Australian (ASX) Stock Market Forum

MIN - Mineral Resources

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DrBourse said:
Hi rabbit,

Spent some time doing FA & TA for MIN - so here we go -

As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.

Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.

Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).


Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.

ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.

EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????


Technicals:-

Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.

The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.

The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).

The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.

SP has rattled around within a “100 Day Linear Regression” (pages139–142)

CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.

TA does not support a Higher SP.
View attachment 147158


Summary:-

Certainly NOT a Buffett Style Stock.

IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.

FA & TA Do NOT support any great SP hikes in the ST.

In fact, both FA & TA Suggest ST Downtrend.

Cheers M8
Click to expand...
Interested to hear why you think lithium will run out steam if you're willing to share your thoughts.
 
DrBourse said:
Hi rabbit,

Spent some time doing FA & TA for MIN - so here we go -

As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.

Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.

Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).


Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.

ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.

EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????


Technicals:-

Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.

The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.

The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).

The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.

SP has rattled around within a “100 Day Linear Regression” (pages139–142)

CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.

TA does not support a Higher SP.
View attachment 147158


Summary:-

Certainly NOT a Buffett Style Stock.

IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.

FA & TA Do NOT support any great SP hikes in the ST.

In fact, both FA & TA Suggest ST Downtrend.

Cheers M8
Click to expand...
Once again, Thanks Dr for your chart and commentary, really appreciate your help when you are busy. I still hold my stand of around 60 that will create an interest for me to keep a real close watch.
 
After reading Dr B's TA n comments, I do a bit more serious readings/ research thru this Thread last few pages, my own conclusion, Min is not for me. dis4ever, your free carry is worth the reward n your post by David iben including few others are very helpful in deed. Have a nice weekend.
 
martaart077 said:
MIN doesn't seems to get a lot of shareholder love on the chat boards.
Nevertheless, as a lithium play it's been on the rise of late and up a further 10% on speculation that it will list its lithium assets in USA. Early stages yet tho.
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given the price i bought into MIN ( average sub $14 ) anything positive i say about MIN will look like ramping or gloating

i am a little surprised about it's current trend i was buying in very late 2018 and during 2019 , thinking there would be a mining consolidation phase coming soon

another case of 'wrong timing , happy ending ' for me ( of course i reduced to rescue and re-deploy that investment capital , but still hold some )

i am quite happy with the stock , but it brings back frustrating memories of trying to time the market
 
DrBourse said:
Hi rabbit,

Spent some time doing FA & TA for MIN - so here we go -

As you know, I feel the Lithium industry will run out of steam in the Medium Term (5 to 10 years) – suggest that you do a Google search for “Alternatives to Rare Earth Elements”.

Financials: -
Don’t like the look of MIN’s Financials – too many overinflated Guesstimates IMO.

Forward EPS figures are way too high – Cash Flow is Down – Current EPS is Down - Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).


Maybe MIN had to issue inflated EPS & scaled down Dividend figures to justify the huge increase in Debt.

ROE has decreased from 40.80 to 11.30 & ROC has decreased from 32.00 to 7.00.

EBIT is down from 1916 to 616, NPAA and EBITDA are also down – WTF ?????


Technicals:-

Most Analysts have a 12mth Target of $72.00 to $80.00 – My IV would be well below those figures, as MIN’s Financials are not conducive to a Buffett Style IV Calculation.

The Gap Up on 9/9/22 is a worry as it shows "Loss of Momentum", and that punters are wary of sustainable higher prices.

The 10 candles from 9/9/22 to 23/9/22 (incl) are 6 Red & 4 Green, and most of them show that Sellers are in control (page 5).

The last obvious Buy Signals were given late Feb 22, Mid March 22, and then Mid July 22.

SP has rattled around within a “100 Day Linear Regression” (pages139–142)

CCI gave its Sell Signal after the Gap Up on 9/9/22 – The MFI gave it’s Sell Signal after COB 13/9/22.

TA does not support a Higher SP.
View attachment 147158


Summary:-

Certainly NOT a Buffett Style Stock.

IMO MIN appears 2B driven by “Ramping, Innuendo, Irrational Announcements, and Sheep Punters”, they are the only events keeping MIN’s SP at current levels.

FA & TA Do NOT support any great SP hikes in the ST.

In fact, both FA & TA Suggest ST Downtrend.

Cheers M8
Click to expand...
OK - ran my Slide Rule over MIN - Margins of Safety rate as Average - Ratios rate as Very Good.

Also noticed a few more problem areas - Revenue has not increased as expected - Costs are not being passed on to clients - Very Bad PE in relation to NTA - Share Price is running well above NTA - SP is Expensive in relation to CPI - and the 10 year Bond Rate provides Better Value than MIN's high Share Price.

Although I've calculated an Intrinsic Value for MIN, I am not all that confident in it due to the wierd Financials that MIN produced recently.
So, for what it's worth, my IV Call for MIN is somewhere between $50.13 & $50.98, and my Buy Price is $49.29.

I'm happy to post details of my research, but remember my research suits my needs, that research may not meet your needs
SO DYOR.
Information on what I look for within a Co's Financials is set out in the Forum "DrBourse FA Help for Beginners".
Information on what I look for within a Co's Technicals is set out in the Forum "DrBourse TA Help for Beginners".
Additional Information of a General nature is set out in the Forum "DrBourse General Help for Beginners".

I could post a .pdf of the actual Spreadsheet Calculator here, but most will not be able to follow what it all means.

Cheers.
DrB
 
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DrBourse said:
OK - ran my Slide Rule over MIN - Margins of Safety rate as Average - Ratios rate as Very Good.

Also noticed a few more problem areas - Revenue has not increased as expected - Costs are not being passed on to clients - Very Bad PE in relation to NTA - Share Price is running well above NTA - SP is Expensive in relation to CPI - and the 10 year Bond Rate provides Better Value than MIN's high Share Price.

Although I've calculated an Intrinsic Value for MIN, I am not all that confident in it due to the wierd Financials that MIN produced recently.
So, for what it's worth, my IV Call for MIN is somewhere between $50.13 & $50.98, and my Buy Price is $49.29.

I'm happy to post details of my research, but remember my research suits my needs, that research may not meet your needs
SO DYOR.
Information on what I look for within a Co's Financials is set out in the Forum "DrBourse FA Help for Beginners".
Information on what I look for within a Co's Technicals is set out in the Forum "DrBourse TA Help for Beginners".
Additional Information of a General nature is set out in the Forum "DrBourse General Help for Beginners".

I could post a .pdf of the actual Spreadsheet Calculator here, but most will not be able to follow what it all means.

Cheers.
DrB
Click to expand...
Well posted. No one size fits all. All our financial needs n values are different.
Posters kindly posted their views n thoughts are for sharing only.
 
7 October 2022
Lithium Mineral Resources and Reserve Update
Mineral Resources Limited (ASX:MIN; MinRes) is pleased to provide the attached Mineral Resources and Ore Reserve statements (100% basis) for the Mt Marion and Wodgina hard rock lithium deposits as at 30 June 2022. Mt Marion and Wodgina are operating mines in the Goldfields and Pilbara regions, respectively, that produce high-quality spodumene concentrate.
This is the first time MinRes has released a joint Mineral Resources and Ore Reserve statement for Mt Marion and Wodgina, which also includes a maiden Ore Reserve for Mt Marion.
Highlights
• Wodgina Indicated & Inferred Mineral Resources estimated at 259.2 Mt at 1.17% Li2O
• Wodgina Ore Reserve estimated at 147.0 Mt at 1.20% Li2O
• Mt Marion Indicated & Inferred Mineral Resources estimated at 51.4 Mt at 1.45% Li2O
• Maiden Mt Marion Ore Reserve estimated at 17.2 Mt at 1.56% Li2O
Mineral Resource and Ore Reserve estimates are in accordance with the ASX listing rules and the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC 2012). Mineral Resources’ Managing Director Chris Ellison said: “We are pleased to report 164 million tonnes of Ore Reserves and more than 310 million tonnes of Mineral Resources, across the Mt Marion and Wodgina deposits. The high quality and scale of these Tier 1 assets in Western Australia underpin MinRes’ position as a leading global lithium producer.” “We are ideally placed to continue the major expansions at both projects to ramp up spodumene concentrate output for lithium hydroxide conversion for many decades to come.” “Significant opportunity exists to further expand the mineral endowment at both operations through near mine exploration activities.”

i hold MIN ( 'free-carried' )
 
Screenshot 2022-12-16 at 9.10.50 am.png
 
After reading @DrBourse post which you can find here, I decided to do some fundamental research on MIN myself and thought I would share what I found using the 2022 Annual Report which was released on the 14/10/2022. Part of this was inspired due to my current re-reading of The Intelligent Investor. Here we go.

Share price as at today is $88.79.

MIN is currently trading at 48x earnings based on the 2022 AR. Implied growth rate of the business at these levels (based on the simplified formula in Benjamin Grahams booked noted above: Valuation = Current (Normal) Earnings x (8.5 + 2x expected annual growth rate) is 19.77%p.a. This would bring EPS to $11.23 in 10 years time and at current earnings multiplier levels, prices in the vicinity of $539 per share. On this assumption, and shares outstanding staying the same, market cap in a decade would be approx. $101.3 billion dollars. If you believe this is not sustainable, current prices are too expensive.

From a quick overview of the financial statements:

1. EPS down 72.5% YoY

This is about the only thing I can note without making some amendments to the financial statements.

DrBourse said:
Dividends will gradually decrease over the next 5 years (so I immediately wonder why MIN would insinuate that, do they know something we don't).
Click to expand...
See below for probable reason.

Free Cash Flow

Looking at the statements, net cash from operating activities in 2021 is $1.309B. Now we have to subtract the maintenance CapEx for which we are going to use Depreciation and amortisation which looks to be $258M. However, one thing that The Intelligent Investor teaches you is to read your financial statements from back to front because the back is where all the creative accounting happens. So, if we scroll to page 164 of the AR, we actually find that accumulated depreciation and amortisation for 2021 is $749M. This gives us free cash flow of only $560.4M, not $1.051B. that's $2.97 FCF per share on current outstanding shares.

Let us do the same for 2022. Net cash from operating activities in 2022 was only $279.8M. Maintenance CapEx for the same period (go back to page 164) is $940.7M which gives MIN for 2022 negative FCF of -$3.51 per share.

Debt

As DrB noted in his post, on the surface, total debt has increased by 83.19% from 2021 to 2022. However, it is actually worse than that I believe. As you can see below from page 188, there are commitments relating to the purchases of property, plant and equipment that are not recognised as liabilities, hence we need to add another $527.7M to the 2022 total liabilities. This brings the actual debt increase to 104.48% YoY.

Additionally, this reduces equity from $3.271B down to $2.743B, a reduction of 16.13%.

Debt to equity is now 184.75%.

1675573255451.png

Dividend Payout Ratio

Instead of using dividend per share / EPS, I instead like to use dividend per share / FCF per share as earnings does not always equal cash, as we can perfectly see this with MIN in 2022 with $1.8487 EPS to -$3.51 FCF per share.

Therefore, using the above, in 2021 we had a dividend payout ratio of $2.75 / $2.97 or 92.59%

In 2022, we had a dividend payout ratio of $1 / -$3.51 or -28.49%

There could be other things in the annual report that I have not found, however what I have found, for me, would be enough for me not to invest in this company at this point in time.

Find MIN 2022 Annual Report here.
 
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i threw a buy order in for some NWE but below the current market action

as a cheap( er ) side-door to extra MIN side MIN is offering an all-scrip deal , i am guessing they are hoping to reduce some energy costs by acquiring NWE and maybe selling some surplus

time will tell if ( my ) cash changes hands or it is a casual amusement in a market where i am have little action
 
came across this view on MIN; it says see enough to confirm my aversion to earlier manoevrings as the company grew.

Albemarle Again Bending MinRes to its Own Will​

By Glenn Dyer |

US lithium giant Albemarle seems to have again successfully deflected the lithium processing ambitions of Perth-based Mineral Resources and its CEO, Chris Ellison.

Two announcements from the companies this week revealed slightly different takes on the story – which centres on the restructuring of the MARBL joint venture between the duo. Talks have been ongoing for a year since the original announcement at the start of 2022 about the revamp of the JV and its expansion.
As a result, MinRes will not be able to move into lithium hydroxide production in Australia and instead will have to spend well over a billion dollars paying Albemarle for 50% stakes in its two Chinese plants as well as a separate payment of $US350 million, less a payment from Albemarle of between $US100 and $US150 million. Albemarle will also increase its control over the Kemerton plant’s two trains (in southwestern WA). The original state a year ago this month called for the Kemerton ownership to remain 60% Albemarle and 40% MinRes.
Instead it is 85% Albemarle and only 15% for MinRes, a significant change and Albemarle will operate both trains. Albermarle will also supply MinRes’s 15% spodumene quota for Kemerton from its share of the output of the Greenbushes mine. MinRes will pay market rates for the key ingredient – no mates’ rates there. The Kemerton plant will continue to be fed from the Greenbushes mine nearby – its 49% owned by Albemarle and 51% by the joint venture of IGO and Chinese lithium giant Tianqi (who are building their own hydroxide plant at Kwinana).
MinRes does get to lift its stake in its Wodgina mine in the Pilbara, albeit only from 40% to 50%. And MinRes gets back management of this mine, which is another plus. The deal also sees MinRes acquiring a 50% interest in Albemarle’s wholly-owned Qinzhou and Meishan plants in China. The latter plant is currently under construction and has a design capacity of 50,000 tonnes a year. It is due to start commissioning next year. The former plant currently has a capacity of 25,000 tonnes a year and will need modifying to convert Wodgina spodumene, according to Albemarle.
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The 50% stake in the two Chinese plants was not mentioned in the 2022 statement – Albemarle will get $US660 million from MinRes and will continue to manage both plants. (The deal has to be approved by Chinese authorities, but MinRes shouldn’t have any concerns seeing it is in a WA iron ore JV with a big Chinese steelmaker.) That’s the other big change from 2022 and even that is not what MinRes would have preferred – half ownership is OK but management and/or operation control, shared or otherwise, would have been far more valuable to the Perth company.
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“We are delighted to have reached these binding agreements, which cement MinRes’ place as a world-leader in lithium mining and leverage our partner Albemarle’s strong track record in battery chemical production,” CEO Chris Ellison said in the statement on Thursday. “By growing our battery chemicals business and expanding into global chemical marketing, MinRes will become one of the world’s largest fully integrated lithium chemical suppliers to auto manufacturers, capitalising on the increasing demand for sustainable battery mineral products,” he said.
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Albemarle CEO Kent Masters said the MARBL restructure positioned the company strongly going forward.
“Our Australian lithium assets are core to Albemarle’s strategy to build a globally diversified portfolio of best-in-class assets and resources,” he said.
“Inherent to that strategy is managing our global portfolio to maximize growth optionality and maintain a leading position in a dynamic, growing market. Our restructured MARBL joint venture enables each partner to deliver long-term value to our customers.”
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The effect of the Thursday announcement is that MinRes has more toys in the lithium sector but Albemarle has control and keeps its feet on the prized hydroxide processing assets in WA and China. Albermarle has kept MinRes out of any chance of gaining operating experience in operating the key part of the lithium process – the hydroxide refinery and preparing it to battery grade (as well as to lower industrial grade for more general use). MinRes has had a small but potentially important win – instead of, as the 2022 statement said, Albemarle being responsible for the marketing of chemicals from both joint ventures, MinRes will be responsible for selling its share from Kemerton (15%) and Wodgina (50%), which gives it a valuable foothold in the global lithium marketing business. Not covered by this new arrangement with Albemarle is MinRes’ 50% owned Mount Marion lithium mine in WA. The other 50% owner is China’s Jiangxi Ganfeng Lithium Co. MinRes is the operator.
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Will MinRes’ next move be to spin off these lithium interests in the US, as it and its market mates have been suggesting now for six months? It’s no wonder its lithium interests helped the company to lift earnings to $390 million for the six months to December Revenue was up p 74% to $2.350 billion, Underlying earnings EBITDA was up 503% to $939 million, the net profit of $390 million was up a fantastical 1,890% and the interim dividends is 120 cents per share. There was no interim in 2022 and the previous payout was $1 per share in February, 2021. The company paid a final last year of $1.75 per share. Revenue and earnings jumped because of the surge in lithium prices with the conversion of spodumene from the Mt Marion and Wodgina spodumene mines in WA into lithium battery chemicals. Mineral Resources’ lithium revenue came in at $997.2 million, up from $143 million a year earlier. MinRes also reported modest increases in iron ore and mining services revenue.
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Analyts though were forecasting the lithium EBITDA to be more than $1 billion, ($1.06 billion was the consensus) so that’s why MinRes shares eased on Friday. But the results do give a big hint as to why Ellison was prepared to revamp the JV with Albemarle – he has to stay in the game.
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*** Lenin called them"useful idiots". He was wrong; they are generally useless ***

not completely they end up being scapegoats and decoy targets for the resistance

last i heard WES still has a fair war-chest and fancies itself as a chemical/resource processor

a scrip deal would be a little inconvenient for me but after the API take-over what will they ( WES ) do next
 
My April comp tip of MIN...They got a mining services division, lithium which will be one of the top 2-3 lithium producers of spodumene globally and the third is their iron ore division. They also have (an emerging) gas division. The stock was at 0.90 cts in 2006 hitting $78 in 2023. Could be another phenomenal company with long term growth.
 
www.fool.com.au

Mineral Resources share price tumbles 9% despite record quarterly lithium shipments

The Mineral Resources Ltd (ASX: MIN) share price is plunging after the iron ore and lithium producer dropped its quarterly activities report.
www.fool.com.au www.fool.com.au

The market appears to be bidding the stock lower after the company downgraded its mining services guidance.

Key points​

  • The Mineral Resources share price is plummeting this morning, falling more than 9% to $72.99
  • That's despite the company declaring a record quarter for spodumene concentrate shipments
  • However, a challenging quarter for its mining services business saw its full year production guidance dropped
The Mineral Resources Ltd (ASX: MIN) share price is in the red after the iron ore and lithium producer released a seemingly positive quarterly activities report.
Stock in the S&P/ASX 200 Index (ASX: XJO) mining giant is down 9.17% at $72.99 a share in early trade on Wednesday.
Zoom1M3M6MYTD1Y5Y10YALL
 
Mineral Resources has cuts ties with Albemarle on downstream lithium processing and has now set its sights on building its own lithium hydroxide plant.


buy WES?
 
Dona Ferentes said:
Mineral Resources has cuts ties with Albemarle on downstream lithium processing and has now set its sights on building its own lithium hydroxide plant.
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More detail

of amended terms of the transactions MIN signed with lithium giant Albemarle Corporation in February. According to the release, the updated MARBL Joint Venture will simplify the commercial arrangements.

Mineral Resources’ share of the Wodgina lithium mine will increase to 50%. The ASX 200 miner will remain the operator of Wodgina. Albemarle will take full ownership of the Kemerton lithium hydroxide plant, which it currently operates.

The economic effective date for the revised transaction remains unchanged at 1 April 2022. Albemarle will pay Mineral Resources approx. US$380 to US$400 million.

The amended terms will no longer see Mineral Resources invest in any Chinese conversion assets with Albemarle. They also will not make any payments to Albemarle for joint downstream investments.

The company said it will enter a transitional tolling arrangement with Albemarle to convert Wodgina spodumene until 30 June 2024.

This will enable the miner to continue to build its team in China before marketing its own share of Wodgina spodumene concentrate and lithium battery chemicals. MIN will establish an office and warehouse in Ningbo, China.

Commenting on the amended terms, Josh Thurlow, MinRes CEO Lithium, said
These changes are a win-win for both parties, with MinRes and Albemarle remaining great joint venture partners in the world-class Wodgina lithium mine, while maximising flexibility to focus on the strengths of our businesses…
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...For MinRes, we’ve unlocked value from our non-integrated Kemerton processing facility, which will provide flexibility to continue expanding our hard rock assets and developing our own integrated lithium conversion assets in Australia and abroad.
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The companies expect the arrangements to be completed in the December quarter.
 
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