research on mdx

I have done a bit of digging around, looked at some of the old ANNs from MDX and taken on board some of the comments on the forums and tried to put everything together in one post. A sort of reference point as to where things stand now:

First of all the simple stuff:

Number of shares : 56,428,467
Number of options : 26,214,224 – options mature 30th June 2008 exercise price 20c
Employee options: 700,000 – options mature December 2008 exercise price 25c

So at today's close of 19c we get the following mkt cap:

Undiluted: $10,721,408
Diluted: $15,835,111

Although of course the diluted mkt cap is only applicable once the heads go over 20c and if you take the employee options into account full dilution will only happen with the heads above the employee strike price of 25c.

Full exercise of the options in June of 2008 will raise $5,242,845 for the company with a further $175,000 coming at the end of 2008 once the employee options are exercised.

MDX is focusing on Uranium, Iron and Gold.

First the Iron

The ANN of 12th September describes the Mr Forrest iron formation as:

Extending over 17Km in length, widths up to 2km, within this there are “Mount Mason type targets” of 500m X 100m in areas of “intensive faulting of silicecous iron formation.”

Traversing of 3 selected wide spaced sections indicates multiple silicecous hermatite-magnetite units varying from 30m to 200m in thickness.

Samples confirm very low levels of contaminants.

Finally, Mt Forrest is 60 Kms from Jupiter's Mt mason hermatite deposit.

The ANN of 12th September also states that results from the systematic mapping and surface sampling are expected in early to mid October.

That means results are due out now.....one recalls JMS releasing an ANN last November and (admittedly with the help of nice Mr Talbot) seeing their SP shoot up to 40c from mid teens and more profitably causing the JMSO options to go from 2c to 20c in one week.

Lets face it with MDX, a 17Km long strike with widths upto 2km and a thickness varying between 50m and 200m is certainly not to be sniffed at if the grades are good. As MDX keeps describing the formation as a “Mt Mason type” deposit then perhaps good grades are a strong possibility. The sampling should give us a big clue here and as already mentioned the sampling results are due early to mid October.

Could one reason for today's action mean a juicy ANN is imminent? .... Just a guess....

Uranium project.

MDX has a JV with Heathgate Resources (itself somewhat unusual for such a small junior). Heathgate of course also had a JV with AGS – they went from 5c to more than $2. The project is using sampling of groundwater to use it as an indicator for identifying drilling targets should help speed up the discovery of prospective U308 deposits.

For more details on this do see the ANN of 10th October – warning it is a bit complicated but nevertheless a good read.

The U308 project JV has area of interest of 100,000Sq.KMs of which 5,500Sq.Kms has been granted tenure.

A further 12 applications covering 2,800Sq.Kms have also been lodged where paleodrainages (again using water sampling to identify targets) are considered prospective for roll front uranium.

Gold Projects

MDX has a number of prospective gold tennements under development, The most interesting of these being the Bulga Downs project.

Bulga Downs is described as currently having 36,000 ounces of indicated / inferred gold. What makes this interesting is that the April 2007 quarterly staes that this area includes a “mineralised structure” that reurned drill intersections greater than 3 g/t over 10Kms....a fair bit of potential there then.

At Bulga Downs MDX has their Toucan Gold prospect. Some grading from this area includes:

3m @ 6.17 g/t from 14m
1m @ 21.2g/t from 56m
13m @ 2.93g/t from 35m

The ANN of today was the rather pleasing news that MDX have just started drilling 10 further holes at this prospect.

For details of all the gold projects underway you will have to read the July quarterly.

The only top 20 I could find was from 2006 so it is a bit old but that gave figures of 46% of the heads and 46% of the oppies were held by the top 20.

The 3 main Directors of MDX hold the 12,885,822 heads and 5,632,410 oppies between them. This means the 3 directors own between them 22.8% of the issued heads and 21.5% of the issued oppies.

Our of the three main areas the Iron project looks potentially huge. Remember an ANN is due early – mid October giving further details on the Mt Forrest Fe project with more grades expected from the sampling. It is 17KMs long and upto 2KMs wide.

The gold drilling started today and the U308 project with Heathgate certainly look exciting.

Today about 10% of the company changed hands with a 65% rise is the SP and an 83% rise in the oppies yet the company is still only valued at $10.7mn

The upside is obviously huge. The oppies have a strike price of 20c and at the 4.4c close offer 4X leverage and almost 9 months to maturity.

Looking forward to a juicy ANN on the Fe next week.... now what will that do to the SP?

Guess what ... I bought quite a few of these today ;-)

EB