research note

Research Summary
Maca Limited (MLD) is a niche player in mining services with more than 80% of its contracts focused on production. In our view the main reasons for the recent share price weakness has been a softer outlook for commodities and the prospect of increased operating costs for miners from rumoured budget related cost imposts. The softer commodity price outlook is unlikely to curtail production at MLD’s key contracts including Garden Well (gold) where MLD has an 8 year contract worth A$450M or the mining and crushing contract at Altas Iron’s Pardoo iron ore mine. MLD’s business should continue unabated and management’s track record suggests maintenance of superior operating margins and return on capital. We have no reason to change our 12 month target price of A$3.00/sh and therefore our recommendation changes from BUY to STRONG BUY.