My basic view is the best move the 13.7% who are short can do is to go long in MIN and they'll make a lot of money as MINs will be +$50 by end of Fy 26. And the SHORTS should do it today and go long, as it just gets worse from here for them, because MINs is fundamentally very cheap.
All the Institutional Research Houses will be scrambling today asking the simple question: which liquid stock is the most leveraged to the rising iron ore price: And the answer will come back: MINERAL RESOURCES. So there will be plenty of new sources of research and buying demand for MIN Res today.
Here are the simple analytical reasons. Min Res will now apply the free cash flow over the next year to expand Onslow to be producing 50 m t pa from Fy 27 onwards, where at Iron Ore US 100 the normalised PE is 3.4 X and 4.9 X at Iron Ore $80, and with FOB at $55 and iron ore at $80 which is very conservative 'worst case' scenario, the P/E is still 5.7 X.
Even with Onslow producing at just 35 m t pa, the cash flow based P/E for MINs over the next two years is less than 4, in part because of a number of one off factors: - no effective tax paid over the next two years - $200 m of incentive payments for oil & gas, and $200 m from morgan Stanley ($400 m total) - carry loan being repaid, difference between that and iron ore prepayment is an extra $180 m per year over the next 2 years.
In short, the business is robust and fundamentally very cheap under a range of conservative scenarios.
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