Samson - agree with your analysis. On my modelling, they will generate at least 30cps of free cash flow in FY22 (depending upon your IO price assumptions - I am working off USD135/t FOB and exchange rate of 0.80).
Even if they pay out 7cps dividend, they will add a further approx. $300m to the cash pile and as you say, they can be looking at quite a sizeable and value accretive acquisition for cash and maybe a little bit of debt - add that together with a market re-rate for their underlying EPS from existing operations and you can easily see a share price north of $3.50 / $4.00 in the next couple of years.
I was fortunate in that I became aware of this stock at $0.20 mark several years ago. It continues as a long term hold in my portfolio due to the yet unappreciated potential (just as it was similarly unappreciated back in 2015). I prefer these sort of longer term stocks with a clear strategic trajectory to the "get rick quick" plays that so many seem to chase. Whilst they may be under the radar of most, once the market wakes up to them, they become really interesting really quickly - I suspect that will be the story for MGX when we look back at this stock in a few more years time.
GLTA and (the best tip ever) is DYOR!!
MGX Price at posting:
86.5¢ Sentiment: Buy Disclosure: Held
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