Minerals corporation, big things happening, page-8

Hi Toni999,

I agree. Make up your own mind and do the research.

However, so far as Angus Geddes and Fat Prophets are concerned, I think thatthey have already put their money where their mouthes are. They have also researched the position and commented on it in detail to their members.

At the base of their email update for this week, was the following disclosure statement:

“Mint Financial Group Pty Ltd, trading as Fat Prophets…….Directors and/or associates of Mint Financial Group Pty Ltd currently hold positions in – ….. Minerals Corporation (MSC………– These may change without notice and should not be seen as recommendations".

In this week's edition of Fat Prophets (#81 of 14/5), the following report on MSC was also included:


"Minerals Corporation

Minerals Corporation (MSC) was first recommended at
27.5 cents as a "signature dish" in February (FP#69).

We thought that MSC was cheap based on projected
revenues and cash flows over the next three years. At the time the stock had been trading in an established range for close to two years, and we believed a break higher was imminent.

MSC is aiming to be a global kaolin producer supplying the quality end of the market. Kaolin is used as a pigment in the manufacture of coatings for paper based products. The company’s main asset is the fine grain kaolin plant at Skardon River in Queensland. The fact that Skardon River is a world-class kaolin resource, independently valued (in June last year) by Hall Chadwick Corporate at $93.5 million, is highly encouraging. Yet surprisingly, MSC’s market
capitalisation is only around $59 million. We believe that in light of the recent commissioning of Skardon River, it is only a matter of time before MSC is materially re-rated by investors.

Since February, we have been greatly interested in the
company’s progress at Skardon River, and in particular last week’s announcement that the dry plant had been
successfully commissioned. This is a major milestone for
the Project, as it means final samples can now be shipped to target customers immediately before full production commences. The rectification of prior operational problems has led to significant production improvements. In particular, MSC now anticipates a 10 percent reduction in fuel demand from that previously estimated. Product quality also appears to be highly satisfactory, with brightness also much better than anticipated.

MSC is now in a position to take the next step and
commission the entire plant. The importance of the Skardon River Kaolin Project (SRKP) to MSC cannot be overstated, as it will eventually transform the company into a major kaolin producer with significant exports (around 90 percent of production) to Asia and Europe. The Project’s initial financial risk has been substantially mitigated with the first two years of production being fully underwritten with locked in customer contracts. We also note that the Project is backed by a highly
experienced production and marketing team.

The directors believe the SRKP will require funding of $17.5 million over the next 12 months. A placement in February of 15 million ordinary shares at a price of 26.5 cents has already generated $3.975 million. A further $3.677 million will be raised from the recently announced placement of convertable notes issued at $1. The notes, which expire 30 September, are paying 11.5 per cent interest, and MSC intends to minimise any equity dilution effect by repurchasing them as surplus funds become available. The balance of
required funds will be provided by way of a $10 million
leveraged lease over the plant, once the SRKP is fully
commissioned. These financing arrangements will allow
MSC to maintain a healthy financial position and clear all
outstanding bank and vendor debt.

It was no surprise that last week’s announcement caused a surge in MSC, which resulted in the share price breaking upwards from a trading range. This price action provides a clear signal that higher levels will be forthcoming over the medium term in our view. We believe that MSC will trade up towards (and possibly above) our initial target of 40 cents over the coming twelve months. In our opinion Skardon River is an attractive opportunity that could generate substantial
revenue and earnings growth, while at the same time
requiring a low level of capital investment. MSC continues to be strongly held within the Fat Prophets portfolio".