Hmmm - nothing much to get excited about in that announcement. FY21 pretty much as previously indicated (although noted the inclusion of FX hedging mark to market exposure decreasing FY21 profit). FY22 volumes have been managed downwards to 2.0Mt from KI and 1.0Mt from Shine.
I have quickly re-run my numbers for FY22 off the back of this guidance (based on US$150/t for KI 65% Fe, US$100/t for KI 60% to 62% Fe and US$72.5/t for Shine) and I estimate they are looking at circa $122m NPBT for this FY. What we don't know is what portion of the 2.0Mt from KI is lower grade - so I have assumed 0.6Mt of KI is lower grade and only US$100/t for that ore. Note I am estimating $100m of depreciation and amortisation costs for FY22.
At 68.5c per share ($814m market cap = $450m market cap of operating business after excluding cash), the operating business is currently valued at just 2.4x my estimate of net (after tax) cash from operations. Still exhibits potential for significant re-rate from here over the next 12 months.
GLTA & DYOR
MGX Price at posting:
68.5¢ Sentiment: Buy Disclosure: Held
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