MGX - Mount Gibson Iron
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Kauri
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Re: MGX
Chicken, waste is a bad thing. It is worthless sh*t that you have to remove and not get any return. 3Mtpa is the figure that is a positive. The other number that is important is NPAT - down from $50M to $37M. A very crappy announcement.chicken said:
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Re: MGX
With a P/E of 10 from its last full year earnings at .75 cents per share this baby on the reduced earnings will go to at least 0.55 cents per share on the new earnings downgrade and thesad thing for this stock is because its a new company which has been just tasting success a p/e of less than 10 may be placed upon it which may reduce it even more.
Does any one have any real clear date when earnings will return to normal?
With a P/E of 10 from its last full year earnings at .75 cents per share this baby on the reduced earnings will go to at least 0.55 cents per share on the new earnings downgrade and thesad thing for this stock is because its a new company which has been just tasting success a p/e of less than 10 may be placed upon it which may reduce it even more.
Does any one have any real clear date when earnings will return to normal?
Re: MGX
I agree 55c is a possibility. but not for the p/e ratio reasons you state. I think you are reading to much into 1 years earnings (as with multiplex). Have a bit more of a look at DCF valuation.
Basically, the current 'fair value' of a company, is the sum of ALL future earnings (not just current year), adjusted for the risk free return of the overnight interest rate, + a risk premium that the company will have future problems (such as the current one).
Fortunately we don't know the exact figure of any of these components
I agree 55c is a possibility. but not for the p/e ratio reasons you state. I think you are reading to much into 1 years earnings (as with multiplex). Have a bit more of a look at DCF valuation.
Basically, the current 'fair value' of a company, is the sum of ALL future earnings (not just current year), adjusted for the risk free return of the overnight interest rate, + a risk premium that the company will have future problems (such as the current one).
Fortunately we don't know the exact figure of any of these components
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Re: MGX
future earnings is usually based on 3 year forecast and this is usually based on the previous 5 yrs. The NPV value is usually the rate of inflation and they have been using 3% the risk free rate they normally just use the 90 day rate for simplicity and risk is usually the beta valu which is taken from the standard deviations from historical closing prices for the number of trading days over the previous twelve months but a risk can usually be place by using the p/e ratio as it has been done to bluescope.
With multiplex they have just decided that the years loss is abnormal so it is ignored and normal earnings is still in place.
See if you can now calculate the share price as i just adjust the p/e in accordance with the downgrade as the last share price is calcualated using the variables you just stated so just easy to adjust the share price by the decline in the earnings.
When a company is about to be listed they use the method u just spoke of as well to value the share price.
future earnings is usually based on 3 year forecast and this is usually based on the previous 5 yrs. The NPV value is usually the rate of inflation and they have been using 3% the risk free rate they normally just use the 90 day rate for simplicity and risk is usually the beta valu which is taken from the standard deviations from historical closing prices for the number of trading days over the previous twelve months but a risk can usually be place by using the p/e ratio as it has been done to bluescope.
With multiplex they have just decided that the years loss is abnormal so it is ignored and normal earnings is still in place.
See if you can now calculate the share price as i just adjust the p/e in accordance with the downgrade as the last share price is calcualated using the variables you just stated so just easy to adjust the share price by the decline in the earnings.
When a company is about to be listed they use the method u just spoke of as well to value the share price.
Re: MGX
A very crappy anouncement..would be if they made a loss...I think you should look at CAZ,FMG, and some of the other hopefulls..have they ever made $1 Dollar profit after all MGX is becoming the 4th largest iron ore producer in the next 12 months in Australia ..so the fundamentals are sound ask your Broker he would agree so crappy MY FOOT..MGX are making $$$$$...a lot of the others making SILCH..now can you understand the difference..I CANmarkrmau said:
Re: MGX
50,000 will drop to 60 cents or below, clear signs were there for all to see e.g price dropping and then directors selling always a dead giveaway, always look at directors buying and selling good example of stock going up
FLX directors buying at bottom and now going up.
No hope for this stock at the moment somebody is selling down in lots oflaurie said:And the sheep will follow into the slaughter house........
thank god for chickens
cheers laurie
50,000 will drop to 60 cents or below, clear signs were there for all to see e.g price dropping and then directors selling always a dead giveaway, always look at directors buying and selling good example of stock going up
FLX directors buying at bottom and now going up.
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Re: MGX
Although a mining company should be valued on NPV basis......
At 65c MGX is trading at a PE of 9. This is from last years NPAT of $23.7mill. With regards to earnings turning to normal??? the last time I checked 37 is > 23.7. So on forecast downgraded earnings MGX is trading at a PE of 5.6 (undiluted using number of shares from 05 report).
Viewing this as cheap or expensive depends on the life of the mines it owns (Tallering is only expected to go for 6 years), and the potential of its other prospects...
TheAnalyst said:
Although a mining company should be valued on NPV basis......
At 65c MGX is trading at a PE of 9. This is from last years NPAT of $23.7mill. With regards to earnings turning to normal??? the last time I checked 37 is > 23.7. So on forecast downgraded earnings MGX is trading at a PE of 5.6 (undiluted using number of shares from 05 report).
Viewing this as cheap or expensive depends on the life of the mines it owns (Tallering is only expected to go for 6 years), and the potential of its other prospects...
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Re: MGX
The market must be pricing the end of the life of the mind already into the share price...probably explains the low p/e as after 6 yrs of investment investors will recoup their investment from dividends.
The market must be pricing the end of the life of the mind already into the share price...probably explains the low p/e as after 6 yrs of investment investors will recoup their investment from dividends.
Re: MGX
Analyst....I think you are still posting on the wrong board....you are looking for MXG.....Multiplex.....this is MtGibsonironore...and your posts are odd.....we are talking about Ironore and metals....LOLOLO anyway this share will recover as MGX has been up and down this year will see a price over $1 next year..watch when the new iron ore price is anounced...good buying at present price as far as earning $37 million this year..well at least we are doing better than CAZ,FMG..as they have so far produced nothing and no profits..we are making $$$$$$$$ from iron oreTheAnalyst said:
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Re: MGX
Well...Chicko i was on the right track the other day when i said it will go to 55 cents it went to 60 cents so far. I dont have doubts about MGX but what is life expectency of their current operating mine and what are the forecasted sales projections for the next couple of yrs...i just want the hard facts
Well...Chicko i was on the right track the other day when i said it will go to 55 cents it went to 60 cents so far. I dont have doubts about MGX but what is life expectency of their current operating mine and what are the forecasted sales projections for the next couple of yrs...i just want the hard facts
Re: MGX
Their mine life is up to 25 years they got a hugh deposit....this one will go up as soon as the Chinese on board and it will run hard and fast..someone is working this share hard but they are making the $$$$...I am a longterm investor not day trader so its been to 55c from 97 cents before...this year so 2006 will be MGX year...they are saying this co. will become the 4th largest iron ore producer in AUSTRALIA..so whatever you say no matter to me as I did my research and am quite happy to hold...TheAnalyst said:
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Re: MGX
Do they have any explorations in place and have they discovered any other deposits that they can rely on to take them beyond 25 yrs....this is the risk that would probably be put into the share price as when the mine is finished it will be worth zero...so are the 25 yrs based on what they produced this yr or is there an increase in producing and if so will that reduce the mine life of 25 yrs?
chicken said:Their mine life is up to 25 years they got a hugh deposit....this one will go up as soon as the Chinese on board and it will run hard and fast..someone is working this share hard but they are making the $$$$...I am a longterm investor not day trader so its been to 55c from 97 cents before...this year so 2006 will be MGX year...they are saying this co. will become the 4th largest iron ore producer in AUSTRALIA..so whatever you say no matter to me as I did my research and am quite happy to hold...
Do they have any explorations in place and have they discovered any other deposits that they can rely on to take them beyond 25 yrs....this is the risk that would probably be put into the share price as when the mine is finished it will be worth zero...so are the 25 yrs based on what they produced this yr or is there an increase in producing and if so will that reduce the mine life of 25 yrs?
Re: MGX
Investment Rating
MGX produces conventional lump and fine iron ore in the Midwest region of Western Australia for export through Geraldton. Production was to increase from 2Mtpa to 4.5Mtpa in early 2007. A 10 year mine life is targeted . MGX in conjunction with its Chinese partner Shougang Group aims to develop a magnetite mine and concentrator near existing operations and 5Mtpa of pellet capacity in China. Pellets attract premium prices but are more costly to produce. Investment is suitable for aggressive, growth investors seeking long term upside from Chinese iron ore demand. Single commodity risk, development risk and the lack of dividends require consideration.
Result Description
Recently completed mine schedules to exploit the Tallering Peak ore reserve indicate development rates will need to be increased to sustain 3Mtpa over the mine life. Increased stripping in 2H06 will impact cash flow with the 3Mtpa production rate being achieved in 1H07 rather than 2H06. In addition to the ore access restrictions caused by the increased stripping, production will also be lower due to a four month delay in delivery of 34 rail wagons to April 2006 and installation and commissioning of a crushing and screening plant with 3Mtpa capacity.
Elsewhere limited access to scarce technical and professional resources has delayed the feasibility study for the Extension Hill Magnetite Project to the end of January 2006. The study will not be to bankable standard and capital cost optimisation will continue in an attempt to contain cost increases due to the current resources boom. Current operating cost estimates are in line with earlier estimates.
Impact
It is anticipated that hematite ore sales for FY06 will now be approximately 2.1Mt. The company has revised its FY06 profit forecast from $50m to $37m assuming no increase in iron ore prices. 2H06 profit is forecast to fall from $21m in 1H06 to $16m.
We maintain our Buy recommendation given the improving outlook for iron ore prices and the sharp pullback in share price. Our earnings forecasts and valuation are under review. That said, we take a long term view and the project delays while unfortunate, are shorter term issues.
TheAnalyst said:
Investment Rating
MGX produces conventional lump and fine iron ore in the Midwest region of Western Australia for export through Geraldton. Production was to increase from 2Mtpa to 4.5Mtpa in early 2007. A 10 year mine life is targeted . MGX in conjunction with its Chinese partner Shougang Group aims to develop a magnetite mine and concentrator near existing operations and 5Mtpa of pellet capacity in China. Pellets attract premium prices but are more costly to produce. Investment is suitable for aggressive, growth investors seeking long term upside from Chinese iron ore demand. Single commodity risk, development risk and the lack of dividends require consideration.
Result Description
Recently completed mine schedules to exploit the Tallering Peak ore reserve indicate development rates will need to be increased to sustain 3Mtpa over the mine life. Increased stripping in 2H06 will impact cash flow with the 3Mtpa production rate being achieved in 1H07 rather than 2H06. In addition to the ore access restrictions caused by the increased stripping, production will also be lower due to a four month delay in delivery of 34 rail wagons to April 2006 and installation and commissioning of a crushing and screening plant with 3Mtpa capacity.
Elsewhere limited access to scarce technical and professional resources has delayed the feasibility study for the Extension Hill Magnetite Project to the end of January 2006. The study will not be to bankable standard and capital cost optimisation will continue in an attempt to contain cost increases due to the current resources boom. Current operating cost estimates are in line with earlier estimates.
Impact
It is anticipated that hematite ore sales for FY06 will now be approximately 2.1Mt. The company has revised its FY06 profit forecast from $50m to $37m assuming no increase in iron ore prices. 2H06 profit is forecast to fall from $21m in 1H06 to $16m.
We maintain our Buy recommendation given the improving outlook for iron ore prices and the sharp pullback in share price. Our earnings forecasts and valuation are under review. That said, we take a long term view and the project delays while unfortunate, are shorter term issues.
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Re: MGX
Hello Brisvegas.....
......love your tag.....
Anyone can make the simple complicated. Creativity is making the complex simple
There appears to be a lot of concern at the moment as to what the Chinese are going to be able to negotiate the price of Iron Ore down to. They have hit steel, they have just creamed the price of Manganese Ore...... http://www.consminerals.com.au/pdfs/Tex Manganese Price Chart 221205.pdf
.....will Iron Ore meet the same fate? I am betting the smart money is on a reasonable drop in price.
Then a plethora of profit downgrades?...
Hello Brisvegas.....
......love your tag.....
Anyone can make the simple complicated. Creativity is making the complex simple
There appears to be a lot of concern at the moment as to what the Chinese are going to be able to negotiate the price of Iron Ore down to. They have hit steel, they have just creamed the price of Manganese Ore...... http://www.consminerals.com.au/pdfs/Tex Manganese Price Chart 221205.pdf
.....will Iron Ore meet the same fate? I am betting the smart money is on a reasonable drop in price.
Then a plethora of profit downgrades?...
Re: MGX
Ann stick to facts. You dont know and I dont know what the steel price will be so YOU DONT KNOW. Wait and see what will happen...and then we will see. The price I say it will rise by 10 %, my prediction....as there are problems by the Indians in Brazil....Ann said:
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Re: MGX
You know chicken i reckon you are right there is no indications that the commodity boom is gonna stop, actually i think it is somewhere not even thru the middle of its current cycle..a cycle is usually at least 5 yrs long and it has not been 5 yrs.
chicken said:
You know chicken i reckon you are right there is no indications that the commodity boom is gonna stop, actually i think it is somewhere not even thru the middle of its current cycle..a cycle is usually at least 5 yrs long and it has not been 5 yrs.
