Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM, Like you, I jumped into MIN too early, but do they represent a compelling buy at a price around $40? Do you think they have further to fall given weak (and potentially further weakening) pricing for lithium and iron ore coupled with high debt and a high planned capex spend? Regards, Peter
Hi Peter,
Short answer is we believe yes, however, the debt position is high right now so our position size will not exceed 5% of our Growth Portfolio.
We believe they are being prudent not paying a dividend and tightening the proverbial belt in these tough times with lithium and iron ore prices in the doldrums. They operate a cyclical business which is hopefully approaching its nadir:
CEO Chris Ellison said that, overall, the results highlight the strength of MIN’s business model, with diverse income streams all contributing to solid group earnings, despite a depressed lithium price:
“Given the stubborn lithium price and our remaining investment in Onslow Iron, we will continue to take a conservative approach during FY25, deferring expansion projects and focusing on cost reduction and cash preservation. This approach was reflected by the Board’s decision to not declare a final dividend for FY24,”
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