Hi @alpaka Looking closely at MRF and it becomes clear it is...

Hi @alpaka

Looking closely at MRF and it becomes clear it is heading for a re-rate methinks. For Example:

Analysis

Peer group analysis and valuation Australian graphite explorers operating in Sri Lanka include Bora Bora (ASX: BBR) which is capitalised at $6 million. Bora Bora holds a 75% interest in its Sri Lanka permits and has recently conducted an aerial VTem survey of Sri Lankan assets and interpretation of results. The other is Viculus Limited (ASX:VCL) which reached an agreement to acquire five exploration licences in Sri Lanka’s Western Province that are prospective for graphite mi
neralisation.

The company has signed a Heads of Agreement to acquire Euro Petroleum, which holds the contractual rights to acquire 70% of Lanka Graphite. MRL is currently capitalised at $2.2 million, holds a 100% interest in its Sri Lankan assets, and has undertaken local EM surveying and has already commenced on site project development with field teams. At this stage of operations both companies should carry similar valuations.

This is equivalent to $0.08 per share at a market capitalisation of $6 million.

On a range of metrics MRL is compelling:

MRL
BBR
VCL

Issued Capital

74.3
24.4
71.9

Market capitalisation $m

2.38
6.09
14.38

Cash (31 December 2013)

1.28
1.42
5.00

Enterprise value

1.10
4.67
9.38

A key point to note is that MRL’s Sri Lankan operation is not a green field exploration. All projects areas have extensive historical workings and remnant graphite. This is resource delineation prior to conversion to a mining licence.

MRL has already concluded nearly all the land access agreements required for exploration and also locked in the land access for potential mining in the Priority 1 area.

Safety training and the implementation of a management safety system are well advanced. All safety and operations are being completed to the standard which would be expected in Australia.

Basically, MRL is on the ground and operating in Sri Lanka, which neither of the above companies are at this point in time.

Risk v Reward

MRL’s projects have low capex and opex requirements.

Production of 5,000tpa of premium quality vein graphite should generate revenues of approximately of US$10m pa.

Capex to achieve this would be

Most other potential producers have capex requirements of $34m and up to $133m. This level is to produce 20,000-50,000 tpa of graphite from grades ranging between 7% to 12% Carbon as graphite.

Source: http://www.mrltd.com.au/attachments...Investors_ResearchNote_MRLCorp-07-03-2014.pdf

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I think the Market is doing their due diligence after MR Grigor's astounding announcement and MRF's Historic News.


What do you think?



Kind Regards