A few observations if I may , being a bit of a newbie to MOO ( it's a classic asx code isn't it)... The company has been over sold due to power and water supply and delays in the 100% operational working issues. I view this temporary operational issue as short term and the oversold share price as a result, presents an opportunity to take advantage of a short term weakness as a result of market sentiment. The cap raising at 10.35c was done at a discount to the share price at the time ( about 15c), The current share price is about 3.25c lower than the "sophisticated investors paid" and being less sophisticated than them, I thought 7.1c was a better deal, I only enter company registers initially when the share price is trading at historic lows. In January to April, the share price was trading in the 18c to 22c range and in April to May around 15c to 18c. Monto Minerals was suggested by a hc user who emailed me. Following my research and observing the stock since it was around 15c from memory,I am comfortable with my investment at a time when the company has just raised about $5m at 10.35c, most of which was raised via UK investors from what I can see in the company announcements ( 40,845,000 shares at 5 UK pence). The company report for the last quarter shows options were issued at a forward conversion price of 26.6m at 15UK pence ( about 30c AUS, exp 25/5/09), and about another 11m options varying from about15c to 24c to 45c to convert between 2009 and 2012) representing confidence in the future share price of 50c plus. Recent volumes of 3.17m shares on the 25th june and 1m on the 27th june might represent entry by larger investors but I think most of them ( the UK institutional investors) entered at the placement price of the equivalent of 10.35c. There are now about 383m shares on issue giving a market cap of about $27m @ 7.1c. Not bad for a producing minerals company with a doubling of production planned. The quarterly report revealed a $6m undrawn loan facility for capital expansion, $657k cash on hand, $2.1m deposits at call, $12.657m cash collateralised term deposits securing bank guarantees and a total cash position at the end of the quarter of $15.45m. Capex of about $72m Other good points Monto Minerals has supporting my decision to invest.... 25 year mine life 35% P2O5, 15% P apatite is a unique organic fertiliser 4 minerals spread across 5 different industries Ausmin Australia purchasing 100% of fertiliser 28km2 mine currently in production also stock piling product prime take over target
Risks ? They don't get their water and power supply and production issues sorted out, the new ceo Mike Christie has been appointed for 3 months, what happens if he doesn't get things organised. I expect there will be an announcement this coming week ( based on the news on the 16th june08 saying 2 weeks)giving details of a meeting at the end of July and including an explanatory statement, that may involve a cap raising to fund 2nd stage of capex for 2nd or even third stage of production ramp up.
The company website has some excellent presentations well worth spending 20 minutes viewing.....
http://www.montominerals.com/indreports.html
http://www.montominerals.com/ann08/582052.pdf
One of the local media editorials, from the Monto Minerals web site.... PLANS by Monto Minerals to expand the main processing plant at the Goondicum mine are expected to be released next week. CEO Geoff Moore said the company was negotiating for the expansion and the short term working capital needs during the current period of slower than anticipated production ramp-up. He said he expected the expansion contract to be finalised in late June or July. The CEO said the company is also negotiating further sales agreements, including a long term ilmenite supply, which were linked with the expansion plans. Mr Moore said Monto Minerals was under no financial strain. He said construction of the power line to provide electricity to the site was complete, but not yet running at full network power due to insufficient network capacity. Mr Moore said they hoped to be on network power by September. The CEO, who announced in April he would retire in July, will step down after six years. The Goondicum project produces ilmenite (for paint, paper and plastic pigment), glass feldspar (for glass manufacture), ground feldspar (for paint and powder coating), apatite (for organic fertilizer) and titanomagnetite (for coal washing) for Australian and overseas markets.
MOO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
