MLX - Metals X Limited

With supply worries and increased demand, the price of Tin again surged overnight on the LME to record highs. With some analysts now talking about a price around $17000 usd a tonne.

With MLX Australia's Number 1 Tin producer and the Worlds 6th largest it is the best leverage on the ASX to rising Tin prices.

With a sustained increase in buying volume over the last couple of weeks and a reduction of the number of shares available on the sell side it looks like MLX will continue its march higher with the 50c mark looking very likely in the very near future.

With all the added media exposure about the rise in Tin prices it won't take long before investors start to jump aboard the MLX story.

With buyers lining up now 2.65 million above the 40c mark compared to just 1.2 million on the entire sell side, putting upward pressure on the shareprice as investors scramble to get in.


Metals - Tin surges to new record high as supply worries fuel spec buying


LONDON (Thomson Financial) - Tin surged to a fresh record high as ongoing supply worries in key producer Indonesia and a break of key technical levels fuelled buying amongst speculative traders.

At 9.42 am, LME tin for three-month delivery was trading up at 15,675 usd a tonne against 14,950 usd at the close yesterday. Earlier, tin rose to 15,700 usd, its highest point since the new contract started trading in 1989.

'I think tin is mainly being driven by investment demand and technical factors... having broken above 15,100 usd that's given it upside. I don't think anything has changed in the market ... production from Indonesia is much lower and that's the main thing,' said Peter Kettle of the Tin Council.

Indonesia, the world's second largest producer after China, has been engaged in a crackdown on illegal tin mining and smelting that has crimped output in the country for much of this year.

Elsewhere, lead surged to another all time record high of 3,310 usd a tonne, before dipping slightly to 3,300 usd against 3,231 usd at the close yesterday.

The heavy metal has rocketed to a series of record highs in recent months as supplies from Australia remain restricted and lead exports from China continue to fall.

These worries have been exacerbated this week by news that an explosion at Doe Run's Herculaneum refinery in Missouri last Friday will see modest disruptions to supply of lead and lead alloys.

Copper was up at 7,855 usd a tonne against 7,825 usd at the close yesterday, as traders took the view strong Chinese economic growth will fuel demand at a time when supply remains crimped by labour unrest in the Americas.

In other metals traded, ali was up at 2,810 usd a tonne against 2,787 usd at the close yesterday, nickel was up at 33,550 usd a tonne against 32,700 usd, while zinc was up at 3,565 usd a tonne against 3,505 usd

Hi Mick, personally I think the rise in Tin price is only temporary, mainly because of the shut down of illegal mines in Indonesia. The authority in the country is cracking down on it, bt I see these mines running again in a few weeks, either with the government taking over the mines, or the dodgy mine operators paying their way out or some sort. many of the surrounding villages there depending on the mines as their only source of income, so i cant see the government shutting them down for too long.

As for tin, I have read it somewhere saying its the metal of the 21st century, mixed with alloy its light weight n strong, and there will be strong demand for it in coming yrs, i'll try to find the article again...

and looking at MLX, it is certainly overlooked, with all the hypes on Iron ore, not many investors looked at Tin producers. look at YTC its backed by one of China's largest tin producers, with no drill results out yet and very lil project and is already valued at $50-60m. MLX has the backing of JinChuan Group, and is already earning royalties abt $10m a yr, and various LARGE projects coming online, its $450m mkt cap is definately undervalued. I still need to put some figures together, will probably do so this weekend. bt as Aust biggest tin producer, with the rising tin price, I can see this one also becoming a take over target in the near future.

PS i DONT hold MLX

Hi folks,
I'm pretty new to posting on this forum. I have been looking at MLX and have purchased shares @43c. The report from SCE basically says that most of the illegal miners are restricted to the tailings left by the alluvial mining of PT Koba and PT Tima. Koba and Tima are now mostly mining offshore as the alluvial land deposits are depleted. It is thought that the tailings are pretty much depleted also and that any new mining on land will require a hard rock approach ( at least 5 years away).
cheers

thanks for the input guys, good to have some discussion on MLX, it seems with the supply problems in Indonesia and Bolivia it has got some investors worried about the long term supplies thus driving prices much higher.

The Southern Cross Equities report highlighted the point that the increase in production coming from MLX is much needed by the market as it is one of the only near term production increases.

As for trading today it is looking very positive with a likely open of 45c, this is the last major resistance going forward if this was to break it may quickly run to higher levels.

Also good to see the the buy side is filling nicely all the way down to the 34.5c level.

If we get another 5 million plus day volume it will be very interesting to see where the SP ends up because there seems to be a distinct drop off in the sell volume at present compared to the last couple of weeks.

It is interesting to note that the top 6 shareholders account for 50% of available shares. Have requested top 20 will post when received. It could turn out to be the case that the top 20 hold more than 70% of the company, meaning the available number shares available isn't that huge.

good opening today, got myself a small parcel of the options, which expires in dec 08, excellent value compared to the heads.

What brought my attention to (MLX) was the fundamental story. Again some great post's regarding this and much appreciated. The fundamentals it seems cannot be ignored for this stock and the supportive chart says to me all lights are green at this stage. Looks like it will break into new highs today and from here I am projecting an initial target of 59c. Great support with the OBV steadily trending up meaning insto's are well and truly on board, fundamental to any long term price rise. I will jump on board today if it can stay above 46c.

Unfashionable metals back in vogue
Trevor Hoey, July 30 2007

Excerpt:

Humble tin makes a charge

Metals X is also worth looking at. It is another company that is involved in the production of a less fashionable resource. Tin might not have the allure of uranium or nickel, but for Metal X it represents a very profitable resource in a supply constrained market where sharp increases in the price of the commodity appear to have gone unnoticed.

Since June 2006 the price of tin has nearly doubled, increasing from less than $US8000 per tonne to about $US15 500 per tonne. In the last month the price of tin has risen by more than 10 per cent, outpacing the more closely followed base metals such as nickel, copper and zinc. In fact as huge declines in overseas markets haunted investors on Friday, tin was the only bright spot. While nickel, copper, zinc, lead, aluminium, gold and silver all suffered declines, tin gained another 1.5 per cent.

P/E belies Metal X’s growth profile

Though Metals X’s share price has increased significantly in the last 6 months, it could be argued that the company remains undervalued. Metal X is forecast to deliver a net profit of $21.6 million in 2007-08, increasing by nearly 200 per cent to $63.9 million in 2008-09. This represents earnings per share of 6.1 cents, indicating that Metal X’s 2008-09 forecasts reflect a P/E ratio of 7.

These forecasts were released in June, and while it is from the most recent independent research available it was compiled prior to the recent spike in the price of tin. Furthermore, the forecasts are calculated using a long term tin price that is about 30 per cent below the current spot price.

Long-term earnings outlook

Metal X’s Renison and Mt Bischoff mines have a resource of about 6.6 million tonnes, but analysts believe that further underground mining at Renison could result in resource upgrades and potentially extend the company’s production capacity well beyond the eight years that is currently estimated.

In this regard it should be noted that Renison is the largest hard rock tin mine in the world, and based on current production estimates for 2009 Metal X is ranked the sixth largest tin producer in the world. Metal X also owns the Collingwood tin mine in North Queensland that has a smaller resource and a mine life of three to five years.

Nickel assets offer diversification

Metal X’s other assets include interests in nickel operations at Mt Keith, Kambalda and Kingston. These assets produce revenue in the form of royalties – related earnings are expected to be in the vicinity of $8 million for the six months to June 2007. But in terms of Metal X’s nickel interests, its Wingellina resource that has 2 million tonnes of contained nickel is where the blue sky lies.

In May 2007 China’s largest nickel producer, Jinchuan Group made an investment of nearly $33 million in Metal X, making it the largest shareholder with a stake of about 13 per cent. The funds will be used to assist in progressing the Wingellina project and Jinchuan has the right to negotiate an offtake arrangement. Analysts estimate that the Wingellina resource could support a strong level of production over a period of 25 years.

hey spottygoose, where was this article found? MLX has been a bit of consolidation stage of late, may be a bit of publicity in the financial reviews will do it good!

It was from a newsletter I subscibe to called "CompareShares".

http://www.compareshares.com.au/

There was a bit about MLX in the AFR a couple of weeks back re it being Southern Cross Equities director's top pick among the mid to small cap resource plays. According to AFR he was extremely bullish on the SP prospects saying it looks cheap. He says the SP should double over the short to medium term & recommends "buying it aggressively under 50c".

Key to his strong outlook is the potential for Wingellina to drive MLX's longer-term earnings & valuation, while the restart of the Renison Tin project is expected to have a significant impact on earnings.

Cheers.

No announcement but MLX is up like a rocket today with huge volume.

rico01 said:

No announcement but MLX is up like a rocket today with huge volume.

Click to expand...

Any ideas why?

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 --
EPS -6.7 -0.8 2.4 0.0
DPS 0.0 0.0 0.0 0.0

thx

MS

What's up with MLX?

I think good news?

ANyone buying?

...............................................................................................................................................................................................................

JP Morgan just upped their stake at 43c - notice received this morning. Then there is the approval to re-open the mine at Renison.

imaginator said:

What's up with MLX?

I think good news?

ANyone buying?

...............................................................................................................................................................................................................

Click to expand...

Did you mean JPMorgan Chase adding to its substantial holding? I would imagine that to be an encouraging news indeed.

Happy trading!

I can not believe MLX's price is only 30.5c now.

The demand of tin is solid. The production is for sure. I can not see any reason why ppl so worried about MLX in?

I topped up today and I think I have done a right thing. If any mate here know why MLX should fall below 30c, please make some of your comments.

ta2693 said:

I can not believe MLX's price is only 30.5c now.

The demand of tin is solid. The production is for sure. I can not see any reason why ppl so worried about MLX in?

I topped up today and I think I have done a right thing. If any mate here know why MLX should fall below 30c, please make some of your comments.

Click to expand...

There are 2 reasons i could think of.

1: They have just announced a capital raising, with shares placed at .30
2: We are in very volitile times with a lot of uncertainty atm, with markets going through a big correction, and the resources sector hasn't been spared.


I don't hold atm and won't be buying in unless the economic outlook somehow does a massive about turn, but i recently researched this company and like the look of it.
The Tassie restart, Renison, is good move and with the removal of Copper now, will see a very good price achieved.
Copper is virtually for free now while achieving a higher Tin price as their will be no more smelter penalties.

ANN just out. Metals X move into Phosphate. On fire and up 21%!

http://www.asx.com.au/asx/statistic...rchByCode&releasedDuringCode=W&issuerCode=MLX

Was just about to sell this morning as well!

See ANN for full details.... Aargh
Metals X – Tin Strategy Update

Highlights

• World Tin prices hit all time highs on LME, reaching a high of US$17,870/
tonne.
• Renison re-start underway and on track with tin concentrate production
anticipated to commence this June.
• Open Pit Mining has commenced at Mt Bischoff.
• Renison expected to produce approximately 8500tpa tin metal and 1500tpa
of copper co-product at an operating cost of approximately A$8000/t.
• Rentails pilot fuming tests underway and feasibility targeted to be
completed late in 2008.
• Rentails expected to produce 5,500 tpa of Sn and 1500 tpa of copper in
matte for 9 years at an estimated operating cost of A$7000/t.
• Metals X advises planned closure of Collingwood tin mine with tin
production focus moving to its Tasmanian Tin Strategy.
• Metals X has sold its Gillian exploration project in Far North Queensland for
A$250,000 in cash and a 1.5% NSR royalty.
• Metals X carries no corporate debt and has available working capital in
excess of A$60m for its project developments.

World Tin Market Dynamics and Pricing

World tin prices have revived strongly in recent years, as a result of improved demand and supply
uncertainties.

Price reaction has been strongly positive and it is considered that the strong consumption demand driven
mainly by Chinese industrial growth and, environmental pressure to substitute toxic metals in order to improve
recycling rates. Consumption demand for tin is expected to be strong for many years into the future.
Supply-side reaction to higher prices has been typically elastic with initial oversupply and more recently a
waning in production as is typical of a market where almost a half of world production comes from nonconventional
production and cottage industry. This sector is struggling to expand at rates required to meet
consumption demand and the longer-term picture is supply shortage unless significant production increases
can be achieved.

The latest spot tin price close on the LME was US$17,870/tonne (~A$19,280/t) having reached its highest
level since the heady days of the International Tin Cartel in the late 1970s.

Tin has achieved an annual growth rate of 4% pa over the past decade and maintains a strongly positive
'intensity of use curve' suggesting continued consumption demand and higher prices.

Metals X dominates the Australian tin sector with the largest tin inventory and the only serious production of
the metal. Metals X has implemented a strategy that will see significant growth in its tin production in the
ensuing years.

Metals X owns the dominant mines in Australia's most prolific tin fields and the only significant infrastructure in
Australia's tin industry at its wholly owned Renison Bell Mine and Tin concentrator.

Tasmanian Tin Strategy

Metals X, through its wholly owned subsidiary, Bluestone Mines (Tasmania) Pty Ltd owns the Renison, Mt
Bischoff and Rentails tin projects on the West coast of Tasmania. The Renison and Mt Bischoff mines have
been two of the largest tin producers in Australias tin industry of the past century. In particular, the Renison
Bell mine has a production history spanning almost half a century at annualised production rates ranking it as
one of the largest single tin mines in the world.

The foundation of the Renison Project and the key defining feature of this project in this time of higher
commodity prices is the substantial infrastructure already in place at Renison and the related short-fuse to
commercialisation at a world-ranking scale. Metals X believes this infrastructure has a replacement costs
today of in excess of A$200million and a 2-year time benefit to production.

Renison Project

Metals X has previously announced to ASX on 17 October 2007 its intent to re-open the Renison Project as a
Tin and Copper producer

Metals X (formerly Bluestone Tin Ltd) invested over A$50m in capital to revive the Renison Project only to
place it on care & maintenance in October 2005 as tin prices collapsed to under US$6000/t in response to an
explosion in small scale and illegal production in Indonesia. Metals X believes that the threat of supply from
illegal mining has now passed and stronger tin prices are sustainable into the future and this is integral in the
decision to re-start.

Renison is a large old underground mine having produced over 200,000 tonnes of tin metal in its history.
Remaining total Identified Mineral Resource estimates for Renison stand at 4.37 million tonnes at 2.01% Sn
containing 88,075 tonnes of tin metal. The mineralised ore systems at Renison remain open at depth and in
places along strike.

The Renison tin concentrator has a nominal capacity of 700,000tpa. Having operated for over 40 years
continuously, there have been several phases of new technology integrated into the plant, usually as add-ons
and process revisions modified on the run. In the two years that Metals X has held the project on care &
maintenance there has been for the first time, a significant review of the entire metallurgical process and an
opportunity to redefine the flowsheet and improve efficiency and ore recoveries without operational pressures.

Metals X will re-start the project with a flowsheet that maximises the efficiency of the plant and incorporates
additional new technology and advances in process control and ultra-fine gravity concentration technology. In
addition, in recent years, coincident with increasing depth, particularly in the southern part of the mine,
significant copper mineralisation occurs on its own and co-incident with the tin lodes. In response to this, and
with cognisance of significantly higher copper prices which are at an all time high, Metals X will operate a
copper concentrator sub-circuit within the plant to recover a copper concentrate as a co-product.

Metals X intends to re-build the Renison underground mine to its former glory over the next 3 years, the time
period it believes will be required to undertake a level of capital development to develop sufficent ore to
enable the plant to be fed from the underground mine in its own right. In the meantime, the underground ore
will be supplemented with open-pit mining from Mt Bischoff at a rate of approximately 250,000 tonnes per
annum.

Metals X has commenced open-pit mining at Mt Bischoff and will stockpile ores at both Mt Bischoff and
Renison, prior to the re-commissioning of the plant. Underground mining will recommence in early May 2008.
A new fleet of specialist underground equipment, predominantly Atlas Copco has been on order for some time
with the first arrivals having landed in Tasmania over the past few weeks.

Metals X expects to begin re-commissioning of the tin concentrator in mid June 2008.

Metals X has devised a detailed 3 year production plan for its Renison Operation as summarised below: (see ann, couldn't fig how to attach image)

Rentails Project

The Rentails Project is built around the re-processing to a concentrate of the historic tailings (18.2Mt @ 0.42%
Sn) that are stored at the Renison site. The re-processing will generate a low-grade tin and copper
concentrate (10-15% tin and 10-15% copper) which will be fumed using Ausmelt top lance furnance
technology to produce a high grade tin fume product and a copper matte. The technology is proven and in
wide use in the minerals processing industry.

Expected production is 5,500 tpa of tin metal and 1500 tpa of copper in matte at an estimated cash operating
cost of approximately A$7000/t tin metal (after copper credits). The project has undergone several iterations
over the past few years and the process route and methodologies are now selected and the project has
commenced feasibility with an intent to construct in 2009.

Pilot scale tin fuming works have commenced with Ausmelt Ltd and will culminate in final design of fumer, gas
train and bag house units.

Far North Queensland Tin Strategy

Metals X has decided to wind down its Far North Queensland Tin Strategy in favour of a greater commitment
and focus on its Tasmanian operations.

Collingwood Project

Metals X commenced the small Collingwood Tin project in late 2005 with a planned 3 year mine life and a
desire to expand project life with extensions to known mineralisation and additional regional tin resource
acquisitions.

The Collingwood mine has encountered many challenges in its production since inception with the tin lodes
showing far greater variability than predicted by pre-development drilling. The greisen lodes although well
developed are erratic in shape and anastimose in dip and strike which makes them difficult to drive and stope.
As a consequence, Metals X has not been able to achieve its predicted grades from the mine. This has been
further exacerbated by issues with overbreak during stoping and productivity issues due to skilled labour
shortages and equipment availability.

Metals X intends to mine out the remainder of its fully developed lodes and expects to cease operations at the
end of the current economic mine life, late in the first half of this year. Metals X will close the operation with
significant remaining tin resources and is yet undecided on whether it will hold the project on care &
maintenance for a future restart or permanently close the operation.

figures projected for 2008/9 fin. year also MLX appears to have many irons in the fire ............................ The revised Renison Tin Concentrator flow-sheet has been upgraded to include new technology and the
flow-sheet customised to the planned blended ore types. In addition a copper circuit has been added to
enable the generation of a copper co-product.
The Renison Project is expected to produce approximately 8,500 tonnes of tin and 1,200 tonnes of copper
metal in the 2008-2009 financial year at a cash operating costs (after copper credits) of A$8,500 per tonne of
tin and is expected to operate near these parameters on a steady state basis going forward. At the current
spot tin price (A$25,000) a margin of A$16,500 above operating costs exists.
The re-commencement of production is on-track to commence with a re-commissioning phase in mid-June
and a build up to full capacity in the first quarter of the 2008-2009 financial year. Further it comes with a
backdrop of unprecedented tin consumption growth and supply-side uncertainty that has seen the
benchmark LME spot cash tin price recently reached a peak of US$24,600 per tonne (approx. A$26,000).
Spot Tin prices have now averaged above US$17,000/t (A$19,600) for the last six months compared to a low
of US$5850/t when Renison was placed on care & maintenance in October 2005.----------------------------------------------------------------------------------------TIN which has been the market darling for many weeks due to supply concerns born
from Indonesia, lost $598 to rest at $23,300/t. Still, the price remained firm underpinned by
an illiquid market and tight supply. Tin stocks dropped a further 20 mt Wednesday to settle at 7805 mt.

Tin Prices Will Go Thru The Roof...

Since the previous post, Tin stockpiles are down to 7585. This trend shows no sign of abating in the near future. It also tested the all time high overnight.
This could just be the tip of the iceberg for tin prices... Talk about good timing for MLX...