MDX - Mindax Limited

[countryboy]

Its very pleasing to do a bit of research, make an investment and watch it flower. I expect the news to gather momentum as we push towards June. Pity other market forces may well impact on the advances we would have seen if this was say Feb 07.

 

[dumpty]

When do options expire?

Sitting on a heap from late last year.

Looks like VRE losses may be nullified.

 

[metal guru]

theres some serious speculation going on about this region (JPT,MDX,IRM RRR)- and a consolidation premium is starting to emerge.

not sure if this is the right forum to discuss as there dont seem to be too many contributors - iare there any busier Aussie chat rooms??

or do more read than post??

MG

 

[Sean K]

theres some serious speculation going on about this region (JPT,MDX,IRM RRR)- and a consolidation premium is starting to emerge.

not sure if this is the right forum to discuss as there dont seem to be too many contributors - iare there any busier Aussie chat rooms??

or do more read than post??

MG

Depends on the stock MG. Once the word gets out something is undervalued or had potential people start to get interested.

Outstanding breakout category this one.

 

[YOUNG_TRADER]

Hey mate thanks for the image and thanks mods for making it work

There certainly are some interesting neighbours,

I wonder what Red Rock have found on their grounds that make them like MDX so much?????

Perhaps they have found something that is close to their southern border that may appear to cross into MDX's ground????

Who knows, maybe they just like the name Mindax :

Well in hind sight it looks like this was the case,

I now have no doubt that Red Rock have found something of great interest that most likely extends/continues into MDX's Mt Alfred tenements, why else would Red Rock spend their money buying 7.5m MDX shares?

To me this validates and somewhat inhances the prospects of MDX's target claims, ie Red Rock believes it

Now its hard to put a value on this as it is an exploration target, but considering MDX's closest comparative peer is FDL a comparison can me made between the two

FDL​

Mkt Structure

Shares
950m + 380m 10c options


Mkt Cap @1c = $9.5m Pre estimate
Mkt Cap @15c = $200m Max
Mkt Cap @10c = $135m Current


Cash $6m + $8m in listed investments


Projects

Hamersley Project Iron Ore Hematite, 100%, Pilbara W.A.

This project is next door to FMG's huge discovery and thus nearolgoy and continuation of FMG's deposit is playing an important role in validating the target size of FDL's project

They estimate 325Mt's - 390Mt's @ 56% = 180Mt's - 220Mt's Iron Ore

Given the current Mkt Cap of minimum $135m, the EV being used is 60c - 70c per target tonne of Iron ore resource

MDX​

Mkt Structure

Shares
485m


Mkt Cap @12c = $10m Pre estimate
Mkt Cap @45c = $50m Target lower
Mkt Cap @70c = $70m Target upper


Cash $3.5m + $7m if options exercised



Projects

Mt Alfred Iron Ore Hematite + Magnetite, 100%, Mid West W.A.

A target of 650Mt's-750Mts @ 57%-63%Fe = 370Mt's DSO - 470Mt's DSO Hematite in Ground Value @ $100/t = $37Billion - $47Billion

Valuation method 1
Now this is an exploration target so the instead of using the usual rule of 10% of I.G.V. we should be conservative and use 1% of I.G.V.

1% In Grond Value of TARGET = $370m - $470m = $3 - $5 depending on option conversion future raising etc, now this figure is ridiculous given the current share price so lets be ultra conservative and attribute 0.2% chance of success ie a 1 in 50,000 chance of success

So attributing a 0.2% value for the In Ground Value of the target we get = $74m - $94m = 60c - 80c



Valuation method 2
Another way of possibly valuing this target is to use an EV, most Iron Ore companies trade on at least an EV of $10/t now, using the 370Mt's DSO - 470Mt's DSO Hematite target, an EV if it were JORC'd would be = $3.7Billion - $4.7Billion

Again ridicilous figures, but given the risk if we only allow a 5% chance of success for a JORC = $185m - $235m = $1.55 - $1.95


Valuation method 3
A valutaion based on FDL's mkt cap,

Per my above FDL related calculations I showed that FDL was trading on an EV of 60c - 70c per target tonne of Iron ore resource

Applying this to MDX we get = $220m - $330m = $1.85 - $2.75



Prefered Valuation method DISCOUNTED FDL comparison

Now given the superiority of FDL's target claim base on the fact that they have

1. FMG as the next door operator which provides potential offtake/infrastructure etc etc

2. FMG has already delienated a massive JORC on adjoining tenements which validates FDL's target

I would say MDX should trade at an EV = to 1/4 that of FDL's, ie discounted by 50% for each of FDL's superiorities

So 1/4 FDL's EV = $55m - $83m = 45c - 70c



Conclusions

First and foremost it must be remembered that MDX have only stated an exploration target, a target which is based on geological surveys, geological mapping and rock chip samples, for such target to be converted to a JORC compliant resource alot of drilling is required to be completed

That being said the company have been working away at Mt Alfred since November and are confident of achieving an intial DSO 90Mt- 100Mt Hematite resource by June/July,

Moreover the buying of shares by RedRock who control nearby ground suggests that they may have found something which crosses over into MDX's grounds

Finally all of the above calculations are a guide really and nothing more, when FDL announced its Iron ore target I thought wow this is going to run and bought heaps up to 3c which I sold about an hour later when it hit my intial conservative estimates of 4c-6c, it closed the day at 10c and opened the following day at 15c, so I guess my point is the mkt will put its value on a company and no one else, moreover traders will most probably rule this stock for the early parts of next week so be prepared

Either way I think MDX is surely in for some interesting times

p.s. please check my figures

 

[fishomc]

YT.

"A target of 650Mt's-750Mts @ 57%-63%Fe" is incorect. Please read the release thouroughly.

Average is 40%fe.

Only 4 samples exceeded 60%fe.

The extrapolated DSO targets of 90mt in the release is crazy. They have used the few maximum samples, and ignored the lower grade samples. Look at the map provided, each DSO targets area contain only 1 high grade sample, along with many many low grade samples?

This type of release frutrastes me to no end!

cheers.

 

[gfresh]

I'll agree that chip samples really don't mean much.. but neither do they imply the inground content may be bad if there are some lower grade grab samples on surface.

Young Trader: I don't think you should be implying that it's that sort of tonnage hematite for the entire area. In fact, I believe the company has stated that it's more likely to be magnetite in the general area in previous statements. Even though I'm holder, I am not getting too carried away.

Already the company has stated that it was only an conceptual target 90-100mT hematite in the target areas. Who knows what else is outside that and what does "iron stone" mean in relation to the 650-750mt range?? Is that just rock that may contain some iron ore, or is it minable ore? MDX needs to clarify this.

Also your figures on Mindax's shares appear to be incorrect. I am not quite sure where you got them from - however I have from their latest quarterly:

Ordinary shares on issue: 84.48M
Options: 38.8M

Total diluted shares (post June) = 123.28M

I also have cash in bank at end of quarter for them at $2.85M, not $3.5M. Again I'm not quite sure where you got them from.

 

[fishomc]

Good to see you have a level head Gfresh.

Look at the table of rock chip results, you have 40%fe aveerage grade and a 40% silica grade!!!

Yes, thats right, 40% is essentially sand. hence the "Ironstone" or "Ironsandstone".

While i dont hold the stock, if i did, i would be concerned at the need for the company to "ramp" its prospects in this way?

cheers.

 

[YOUNG_TRADER]

Gfresh,

Whoops thats a typo re MDX shares

It is meant to be 85m + 35m 20c options


Fishheads this was just a very rough bit of thoughts I put together on a Sunday arvo while I had a spare moment and as you can see I am stressing that MDX has only got a speculative TARGET, key word TARGET

nothing is confirmed

nothing is JORC'd

However quite a few people have asked me what they thought the "potential" value could be for MDX

As you can see I have shown that it is near impossible to put a potential target on MDX, however based on the very rough figures I have gone through and the way in which the mkt re-rated FDL, and also GNL and IRM to a lesser extent I would think that a run to 40c is possible but then again who knows,

More than anything I found it very interesting that Red Rock have been buying shares over the past few weeks

p.s. re the ramp, it worked wonders for FDL and that came out of nowhere, ie no previous sampling or surveying

For all we know MDX may have the anti-serum for Bird Flu stored at Mt Alfred and Red Rock is actually a Bio Tech trying to get access to the anti-viral serum to prevent the Bird plague wiping out humanity, right enough from me, off to the St Kilda festival :

 

[exberliner1]

grfresh...good points raised there.

Do remember when talking about the fully diluted totals to add in the option conversion cash which would give MDX another $7.8mn

I still hold this one mainly the MDXOAs and I still believe it is totally undervalued on its potential alone ... I say potential as there is nothing more to go on. Except perhaps RRR's recent shopping.

As some of you may know there is a poster over on HC called TigerTen who is a director of RRR.

He has given some interesting insight into the Mt Alfred region on the MDX and IRM threads.

Sorry Mods to mention the darkside - although it is pertinent in this case.

I shall certainly be awake at midnight tonight to watch the off.

EB

 

[sleeper88]

With a market cap of only 14m, IMO this is worth a punt, with upsides outweighting downsides at this price.

To elaborate on YT and exberliner1 analysis of RRR's shareholding, i've included a few attachments: (note, RRR has increased there holdings to 8.65% as of the 1/2/08)

 

[YOUNG_TRADER]

As some of you may know there is a poster over on HC called TigerTen who is a director of RRR.

He has given some interesting insight into the Mt Alfred region on the MDX and IRM threads.

Sorry Mods to mention the darkside - although it is pertinent in this case.

I shall certainly be awake at midnight tonight to watch the off.

EB

Hi EB,

Regarding this "Red Rock Director" how has his identity been confirmed?

I wouldn't think a UK director would be on HotCopper then again I could be wrong,

If it is him, ask him what Red Rocks intentions are with MDX, I'm sure he'll tell you :

I still think Red Rock are after the Bird Flu cure and that could be worth Zillions!

 

[juw177]

If RRR is trying to accumulate, why would the director join with the rampers at HC? It would not be good business...

 

[exberliner1]

YT... the HC RRR director is Australian and based in Perth I beieve.

He doesn't push RRR MDX or anything else - just gives some very useful opinions on the whole area.

Comments from TigerTen can be found on the IRM and MDX threads. RRR also holds a shareholding in JMS and he posts there as well.

Here is a selction of some of his comments.

______________

Mt Alfred, Mt Richardson and Mt Forrest (RRR-IRM-MDX) are approx 100kms to Sandstone -right on the wide well maintained Menzies -Sandstone road -then only 500 km on sealed roads to Geraldton -and/or the new Geraldton Iron Ore Alliance railway network and the new port at Oakajee.

Stay tuned for the Central Yilgarn Iron Ore Alliance -a real iron ore province in the making.

________________________

Yes mate -stay tuned. Tell 'ole Meerkat that MMX are transporting a similar distance from Jack Hills and Mitsubishi have pledged $3 billion and Golden West are far -far further from port at west Wiluna -along with other new floats up to 1000 km from Geraldton with their stock selling at a premium.

With current and projected iron ore prices 600km is a breeze -especially on sealed roads -if you have the tonnage potential of the Menzies to Mt Forrest greenstone belt.

_________________________

One of several options -particularly for JMS of which we are fairly substantial shareholders

___________________________

Given the vitriolic attacks by people such Idaho I will no longer post on HC. There is always someone who spoils the party !!

Directly and indirectly I hold shares in JMS- RRR- IRM -MDX etc etc and personally have promoted the proposal to export iron ore from the Menzies -Mt Forrest greenstone belt ever since RRR was listed on AIM and long before work commenced on these various projects.

Any information I have posted is in the public domain and any iron ore alliance proposal is shared by all players in the region and is not as Idaho alludes the preserve of any one company nor market sensitive information.

____________________________

Make from it as you will.

As to posting from Europe - I am currently based in Frankfurt and on 3rd March I am moving to Kiev in the Ukraine to take up a position of deputy heads of equity sales in Ukraine's no.3 Investment bank.

It will make me the only HC and ASF member who posts from the ex Soviet Union which is somewhat bizarre if you consider that this time last year I lived in Meadowbank in Sydney.


To date I have found TigerTen to be well informed technically 100% correct and niether a spruiker or a downramper.

There are a number of company directors currently posting on HC and so far every one is playing by the rules.

Hope that helps.

EB

 

[happytown]

hmmmmm,

ann out earlier this morning where mdx specifically talks to the rrr shareholding issue

...

Red Rock has advised that it regards its investment in Mindax as simply an investment. In relation to its Mindax shareholding, Red Rock has not proposed any transaction with Mindax and Mindax has not solicited any proposal from Red Rock or any third party.

Red Rock (as it is entitled to do) has formally requested a copy of the Mindax share register and a copy has been supplied in accordance with the requirements of the Corporations Act. It may be the case that at some time in the future Mindax shareholders may receive direct communication from Red Rock though obviously we at Mindax have no way of knowing whether they will or they won’t. Furthermore, if there is to be any communication, your Mindax directors cannot predict what the nature of that communication might be.

...

(emphasis in original)

cheers

 

[sleeper88]

RRR has now increased their holdings to 10.02%, interesting i wonder if they'll buy up to 19.99%. interesting times ahead

 

[YOUNG_TRADER]

Well what the hell was that?


Glad I saw that for what it was, a pump up

I hate when traders do these to stocks, it destroys their credibility

Still a profits a profits

 

[YOUNG_TRADER]

Am I the only one on ASF amazed at MDX's resilieance today?

I thought it was a typical pump and dump, but the dump never really came, which leads me to believe that this was only a minor pump, or not a pump at all,


The accumulation around 20c over the last few hours is amazing,

Something may be up or it may just be traders, either way I still have some fingers in this pie

 

[roland]

Am I the only one on ASF amazed at MDX's resilieance today?

I thought it was a typical pump and dump, but the dump never really came, which leads me to believe that this was only a minor pump, or not a pump at all,


The accumulation around 20c over the last few hours is amazing,

Something may be up or it may just be traders, either way I still have some fingers in this pie

I'm not so excited - it's been here a couple of times before. RRR buying in again is helpful and I'm happy to see the consolidation at this level. When it hits 0.30, I'll be pretty excited

 

[Sean K]

Longer term perspective with S&R identified.

Not sure what price it is right now, but that big white candle was a change of fortunes.