MIN - Mineral Resources

[rcw1]

Good afternoon
5 year (approx) low on Friday (28/02/25) @ $22.21
5 minute

Announcement attached 28/02/25:
Update on Onslow Iron progress, and comment on a 2023 technical review the Company understands may have been provided to third parties without the Company’s consent.

Not holding

Kind regards
rcw1

 

[divs4ever]

am VERY tempted to weld the MIN holding to the bottom of the bottom drawer
have recovered the investment cash more than twice over , wake me up @ $13 and i will consider IF to add more

BTW it got down to $12.90 in October 2019 , there is still room to fall more

 

[rcw1]

Three charts reveal how MinRes’ Ellison is feeling the market’s wrath​

Alex Gluyas and Peter Ker for AFR

Feb 27, 2025 – 4.04pm

Mineral Resources’ beleaguered founder and managing director Chris Ellison has been battling spot fires on all fronts and is now feeling the wrath of financial markets.

This week, the miner became Australia’s most shorted stock as hedge funds heaped more pressure on the share price, which has collapsed 30 per cent this year. MinRes bonds have also slumped as lenders lose confidence in the company’s ability to repay its loans.

The heavily indebted diversified miner and crushing contractor is already contending with weak prices for iron ore and lithium as well as a cost blowout at its flagship Onslow private road that it uses to haul product to port.

As the once formidable Ellison bats off questions about whether MinRes needs to raise equity, he is also being investigated by Australia’s corporate regulator amid allegations of corporate failings and a related party transaction first revealed by The Australian Financial Review in October.
Shares in the former market darling have since tanked 49 per cent to $24.17, jeopardising Ellison’s billionaire status. His 11.5 per cent stake in MinRes is now worth about $558.9 million compared with $2 billion in 2023. He would officially lose his billionaire title if the shares drop to about $21, according to a Financial Review Rich List analysis.

Updated: Mar 2, 2025 – 3.07pm. Data is 20 mins delayed.

The share sell-off accelerated last week after the miner axed its interim dividend and reported a first-half loss of more than $800 million, double what analysts had been predicting. The stock tanked 20 per cent on the day.

With the company’s net debt now sitting around $5.08 billion, investors have long pondered how it would repay the loans when lithium and iron ore mines are struggling to break even amid weaker commodity prices. Those concerns were exacerbated when MinRes admitted last week that it would cost $230 million to repair and resurface the weather-damaged Onslow haul road .

That extra spending has struck fear into the hearts of MinRes’ lenders, triggering a slump in the market price for the company’s bonds due for repayment in May 2027.

The price at which bonds trade is an important indicator of sentiment, and last week’s nosedive took the price of the May 2027 bonds to their lowest level since December 2023. Other MinRes bonds have also slumped to their lowest level since September.

Shorts are circling​

The disappointing earnings and balance sheet concerns have caught the attention of hedge funds, triggering a huge spike in short positions. Short selling is a strategy used by funds to profit from a falling share price by borrowing the stock from existing holders and selling it, and then buying it back at what they hope will be a lower price.

The amount of MinRes shares out on loan jumped from 13.1 per cent to 19.24 per cent between February 14 and February 21, making it the most shorted stock on the ASX, according to S&P Global Market Intelligence.

MinRes Shares outstanding on loan (%)

That bumped uranium producer Boss Energy to second place, which has 16.1 per cent of shares out on loan, followed by fellow uranium miner Paladin Energy at 15.7 per cent.

The surge in short positions could be a bet that MinRes could try to solve its debt and liquidity problems by issuing more shares. Short-sellers often target companies they believe will need to raise capital via a share issuance because the extra supply tends to depress the share price.

Investors have long assumed that MinRes would never issue new shares as long as Ellison remained at the helm because, as the largest shareholder, he would have to spend his own money to afford his allocation of shares, or face dilution that would shrink his stake. But a looming leadership reshuffle could change the company’s mind. According to MinRes’ official plan, Ellison will cease to be an executive by April 2026, and chairman James McClements will depart this year.

Ellison was asked by Barrenjoey analyst Glyn Lawcock last week whether he would support a share issuance if the next chairman of MinRes demanded one this year. He could only say that he would support the chairman.

 

[TimeISmoney]

People are still accumulating by looking at it, the volume is up.

Most of the large broker firms are downgrading iron ore miners, so it's like going near someone with the plague at this stage.

Iron ore being so cyclic, one day it will take off again and make the holders rich.

am VERY tempted to weld the MIN holding to the bottom of the bottom drawer
have recovered the investment cash more than twice over , wake me up @ $13 and i will consider IF to add more

BTW it got down to $12.90 in October 2019 , there is still room to fall more

You got to be the bargain hunter of the century.

 

[rcw1]

People are still accumulating by looking at it, the volume is up.

...

Yes indeed so, all last week, especially on the Friday ... very interesting times

Not holding

Kind regards
rcw1

 

[divs4ever]

People are still accumulating by looking at it, the volume is up.

Most of the large broker firms are downgrading iron ore miners, so it's like going near someone with the plague at this stage.

Iron ore being so cyclic, one day it will take off again and make the holders rich.

View attachment 194513

You got to be the bargain hunter of the century.

am doing what i can to rank in the top 100

BTW the DANGER is getting part-filled orders

i got bitten like that with IDX a 12 month low but only a handful of shares ( and goes ex-div. this week so that order is liable to be purged )

 

[finicky]

People are still accumulating by looking at it, the volume is up

Yes indeed so, all last week, especially on the Friday

Not the same as my charts? Bigcharts and CommSec charts agree that this week was a very heavy volume red candle with the weekly close well down on prior week's close. High negative volume isn't a sign of accumulation in most cases I would say? While it might be 'capitulatory' volume it's yet to be confirmed (assuming my chart's are right). certainly a stand aside for me until positive signs - if I were interested to own MIN that is.
From what's been said here, some might fear a capital raise to fend off creditors? Personally I went off MIN when it diversified into lithium.

Not Held

WEEKLY

 

[divs4ever]

i am in a very cosy position here ( free-carried' plus a bit ) up 63% on my average buy price and took some profit off the table as lithium excited the late-comers

so the question for me , is do i buy some more IF it capitulates , sit tight , even wait and see if a cap. raise underwhelms ( another favourite tactic ) OR take the profit off the table in any decent rally

iron has a future ( but that will be bumpy ) lithium might be just as tragic as nickel , time will tell ... but these roads .. i can tell you from the local ( MAJOR transport route ) highway , they don't repair roads like they used to ( this one is breaking up again before they even get to paint the new lines )

MAYBE the road repairs is the thing to watch

 

[TimeISmoney]

Not the same as my charts? Bigcharts and CommSec charts agree that this week was a very heavy volume red candle with the weekly close well down on prior week's close. High negative volume isn't a sign of accumulation in most cases I would say? While it might be 'capitulatory' volume it's yet to be confirmed (assuming my chart's are right). certainly a stand aside for me until positive signs - if I were interested to own MIN that is.
From what's been said here, some might fear a capital raise to fend off creditors? Personally I went off MIN when it diversified into lithium.

Not Held

WEEKLY
View attachment 194515

Where's the increased volume of shares going?

Most people don't acuminlate at high prices, they accumulate when it's low. I see it with FMG and BHP all the time.

 

[rcw1]

Not the same as my charts? Bigcharts and CommSec charts agree that this week was a very heavy volume red candle with the weekly close well down on prior week's close. High negative volume isn't a sign of accumulation in most cases I would say? While it might be 'capitulatory' volume it's yet to be confirmed (assuming my chart's are right). certainly a stand aside for me until positive signs ....

Hey there @finicky lovely to hear from you. Have a look at post 261 and the RSI index upon one minute ... rcw1 confident plenty of buyers, with volume not even an indicator for rcw1 on this occasion. Anyways ... rcw1 thoughts bloke

Kind regards
rcw1

 

[rcw1]

i am in a very cosy position here ( free-carried' plus a bit ) up 63% on my average buy price and took some profit off the table as lithium excited the late-comers

so the question for me , is do i buy some more IF it capitulates , sit tight , even wait and see if a cap. raise underwhelms ( another favourite tactic ) OR take the profit off the table in any decent rally
....

are yes this is a very good place to be in ... oh the excitement ...
you will choose the correct direction, no doubt... steady steady bloke ...
just like rcw1 on the track ha ha ha ha ha ha ha

Kind regards
rcw1

 

[divs4ever]

Where's the increased volume of shares going?

Most people don't acuminlate at high prices, they accumulate when it's low. I see it with FMG and BHP all the time.

well that is what i try to do , but then folks call me contrarian

 

[TimeISmoney]

well that is what i try to do , but then folks call me contrarian

It's only logical Divs. I reckon you're one of the wealthiest on here, just humble about it.

You're not going to get FOMO entries when the SP is dropping faster than a brick, new entries are highly unlikely when mainstream media are predicting doom and gloom for iron ore price every other day of the week.

So who does that leave to buy up, most likely large holders that have held for years.

 

[divs4ever]

It's only logical Divs. I reckon you're one of the wealthiest on here, just humble about it.

You're not going to get FOMO entries when the SP is dropping faster than a brick, new entries are highly unlikely when mainstream media are predicting doom and gloom for iron ore price every other day of the week.

So who does that leave to buy up, most likely large holders that have held for years.

luckiest more like it , but i only had one big pile of cash to deploy and no easy way to rebuild it if it all goes wrong

luck and desperation are a potent mix

but indeed those who have seen low prices before are not so terrified of another 10% drop ( providing the company is making wise choices )

 

[farmerge]

are yes this is a very good place to be in ... oh the excitement ...
you will choose the correct direction, no doubt... steady steady bloke ...
just like rcw1 on the track ha ha ha ha ha ha ha

Kind regards
rcw1

@rcw1 unbeatable at the track!!!

 

[finicky]

Where's the increased volume of shares going?

Well it's just the way I look at it but if volume is up and the red candle 'body' is not small it says to me that buyers are only stepping up if offered lower prices. Where it would suggest to me that accumulation is happening in a downtrend is if you're getting higher volume but the closing price is close to the opening price (small candle body). That would suggest to me that the the bidders might be seeing value or a likelihood of a low being near because they are close to meeting the offer. As an example I looked at the Pilbara Minerals chart: you could ask of that high volume bar for the last month of November, "where is the increased volume going?" If they were accumulating it was not at the optimal time.

Have a look at post 261 and the RSI index upon one minute

Checked it out rcw1 and saw your 5m rsi divergence but I'm looking for a major reversal in a stock like this so I focus on a weekly or monthly chart for clues. You are probably looking for a short term trade.

WEEKLY Pilbara (PLS)

 

[rcw1]

Well it's just the way I look at it but if volume is up and the red candle 'body' is not small it says to me that buyers are only stepping up if offered lower prices. Where it would suggest to me that accumulation is happening in a downtrend is if you're getting higher volume but the closing price is close to the opening price (small candle body). That would suggest to me that the the bidders might be seeing value or a likelihood of a low being near because they are close to meeting the offer. As an example I looked at the Pilbara Minerals chart: you could ask of that high volume bar for the last month of November, "where is the increased volume going?" If they were accumulating it was not at the optimal time

Enjoyed reading your comments.

rcw1 is mindful of accumulation zone as opposed to a distribution zone. Accumulation zone in rcw1 terms, for mine, happens when the price remains fairly stable. STX is a perfect example, of late. The accumulation area is dominated by sideways price movement on above-average volume.
Your comment, "... are close to meeting the offer", is true. Fast traders look intently at high point and low point and whether or not momenteum engagement will break you on through resistance level (s) and onto that pot of gold... bypassing quickly that sideways movement... and or the stock dying in the arse ...stock price divergencies / fluctuations moreover volume are inextricably interwoven ... and require constant monitoring and real time evaluation.

Checked it out rcw1 and saw your 5m rsi divergence but I'm looking for a major reversal in a stock like this so I focus on a weekly or monthly chart for clues.

Very good.

You are probably looking for a short term trade.

Reckon so bloke...

Kind regards
rcw1

 

[TimeISmoney]

 

[rcw1]

View attachment 194528
View attachment 194526


View attachment 194527

@TimeISmoney ahhhhhhhhh looks like you and I missed the cut ha ha ha ha ha ha ha ha

 

[rcw1]

Leaked report a glimpse into MinRes’ troubled road to nowhere​

Slicing through the Pilbara at a cost of hundreds of millions of dollars, the Onslow road, which opened last year, was meant to be paved with gold. Instead, it is crumbling.

Mark Wembridge and Mark Di Stefano for AFR
Mar 3, 2025 – 5.00am

The radio chatter started just a few hours after the maiden road train left Mineral Resources’ flagship Pilbara iron ore mine bound for a port 147 kilometres to the west. The surface of the company’s new road was already deteriorating, the truck drivers warned each other.

It’s no ordinary road. Described by MinRes, a major diversified miner and contractor, as one of the country’s “most impressive pieces of transport infrastructure”, the Onslow haul road is the only way to get the iron ore from the company’s biggest mine, Ken’s Bore, to its customers.

To achieve MinRes’s shipping targets, triple-trailer road trains each weighing more than a fully laden Airbus A350 aircraft have to leave every five minutes, every hour of the day, for the next three decades.

The haul road was only officially finished late last year. So how could it already be crumbling? Since August, five trucks have crashed on the road network, MinRes has slashed iron ore production forecasts, and new costs have emerged.

Last month, MinRes shares slumped more than 20 per cent in one day after the company said it would have to spend $230 million repairing and resurfacing the road. That revelation left investors and brokers asking if MinRes had taken too many risks with its $3 billion Onslow project.

Mineral Resources said it needs to repair and resurface its 147-kilometre iron ore haul road.

But MinRes, which is run by billionaire mining mogul Chris Ellison, has had plenty of warnings about the road, and the mine and the port. In one report handed to the company last February and obtained by The Australian Financial Review, Min Res is warned over 225 pages and two dozen examples that it was underestimating the project’s risks. The report, by mining advisors AMC Consultants, has never been released.

It is that report – known as Project Mulloway, a nod to the game-fish found in Western Australian waters that are favourite of Ellison’s – that estimates that a truck has to leave every five minutes around the clock to hit MinRes targets. That would mean, AMC concluded, “more than 550 ‘truck passing interactions’ every hour on the haul road, day and night”.

“Any disruptions along the haulage path, or at the port, will require this departure interval to be reduced in order to catchup on the lost loads,” the report reads. In other words, so much hinges on so little going wrong.

Last year was a difficult one for Ellison. The Financial Review revealed the blunt-speaking billionaire from New Zealand’s South Island had engaged in an extensive offshore tax evasion scheme, a move that had also enriched him at the expense of the company he founded. A board review found he had ordered company employees to work on his boat and manage his finances. He apologised and said he would resign by the middle of 2026.

MinRes chairman James McClements is also leaving. Meanwhile, the Australian Securities and Investments Commission is in the midst of a formal investigation into the company’s handling of the tax issues.

But it is the Onslow road that threatens to bring the company undone.

An existential gamble​

MinRes staked almost everything on its private haul road between its Ken’s Bore mine and the port near Onslow. Other Pilbara iron ore producers – Rio Tinto, BHP, Fortescue and Gina Rinehart’s Roy Hill – use rail to connect mines to port. MinRes opted for a road, due to the huge cost of building rail infrastructure to Ken’s Bore, a more isolated site than other projects.

But the construction of the Onslow project has saddled MinRes with big debts. To service the $5.8 billion it owes, the company needs regular cash from taking the iron ore along the road to port and to customers.

MinRes was founded by Chris Ellison. He says he will step down next year. Trevor Collens

MinRes, in which Ellison still has an 11 per cent stake, has often marvelled at its own project. When the first iron ore was shipped, in May, the company said it was a milestone achieved less than a year after ground was broken at the Ken’s Bore mine. The “innovative mining and transport infrastructure” was designed and built by MinRes, the company said.

Ellison has previously said the road was built to exacting standards and was designed to withstand the Pilbara’s torrential cyclonic downpours. This year, he blamed those downpours for damaging the road, forcing a costly upgrade from bitumen to asphalt. It was “once in 40-year” bad weather, he said.

The road, the construction of which was brought in-house after contractor QH & M Birt walked off the job over concerns about the quality of materials used, was “about 95 or 96 per cent right”, Ellison added.

The AMC report estimated that the total cost of the project’s “haul roads, overpasses, bridges and tunnels” was $568 million. That would mean the repair bill is about 40 per cent of the original price.

Long-time Pilbara road construction managers are sceptical about the $230 million repair price tag. Speaking on condition of anonymity, they said the bill should be at least $100 million higher for such major work.

“It’s underquoting. If they’re going to redo the whole road, a conservative cost is about $2.3 million per kilometre. The road is rutted, which means that the sub-base is moving, and there is deformation further down. Asphalt will not fix anything because the base needs to be done first,” they said.

A passing risk​

The AMC report was commissioned as part of a process to sell half of the road, and a long-term revenue stream, in a bid to cut MinRes’ debt. It warns that the width of the road was not ideal for such large trucks. The lanes are four metres wide. The trucks are 2.5 metres wide. That meant there was only a small gap as the trucks passed one another, increasing chances of a collision.

“Assuming the [trucks] try to drive in the middle of their lanes, this only leaves 75 centimetres on either side for clearance. Two passing [trucks] will have only 1.5m of clearance,” the report reads. “Wind forces, poor vision, and normal trailer sway ... could reduce this clearance distance significantly, especially if the [trucks] pass during cornering.”

There have been a number of truck rollovers on the road.

At speeds of 70 kilometres per hour, trucks would pass each other every 2.5 minutes – something AMC considered “a major risk to the project given that the 148km haulage route is the major lifeline of the project”. About 80 trucks currently operate on the road. It is expected to rise to 110, with ambitions to eventually run fully autonomous trucks on the route. To get its ore to overseas customers on time, MinRes would have to load a 200,000 tonne vessel every 54 hours. Its 220,000-tonne storage space at the port amounted to just over two days worth of haulage.

The AMC consultants made other observations, too. There was a “lack of road drainage criteria and modelling”, they said. “[Mineral Resources] cost and revenue assumptions are opaque, based on internal historical data and Onslow joint venture negotiations,” the Project Mulloway report added.

In a statement on Sunday, a MinRes spokesman said “no fatal flaws” had been identified, and adding that upgrade works were going on including cement stabilisation of some sections and asphalting of the entire road.

“MinRes is confident these measures will ensure the haul road can withstand the unique conditions, deliver nameplate haulage capacity and significantly decrease maintenance costs over the long term,” he said.

“The review identified a number of risks within the study, which were responded to in full and were considered in detail by MinRes in the finalisation of project planning. Many matters identified by the review were resolved in the design, construction and operational schedule of the project.”

Morgan Stanley rides shotgun​

Last year, Morgan Stanley Infrastructure Partners, an investment unit of the Wall Street bank, paid $1.1 billion for a 49 per cent stake in the road. MSIP could tip in another $200 million should certain haulage targets be met.

(The road also operates as a private tollway that can be used for a fee of $8.04 per tonne of iron ore that passes along the route.)

In its Friday statement, MinRes said the consultant’s report has been available to prospective buyers of the stake in the road who had “considered the review and MinRes’ response to identified risks, and conducted due diligence with the support of their own independent experts”.

Last month, in a call with analysts, Ellison was more defiant. MSIP, he said, had no recourse to claw back its money should MinRes fail to meet its forecasts for haulage along the road. “If I could get youse to more focus on the share price – if you could get that up that would get my debt ratio down – that’s your part,” Ellison told the analysts on the call.

There are now unanswered questions about whether MSIP insisted on putting “take or pay” provisions into its contract with MinRes. They would guarantee revenue from MinRes regardless of how much iron ore is transported along the road. Morgan Stanley has consistently refused to comment and has directed questions to MinRes.

“It’s a sad confluence of a conflicted management team and chair who do not appear to have always acted in the best interests of shareholders,” says Jarden analyst Ben Lyons, whose long term – and accurate – bearish outlook on MinRes has attracted the ire of Ellison,

“A company whose cash flows are entirely at the mercy of two commodity prices – lithium and iron ore. There’s poor disclosure, and a completely inappropriate balance sheet structure which is over-geared and now also displaying short-term liquidity issues.”

Lyons noted Onslow was critical to MinRes’ attempts to solidify its balance sheet because it “is vastly more leveraged to iron ore prices than lithium”.

Investors have followed Lyons’ advice and savaged Ellison and MinRes over explanations around the road. The company’s shares, which nudged $80 last May, are now changing hands below $23. A new group of short sellers – investors who bet on the share price to fall – have arrived, making MinRes the most shorted on the ASX, according to S&P Global Market Intelligence.

With a market capitalisation of $4.5 billion, MinRes is worth less than its $5.1 billion net debt, increasing the prospect it will raise money at a depressed price.

“The market has become keenly aware that MinRes is carrying far too much debt for a commodity producer, and with the equity value now trading well below net debt, an equity recapitalisation becomes increasingly difficult ... and increasingly dilutive,” said Lyons. “We expect further underperformance even without factoring in the potential for equity dilution.”

MinRes said: “We have a number of other levers at our disposal to release further capital if needed, and we are not contemplating raising equity."

It was a road that was meant to be paved with gold for MinRes. Instead, its Onslow project is yet another headache for the already beleaguered Ellison.