A share buyback is indeed a no brainer. From a macro perspective we are looking at a minimum of 6-12 months of difficult markets, escalating mining development costs, and tin price being weak, potentially breaking below 30k on LME today if SHFE price action is anything to go by. I doubt we need to wait until end of this year to conclude that we should be pushing back Rentails until there is enough confidence that we're near the bottom of this downturn.
So, what to do with all that cash on the balance sheet? Assuming that tin stays high enough for MLX to remain reasonably profitable, buying back its own shares is by far the best risk-adjusted option available to management. I'd be even a little more aggressive than @Cashmeoutside. I'd go for 15% buyback for about 50mn at current share price. Over time MLX will generate more than enough cash to fund Rentails should it be worthwhile to do so post PFS.
MLX Price at posting:
37.5¢ Sentiment: Buy Disclosure: Held
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