On 31st August I had written that I was a bit confused about the quarterly, previous announcements etc. Sincerely trying to understand what is happening, so please don't take it in another way.
As I mentioned last time, I am a past holder of MGU. I had my average buy at around 11 and had to exit around 8, so lost just under 30% on a good holding. That was a while back. But not a day goes when I don't check what is happening here, waiting for a turn around. I want to get in - but once bitten twice shy scenario is playing with me.
Recently the price action has been good, it moved from 1.5 to 6, roughly 300% gain. After last time debacle, I had thought I will only get in when there is clear confirmation of something, especially numbers, economic viability etc. Hence I did not play rise. Last time I posted it was at 4.6, moved to 6 and now at 3.5.
Around 2 years back there was lot of excitement. I still remember the Wolf of ASX had organised a Webinar with Dano who was in US and webinar took around 4am his time or so. It looked very good. Everything was presented well. And Dano regularly used the term - "we are shovel ready", "all transport/land/permits sorted out, etc". So there was nothing much to dislike. In fact very exciting. Only problem was numbers. I think when the numbers were calculated - openly or may be not completely disclosed, everything fell apart. Also IO prices were not good. After some time, Dano who was so excited had to leave along with Don Carroll, the Chairman. . I am sure we have some learned posters over here, who may have gone through that phase and also are still here playing this phase. If someone is there, it would be good to give a small update of what really is happening - as I said, I get very confused reading announcements which don't tie up etc. So please, some long term holders, a quick overview would be good. . Every time I read an announcement, even without check, I somehow feel I have read that before - just gut feel, not verifying it.
Eg this announcement is from 13th August 2021 - exactly 2 years back. Many things now also talk similar. So get more confused. Anyway, I hope MGU does turn around in big way one day, it has got a lot of potential, just have to find the right legs and all holders get rewarded
Announcement 13th August 2021 (and also subsequent announcements including Investor Presentations) (link -
MGU Green Iron production focused strategy for development and growth Magnum Mining and Resources (ASX:MGU) is pleased to provide this update to outline the key areas of MGU’s objectives and strategy in 2021 and 2022, that will underpin and drive the Company’s development and growth going forward. . Highlights: • MGU’s vision is to be a producer of green iron for domestic US and international customers. . • The key objective is to maximise value and returns for shareholders. This will require MGU to extract the highest value from the Nevada Iron asset by producing high value green iron products such as pellets, HBI and pig iron. . • Shipments of HBI and pig iron is our primary focus due to the premium price we can achieve for these products. Shipments of DSO will be done on an opportunistic basis to international markets when pricing is attractive. . • Anglo American shares in this vision and is a key part of MGU’s strategy to achieve the financing, development and production of green iron. . • Much has been achieved to date, including the ongoing extensive testing of ore samples to define the ore processing plant, the signing of MOU’s with port and rail service providers, the completion of mine plans and the development of a design for a facility that will produce a magnetite concentrate to be fed to a rotary kiln for the production of sustainably high margin and high value products of HBI and pig iron. . • Importantly, and in accordance with its ESG policy, MGU will produce a concentrate and pellet feed in a process that will limit CO2 emissions as well as saving water and power consumption. The rotary kiln will be designed to use carbon char produced from biomass, and to be suitable for hydrogen injection as an additional reductant in process of making green HBI and pig iron. . • The global steel industry is very focused on ways to reduce its carbon emissions and it is expected that the Nevada Iron plant will be a leader in facilitating low carbon (green steel) production. . Strategy and Objectives As previously announced, Magnum’s strategy is to become a US based producer of high quality and premium HBI and pig iron. These products attract a significant premium to the iron ore price and are more profitable than DSO. Our current Term Sheet with Anglo American also covers the financing of development and sale of these premium products. Given Magnum has over 230 million tonnes of resource and the current iron price levels, it has decided to fast track the much larger opportunity with HBI and pig iron rather than ship the minimum 500,000 tonnes of DSO as previously announced. Shipments of DSO will be done on an opportunistic basis to international markets when pricing is attractive though Magnum remains focussed on the most expedient development of value added and long term sustainable high margin green iron products. . Over the past five months Magnum has been working on developing its mine for HBI and pig iron in parallel to DSO. Magnum and its consultants have completed a mine design, undertaken extensive sampling for the design of the primary and secondary crushing and screening process, and investigated optimal tertiary grinding and magnetic separation. This has involved the shipment of over 7 different bulk samples to equipment manufacturers in the US, China and the UK. . In addition, Samuels are working on the up-dated Bankable Feasibility Study (BFS) to bring green HBI and pig iron to market in the United States. As previously announced MGU has engaged Savage Group Logistics to continue the work to date on the logistics chain from the mine site to the port, including trucking, rail transport and port handling. . The mine and plant design will be done in a manner to ensure that the already approved environmental permits and footprints will require minimal changes, thereby ensuring that previously forecast construction and completion dates can be met. . Commenting on MGU’s development strategy, Chairman Don Carroll stated: “the extensive work completed to date, particularly the sample tests, and associated with plant designs, has enabled Magnum to continue to fast track the process to become a HBI and pig iron producer. As a team, we remain very excited by this opportunity to be an industry leader in the production of green iron
MGU Price at posting:
3.5¢ Sentiment: Hold Disclosure: Not Held
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