Mineral Resources has a few different strings to its bow, with its quarterly in April covered here showing no major concerns which has helped the market regain confidence in the miner as it actively addresses its large debt pile. If MIN gets lithium right, they are likely to deliver for investors, but if they get it wrong, the balance sheet leverage that made it dangerous in 2024 comes back into focus. The issue here clearly is that the price of lithium is outside of MIN’s control.
Today, Onslow Iron is the asset driving the Mineral Resources story, but lithium remains the company’s biggest source of upside leverage. The mining services division provides stability, iron ore delivers the near-term cash flow, while Wodgina and Mt Marion offer exposure to a lithium recovery that could materially reshape group earnings over the next cycle.
We are a fan of MIN but aren’t considering re-entering the miner around $64. After rallying ~430%, it’s a sobering thought that a simple ~30% pullback, common in bull markets, takes the stock well under $60.
- We can see MIN surprising on the downside over the coming months, with a retest of the $50-55 area not out of the question.
MM is neutral towards MIN around $64
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