do a buyback. How much of annual tin production does that buy you? A$10mn gets you a bit more than 33mn shares @ 30c or about 3.67% of outstanding shares. Annual (MLX share of) tin production is, say, 5500 tons. So, A$10mn buys you 3.67% of 5500 = 202t of annual tin production at Renison.

(2) According to 2017 DFS, A$200mn will buy you (MLX share of) 2700t of tin and 1100t of copper. Given current prices let's call that 3052t of tin equivalent. So proportionally, A$10mn buys you 10/200 of 3052t = 153t.

Clearly, the share buyback price matters a lot. If the share price was 40c we would get about the same amount of tin for our hypothetical A$10mn. Similarly, if the Rentails cost turned out to be 300mn instead, then corresponding "break-even" share buyback price would be 60c.

In conclusion, at 30c a buyback is clearly the far better option for shareholders, especially since it stands to reason that capex costs to get Rentails on the road should have increased quite a bit in this inflationary environment.

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If Old Peak insists on selling they should just organise to buy a $10m block from him at 28c (35.7m shares) and cancel them. Would be great ROI but barely effect our cash balance AND take some of this overhang

MLX Price at posting: 30.0¢ Sentiment: Buy Disclosure: Held
11 Upvote

0 Great analysis

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(20min delay)
Last 54.5¢		Change -0.010(1.80%)		Mkt cap ! $483.0M

Open	High	Low	Value	Volume
56.0¢	56.0¢	54.5¢	$613.2K	1.109M

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No.	Vol.	Price($)
5	75745	54.5¢

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Price($)	Vol.	No.
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No.	Vol.	Price($)
4	70745	0.545
7	75727	0.540
4	73500	0.535
5	72061	0.530
2	7404	0.525

Price($)	Vol.	No.
0.550	48986	1
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