So much worrying and ridiculous calls…
Lets get some facts straight:
Current SP= $31
Current MCap = $6.3 Billion
Total Debt= $5.3 Billion
Cash = $1Billion
Earnings from mining services = $550 Million last year, likely to increase this year
Earnings from IO and Lithium = $500 Million if you take off random corporate stuff, increasing with Onslow significantly
Calls for MIN to drop to bloody $15 a share are ridiculous ($10 even more so). That would value the company at $3 Billion, which is only twice LTR, a company with one mine expecting to ramp to roughly 180 kdmt.
Bear in mind, we have three lithium mines, with combined 300 kdmt at the low end of guidance, already paid for and humming along.
And that’s just lithium, pretending IO and mining services don’t exist.
Even PLS, the juggernaut in solo lithium in WA, is worth $7 Billion. They are still ramping to 600 kdmt, double MIN’s output. Both currently worth about the same Mcap, which maybe makes sense, as the mining services and IO far make up for the difference! At $15 SP, would PLS really be worth double, don’t think so… They’re barely making money at this lithium price anyway.
Just silly, anyway, lets look to next year.
No debt is due till 2027 (hopefully IO and lithium recovery by then, and lower interest rates). Interest costs at max are maybe 500 Mil (about 9% interest). That’s covered by mining services income and then some.
Capex for 2025is around 2 Bil required. This will be the hard one to deal with. But once Onslow is going, this should clear quick.
Ashburton is ramping up. Should bring in about $200 Mil or more depending on IO. Rest of Pilbara lets say another 100, and lithium nothing. That’s almost worst case. That’s a shortfall of 1.7 Bil for capex, likely less. I’ll be interested to see what the plan is, maybe asset sell down, maybe CR but not likely, or more debt, again unlikely as so leveraged already.
Again, the company is not at risk of collapsing, just capex is maybe severely limited going forward. A lot probably can’t be avoided though, so either sales or a raise need to get through the year.
Once Onslow is humming, picture totally changes, with roughly 3 Billion earnings, and clearing of debt quickly.
Then there is the gas, which may be worth a tonne, especially if WA allow export, but that is up in the air at the mo!
The current price is driven by fear around the balance sheet of course, but then the low IO and lithium prices and fear of further drops. I think this is overblown, India and Africa will start to take over the mantle from China for end use of IO, and lithium can’t go much lower, miners are dropping like flies and the bottom is likely here or nearly here.
Be greedy when others are fearful, and wow there is a lot of fear on here at the moment!
Take a deep breath and look at the facts!
Keen for other thoughts, but there’s a bunch of burnt gas holders which still are whinging cause they think they lost out on heaps with MIN taking over, and then general sharks circling hoping to pick up the scraps.
Current price is probably fair given the uncertainty with IO and lithium, but we can ride it out with cutbacks in capex, debt is being serviced and is manageable with future cashflows.
Hugely leveraged to lithium and IO, either of those move upwards and we’ll be flying back to ATHs.
Good luck to all the holders, and fingers crossed for some commodity tailwinds for once in the coming few months!
(20min delay)