I have not posted for a few months, is MOL a sleeper with a lot of potential.
In one word YES, but there always seems to be a but with MOL. The high Aus$, the depressed moly price and the current state of the worlds economy is a uphill battle for the company.
They need at least $200mil more finance probably closer to $300mil to bring the moly mine on stream. Most pundits predict that the moly market will be very tight over the next five years. That the price of moly may even return to pre GFC prices. So if the company can come up with the extra dollars they could be in production at the right time, its a gamble.
On the plus side we have a very profitable Iron Ore mine, lets give credit where credit is due. This company built this mine in record time and on budget. The mine paid for itself in 4 months. They are well on target to shipping 1mil tons this year. I think its fair to say they are netting around $60-$70 a ton. Although its only a small deposit, over a five year period it adds up to a tidy cash flow.
How long before we hear any further news, that's the question. What becomes of the options and loan with regards to Hanlong, am I right in assuming that if the $500mil loan is not drawn down by Dec2011 they forfeit part of the $60mil loan and options. Or will the company extend the agreement yet again?????
MOL Price at posting:
54.0¢ Sentiment: Hold Disclosure: Held
