Interesting result for MGX! Good points 1. Iron Hill is...

Interesting result for MGX!

Good points

1. Iron Hill is profitable - $8 million cash profit for the quarter
2. Inventories grew by about 200,000 tonnes so the cash was restrained by an increase in inventories
3. There is over 700,000 tonnes of high grade ore in inventories of which over 50% is lump and crushed - so another $30 to 40 million worth of inventories
4. The lump price of $US64 is over $80AUD and bodes well for the next 12 months that Iron Hill should be profitable given cash costs are in the mid 40 dollar range.

Bad points
1. Only 294,000 tonnes of DSO lump was sold - not sure why this wasn't higher - given the higher price lump has been getting why didn't the company sell more of it. I accept they're ramping up but to have 345,000 high grade lump sitting in inventories when the price was so high doesn't seem right.
2. Only realised US$64 for the lump - still a very tidy profit but the average 62% platts was receiving around $70US for the quarter - in the AGM presentation it said was receiving a 10-15 discount on higher grade products - lump premiums were on average around 20% for the quarter so why isn't MGX getting a around the benchmark price at the very least - in my view there isn't enough detail on the pricing.
3. Why isn't company buying back its shares - they are trading at a 15% discount to cash before considering inventories, franking credits, Iron Hill and Koolan Island. I believe the board is not acting in the shareholders interests by not doing this. Question is - why.
4. Why are there still ten million shorts? Who are these shorters and why do they think the MGX is going to go lower - are they colluding with the major shareholder and or the board to keep the price down. Seriously MGX has traded below cash for too long to not be suspicious - also very low volatility - smacks of manipulation.

Just goes to show how weak ASIC is and furthermore how gutless private equity is that they don't make a takeover for MGX - its money for jam.

Still intendto hold as once KI is up and running its going to be hard to suppress price - having said that I still think management and the board should be sacked - MGX assets deserve better than this lot.

GLTA/IMHO