The facts are: that putting aside the Gutnick factor and making an honest risk/reward analysis of MED, I doubt you will find a better play in the market at the moment.
We have a company that is NOT looking to find kimberlite pipes & finding diamonds for the first time. These pipes have historically produced some of the largest gem quality diamonds ever found in Australia. In the last 12 months they have also found some coloured diamonds (pink/green/blue).
Looking through some of the company presentations from years ago, you can see that some of these pipes have only been mined to a depth of 60-80 metres with projected depths of 400-700 metres.
From 2016 Investor Presentation:
• The largest diamond ever found in Australia came from the Merlin Diamond Mine measuring 104.73 cts.
• Ashton Mining Ltd and Rio Tinto Ltd completed 5 years of trial mining at the Merlin Diamond Mine between 1999-2003 processing over 2.2 million tonnes to produce 507,000 cts
• Merlin diamonds is renowned for large, super white gem quality stones with over 31% of the stones previously produced being in the +13 DTC size fraction (approximately +0.7cts)
• Of the +1ct diamonds, in excess of 75% were assessed as ‘gem’ or ‘near gem’ quality • Merlin has identified 80 exploration ready near mine targets for continued and sustained mining operations.
With introduction of the Tomra machine & initial success in finding some larger gem quality or coloured diamonds, the company will have sufficient funds from sales or from a CR at much higher levels to introduce additional Tomra machines. There will be money for further exploration to find additional kimberlite pipes and fields.
People might not like Gutnick, but people have forgotten that Joe has been responsible for finding some of the largest gold mines in Australia in past decades. If there is a wiff of a new kimberlite field at Merlin, leave it to the Gutnick family to bring it to fruition in the quickest manor.
How about if they find some larger colored diamonds ? Some coloured diamonds larger than a 2 or 3 cts fetch over $1 mill per ct !!
What is the potential upside ? 10x, 20x or ?x
Current market cap at 0.6c approx = $ 10mill
3c = $50 mill market cap
6c = $100 mill market cap
MED Price at posting:
0.6¢ Sentiment: Buy Disclosure: Held
