Ben Kramer-Miller • Sun, Nov. 9
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- Mandalay Resources reported a loss for the third quarter of $700,000.
- This is slightly worse than my expectations, although keep in mind that there were one-time costs in this quarter.
- I maintain my speculative long position, but I'm not buying more just yet until I see more results from the newly acquired Bjorkdal Project.
- Mandalay Resources had a free cash flow positive quarter, which is a nice surprise in this environment.
- This wasn’t unexpected though, as it has a very bright management team. The dividend is connected to the revenue and will increase in 2015.
- The investment thesis remains standing, and I’m buying on the dip.
Mandalay Resources : Higher Risk, But Still Compelling
- Mandalay Resources' speculative thesis has been playing out: production is growing while costs remain low.
- The Elgin Mining acquisition can potentially jeopardize this thesis, so longs need to watch production costs at Bjorkdal.
- I remain confident in management but I am prepared to abandon my position should the high-cost Bjorkdal Mine threaten the "growing production at a low cost" thesis. .
Update: Mandalay Resources Is On Its Way To Becoming A Mining PowerhouseThe Investment Doctor • Wed, Oct. 15
- Mandalay Resources announces excellent production results and increases its guidance.
- I'm positively surprised by the updated antimony production guidance.
- The investment thesis doesn’t change, unless the gold price will suddenly rise sharply.
Update: Elgin Mining Shareholders Overwhelmingly Approve Of The Mandalay AcquisitionBen Kramer-Miller • Thu, Sep. 4
- Mandalay Resources announced that over 99% of Elgin Mining Shareholders have agreed to the offer by Mandalay.
- This was widely expected to happen, although I didn't anticipate this in my recommendations of either of these two companies.
- I continue to like Mandalay Resources as a low cost producer but I'm not adding at the current valuation.
Update: Mandalay Resources' Largest Shareholder To Divest 40 Million Shares - Expect Near-Term Weakness And A Buying Opportunity
- West Face Capital - Mandalay Resources' top shareholder - will divest 40 million shares through a secondary offering through BMO Capital Markets.
- This will increase supply significantly for a stock that trades 720,000 shares per day.
- With the stock trading near all-time highs and with metal prices weak, this could trigger a sell-off.
- This was unanticipated in January, but I think it can provide an opportunity for long-term investors.
- I am not a buyer at current levels, but I am expecting weakness that could lead to a buying opportunity, and I am a buyer under $0.90/share.
- Mandalay Resources reported earnings of $4.9 million on revenue of $44.8 million reflecting increased production and higher operating costs.
- The higher costs are temporary and investors shouldn't be concerned.
- The company continues to be a high growth, low cost producer as I anticipated in my January article.
- I am not selling my position, but the stock is rich at $1.08/share vs. my $0.75/share recommendation price.
An Acquisition From Left Field For Mandalay Resources
- Mandalay Resources and Elgin Mining have announced their intention to merge their businesses.
- Mandalay Resources seems prepared to pay a sizeable price for the Björkdal mine in Sweden.
- Legacy reclamation issues might still provide a stumbling block.
Mandalay Resources Corp; One Of The Market's Most Efficient And Undervalued Miners
- Mandalay has a strategy for growth and past performance has shown it can stick to targets.
- The company is ramping up low cost production over the next few years.
- Mandalay is growing through the acquisition of undervalued assets and the company has a net cash balance.
- Management is concentrating on shareholder returns.
- Considering Mandalay's past performance and scope for growth the company is significance undervalued compared to peers.
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