If MLM would have had the haul road approval last year (as it should have had) the SP would have been in the 10 to 12c area. The merger with MLR values MLM at 4 to 5c.
So just by f@cking up the haul road approval we are losing a factor of 2 to 3 in this merger! So no I do not believe this merger makes sense at a valuation of 4 to 5c of MLM. Certainly not with the haul road approval in place now. MLM should be worth 10 to 12c early 2019 when Bauxite is being produced and with MLM still being debt free.
After a merger with MLR it the merged company would no longer be debt free and with the not so convincing capabilities of both management teams it is hard to imagine they can get both projects going in the next months... So again I do not see the sense in this merge. MLM should focus on its bauxite project now and let MLR be. When bauxite is up and running we could revist the MLR merger from a much stronger position. The merger would have made some sense if the haul road was still not approved by now. But since it is management has enough on its hands to focus on and does not need the extra work of coping with a merger and bringing a second mine to operations.
MLM Price at posting:
3.8¢ Sentiment: Hold Disclosure: Held
