Generally agree with you Philley, the SCONI JV with AUZ was good a outcome (both AUZ and MLM) as MLM held all the cards with 100% ownership until AUZ delivered a DFS or sAUZ pent $10M on SCONI planned completed around April 2018, MLM would have gained a lot of value adding (as now seen in market ~$200m) and regular hot newsflow from AUZ activities progressing SCONI plus the market was hot for cobalt many months ago as was improving sentiment for scandium and more recently nickel is now out of the dog house and outlook for price very good so stars are aligning for Co SC Ni metals and projects.
MLM said had more than enough cash and facility available in readiness for completion development of its 50% bauxite interest as well as several months working capital so there was need to sell major assets so cheap and so early.
the smartest strategy would have been to negotiate the MLMs 100%/50% sale soon after AUZ completion of the DFS that way had better understanding market wise of the asset value and would be many multiples more than the very low ball $5M cash and shares total value (with trailing $5M payment on SCONI production which could be several years away at least) could got much much better sale price plus also added a trailing metal royalty of future metal production for further shareholder upside (which could also be sold at later time) all this value and upside now lost - really dumb decision by MLM to sell 100% the way it did.
I think MLM worth a lot less now than it was few months ago plus IMO MLM not going to get significant cashflow till mid 2018 is my guess and hence sold down my position to a much smaller holding, glad I did, because I don't see it going back to 6-7c levels for some time, well not until MLM at least derisks the bauxite and development is certain this next time (after several missed targets) now Targeted Q2 2018. so in essence 3 strikes I am out (No SCONI, No early cashflow from bauxite and thirdly poor decisions) MLM does not qualify my investment anymore but still on my watch list 50 or so small caps, so maybe better timing and price wise early Q2 2018 maybe at this stage. IMO and DYOR
MLM Price at posting:
4.8¢ Sentiment: None Disclosure: Held
