My two cents worth is that the iron ore price in the next 6 months/two years is more important than the value of the optionality after the current ore in the main pit is mined.
MGX currently has cash @ $162 million. Add FEX $10 million cash, $18 million in shares plus $150 million in stockpiles gives a tangible value of circa $350 million at June 30. Two more quarters with a cash flow of $90 million each will leave MGX closer to $530 million at Dec 31 just $50 million shy of its $580 million market cap. i.e the current share price will be significantly de-risked in six months.
MGX should still have at least 10 million tonnes from Jan 2024 onwards which even at $50 per tonne margin (currently $100) would be great value worth $500 million for $50 million EV or $1 billion if margins were $100 per tonne.
Hard to see MGX not paying a big dividend circa 10 cents at Dec 31 if they have over $300 million cash which they will easily do at current prices.
GLTA/IMHO
MGX Price at posting:
46.5¢ Sentiment: Buy Disclosure: Held
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