MLX has done a stunning deal to acquire the Meekatharra Gold Operations (‘MKO’)for ~7% of the recently spent capital (+ acquisition cost) providing a low capital risk solution for its own Central Murchison Gold project (rsc 4.9moz, rsv 1.17moz) without debt, construction risk and timing pressures. Ultimate production of +100koz pa @ <$1,000/oz is possible and a combined 8.5moz resource offers significant leverage.
Our valuation has increased to $0.37/sh and PT to $0.40/sh as we see continued upside as it moves into production in CY’15. In these tough times we believe MLX is a stand out. It generates significant free cash, has done some transformational deals in the past year and has yet to be significantly re rated. Buy.
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