merrills report

This Merril Lynch report is very, very solid news for MMX.

The $5 price target from a mainstream broker should provide a strong tailwind to push the share price up pretty quickly. But what I am really excited about is that Merrill's target looks like it will be adjusted upwards as MMX ticks off milestones towards its Stage 2 mine.

So as MMX makes major announcements along the way we will get an impetus for share price movement from two sources - the announcement itself, and hopefully Merrill's reducing their discount rate and hence upgrading their price target - towards the ultimate dream of the undiscounted $13 valuation once all milestones have been achieved.

And as for MMX's progress along the way...I am very confident about this.

Company management are acting as though MMX already has a delineated reserve. I don't believe this indicates the management are too aggressive. Rather, their actions may indicate that they have a very high degree of confidence that the reserves are there. Management track record so far gives me even greater confidence in this, in that they are very conservative about what they say, but the decisions and actions that the company makes indicate great confidence in the viability of the project. My assessment of this is that they expect the reserve is at least big enough to accomodate Stage 2, but they can't come out and say this until the drilling has been done. I wouldn't be surprised if we have upside potential on the reserve.

So lets compare this to FMG:

Figures I've seen on this forum suggest MMX's Stage 2 at 25 million tpa vs FMG's 40mtpa. So MMX about 60% the size of FMG sales.

But MMX is already mining....and delivering very high grade ore to customers. That counts for ALOT.

So MMX is still hugely undervalued compared to FMG in my opinion.