AEV 6.67% 1.4¢ avenira limited


  1. 1,118 Posts.

    "Remember these people who got in first will often to try and sell the "FMG & PDN" story to you."

    And then there's others such as yourself who will try and sell the RAU and POS and other fallen stocks story. Those stocks are no more relevant than FMG and PDN.

    None of those stocks or MAK are comparable - they all have different commodities which means:

    1) Different end users leading to being affected by totally different economic factors;
    2) Different geological profiles meaning different capital and operating cost structures, time to production and risk factors;
    3) Differing processing requirements which also affect capital and operating costs and risk (eg access to water is nowhere near as big an issue for MAK as for PDN) etc

    In addition they all have different geographical locations meaning differing transport requirements and differing effects on ability to find labour. The companies all also have different management.

    ETL, I think you'll find that none of those exact points you mention are being referred to in comparisons to PDN, FMG or the like.

    Where the comparisons are being made is to MAK's unique positioning of being the most advanced NEW company with first mover advantage in an industry that is at the beginning of it's boom, typified by massive price hikes in the underlying commodity.

    Like PDN (with ERA) in U3O8 and FMG (with BHP, RIO) in Iron Ore at the beginning of their re-ratings, MAK is the ONLY listed company on the ASX with leverage to the the newly booming fertiliser sector, where there are established players (IPL in MAK's case), and where there is a significant absence of other advanced companies.

    PDN had no equally undervalued competitor on the ASX during it's ramp up of Langer-Heinrich during 2005/6/7. FMG had/has no equally undervalued competitor (on the same scale) during it's ramp up of it's Pilbara operations.
    Similarly, MAK has NO COMPETITOR over the forseeable next 2 years for it's Rock Phosphate project.

    On top of that, both PDN and FMG rode the parabolic increases in U3O8 and Iron Ore prices, as there was no other stock on the ASX that was as close to monetising their assets, nor on such a large scale.

    Yes, each of these three companies have had/will have their own individual challenges to get into production and capitalise on the high commodity prices, but equally, each of these three companies have the distinct edge of first-mover advantage. MAK especially, at the current state of play, seems to have an extraordinarily economical project based on a pre-feasibility study, not based on pure conjecture.

    The sheer scale of earning to capex are extraordinary, and the opex figures also look very attractive when the MD states opex could be as low as $80/tonne. Personally I would consider this to be very optimistic, and would more than likely consider opex of closer to $130/tonne as a safer margin to use when de-risking the project... however, the point is that the number are attractive, and there are no other new companies with ANY numbers in the same sphere... better or worse!

    Aside from IPL, MAK is the only sizable exposure to the booming rock phosphate commodity on the ASX.
    This is the primary reason why there are comparisons to PDN and FMG:
    - the price of the underlying commodity is soaring
    - the project economics are sound already and benefit on an exponential scale as the commodity price increases
    - there is NO OTHER OPTION for investors looking to gain leverage to this sector from the ground-floor
    - the project is long-life and LARGE
    - the global demand is outstripping current supply with few alternative global supply solutions in the next few years

    These reasons are why there is bluesky potential for MAK... there are simply no sizable, equally advanced alternatives to this JORC compliant project.

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