Melior starts Production on schedule!!, page-4

I agree that from a debt situation the deal is well and truly better off for Melior, however from a projected EBITDA perspective the deal is not unreasonable... Refer a post of mine from 13/9/18 - on a EPS or operating cash flow perspective the merger does give scale, and does increase the merged entity EPS (post merger). The only problem is that Goondicum is high risk, as some others have stated the operation shutdown due to this risk, however Bauxite is low risk, easy operation, limited resource refining and low risk... 

Looking back in 2 years, we'll know whether or not the merger was good, but until then you have to use the PFS financials as gospel, because they have been put together by trained professionals. My current opinion of the situation - let's get on with a focus on production from both operations. Also, MLM are by far still one of the best micro cap investments on the ASX right now, near term cash flow from Urquhart point, cash in bank to develop UP, AUZ share that can be disposed of to bring UP into production also, a MC of only $10M and forecast operating cash flow of A$15Mpa... 

**Previous Post **

The merger actually increase EPS if you use the estimated forward NPV...
- MLR have NPV8 of USD$46 (~A$64M) -- Therefore 74% of NPV share
- MLM have NPV10 of A$22M -- Therefore 26% of NPV share

Previously MLM NPV of A$22M shared by 302M shared = 7.3c EPS on NPV basis
Now with the merger combined NPV of A$86M shared by 882M shared = 9.7c EPS on NPV basis

I know using NPV, which is a future earnings estimate, is not a great basis to use - however it is the only basis we have to use given that neither mine is generating any revenue... Therefore post merger MLM holders actually have potential for 33% (9.7 / 7.3) additional EPS based on the NPV forecasts... Which are just forecasts, on paper, nothing more...

The only issue is that no consideration has been given to MLM potential outside bauxite - graphite, HMS and silica - now maybe this is because they are not worth anything, as other posters have said... which is hard to argue with when there is a HMA plant sitting in Brisbane doing nothing...

As I have said before, can be very frustrating investing in micro caps - however MLM now will have circa $30-40M market capitalisation with 1 operation running and 1 waiting on final haul road approvals... Possibility to have c. A$34M in operational cash flow... Don't expect ramp up straight away, but info is based on published prefeas studies...
- Goondicum: USD$80/t margin * 160kT = ~A$19M operating cash flow per year
- Urquhart Bauxite: A$10.5/t margin * 1.5MT = ~A$15M operating cash flow per year

Still in my mind one of the better micro cap investment options right now, with near term revenue potential...