Perhaps my post was a bit harsh . Why I get frustrated is I think we as shareholders sometimes oversimplify how hard it is to make Strategic moves. Don't forget that another than about the last 4months , the IO price was in free fall and MGX needs to be thinking about the next 5-10 years. The cash balance although great needs to be offset against liabilities and fortunately these have fallen substatianaly as cash has increased, but it's the last 2 months whereby I can say MGX has room for some capital management as relative to 12 Months ago liabilities are about 30M less and cash about 30m more. I don't think they are hoarding cash , i think they are looking for good value opportunities while recognising these opportunities is what will drive future earnings a lot more than IO earnings.
Now what I would love to see MGX move into in order of priority
1 zinc - bullish outlook and mining process similar to expertise
2 uranium - bullish outlook but not sure how many projects up for sale or investment
3 gold - easy to Analyse and AUD good price robust
4 agriculture - I doubt they will look here but GRR are open to such a change
Having an average of 20c I wouldn't mind a large capital distribution , but I feel a good acquisition could see a SP North of 40c quickly,whereas a capital distribution may result in realised value
of 28-30 c. This Quarter should be one of their strongest in over a year, and if we can get to 355m by end of June and maybe 380 -385 after insurance payout, i will be very happy . The cash accumulation can't remain on balance sheet for ever, as after Iron hill, they will need the next project to generate revenue.
The market see MGX as an IO stock , I see it as a resource stock that is 55-60% undervalued as I see the market rerating it to a acquisition value once they make their move
MGX Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
