Shanghai tin market is still very soggy. Simply cannot get itself above the CNY200k/t level. Think that's what's really weighing down on the market and MLX. So, my simple back-of-the-envelope calculation for MLX sees tin @ US$25k/t (that is about A$36.5k/t at current FX) and eventually AISC @ A$20k/t. At 5,500t a year that generates about A$90mn. If you want to be really pessimistic you can do the same calc with tin @ US$20k/t. That gets you about A$52mn a year, and arguably that is what the market is pricing in now if you apply a 6x P/E multiple. Medium to long term I don't think this is right, but then we could be facing a very difficult 12 months in the global economy. Some form of a recession is almost a certainty. And this time policy makers are out of bullets to engineer a quick turnaround.
All I'm hoping for is that management is prudent, keeps most of the cash in reserve and uses some to buy back, say, 10% of outstanding shares. Unfortunately, it doesn't look like it.
MLX Price at posting:
34.5¢ Sentiment: Buy Disclosure: Held
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