Personally I wasnt blown away by the quarterly update. That drop in tin production forecast for this year was rather disappointing. This will more than likely create some doubt for investors in MLX's ability to hit that 7,500 tonnes. In saying that, there were some unexpected positives in quarterly as well with the forecasts from the tailings being higher than I expected and exploration results were pretty positive as well.
I think the forecast P/E of 3 whilst cheap, is not totally unrealistic given the broader market sentiment right now and the fact that MLX's earnings will come from only one commodity for the next year or two. The fact that tin prices are at record highs and no one out there seems to think the price is sustainable means the E in P/E could easily fall if these so called analysts are correct and tin prices do come back. This is the problem with having only one revenue generating mine in the stable. If earnings were more diversified than I think the market would be more comfortable putting the stock on a higher P/E.
Everyone in here is a believer in the sustained price of tin (me included) and if and when these high prices start to translate to revenue in the bank for MLX, the market will hopefully start to take note.
I continue to hold and think the stock represents great buying under the 30c mark. If we were still in the bull market of last year I believe this stock would be 60c+ by now. Hopefully the positive sentiment on the resource stocks will come back sooner rather than later and MLX delivers on its forecasts. And of course we hope the tin price continues to rise.
MLX Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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