Mt Gibson is transitioning from drawing on lower grade stockpiles to higher grade Iron Hill ore but the transition has affected lower sales in the June Q, with shipment delays also impacting. Low grade price discounting is continuing to have a significant impact, the broker notes.
Iron Hill and Koolan Island should improve price realisation but meanwhile Mt Gibson continues to sit on a pile of cash with no indication of any return to shareholders. The broker retains Neutral and a 37c target.
Target price is $0.37.Current Price is $0.40. Difference: ($0.03) – (brackets indicate current price is over target). If MGX meets the UBS target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).