MGX – UBS rates the stock as Neutral

Instability at the Koolan Island mine has led to the temporary suspension of production, forcing Mt Gibson to downgrade FY15 production guidance by 9%. Remediation is expected to take three months and cost $5-10m. The broker has cut its FY15 earnings forecast by 60% and suggests the 2c interim div is unlikely now given low iron ore prices and Koolan problems.

Read More

Mount Gibson In Best Shape Among Juniors, Relatively

Iron ore junior Mount Gibson Iron (MGX) stands out among its peers because of its cash holdings. This situation is expected to stand the stock in good stead while the iron ore price remains under pressure. Mount Gibson is highly correlated with the iron ore price and Credit Suisse observes it tends to outperform in a higher iron ore price environment and be somewhat resilient in a lower price environment, because of its comparatively high grade and quality product mix.

Read More

MGX – UBS rates the stock as Neutral

UBS described the interim result as messy. The broker’s main question is about the increasing cash balance. The company has spoken of potential growth opportunities and intends to maintain a large cash balance for leverage. Hence, the broker suspects there will be no significant increase in returns to shareholders in the near term.

Read More

What To Do With Mount Gibson’s Cash Mountain?

All cashed up and raising queries about where it should be spent? It can’t be a miner, surely. Yes, it’s Mount Gibson Iron (MGX). The Western Australian iron ore miner is sitting on a cash pile of around $400m and brokers are busy evaluating the options. The company is exclusively an iron ore miner, with three mines in production, although one is due to wind down next year. Acquisitions are on the agenda. After a strong September quarter, where 2.6 million tonnes of iron ore was sold, the company reiterated FY14 guidance for sale volumes of 9-9.5mt.

Read More

An Opportunity In Mt Gibson?

Mt Gibson Iron (MGX) currently enjoys a 3/2/0 B/H/S ratio in the FNArena database, and an average target of $3.90 against a last trade of $2.92. Brokers are keen on Mt Gibson because (a) it is an iron ore producer, (b) it has excellent, capital-efficient production growth, (c) it is an iron ore producer, (d) it is trading at an attractive multiple and (e) it is an iron ore producer.

Read More