MLS 16.7% 0.3¢ metals australia ltd

fundamentally a great buy.

  1. 13,666 Posts.
    lightbulb Created with Sketch. 1289
    I'm onboard. This stock gave me a lot of reasons to buy it. They will be working on an upgraded resource. See below.

    "Metals Australia Ltd (‘Metals’) is pleased to announce that a comprehensive diamond drilling programme at Manindi is now complete. The diamond drilling programme was designed to test the extensions of the existing resources and allow an upgraded resource to be calculated."

    That is a section from the last announcement "Manindi Zinc Project Continues to Exceed Expectations"

    Now from the BBY broker report on the 25th of January 2007.

    Recent drilling of EM targets has been very successful which is forecast to lead to an upgrade in the resource base which currently sits at 1.05Mt @ 7.64% Zn. Resources lie within 4 zones of mineralisation to a maximum depth of only 200 metres. Considerable scope exists to find additional resources along strike and depth as confirmed by downhole EM studies which indicate the presence of further mineralisation at depth.

    Now from the latest announcement in regards to their Zinc project

    "2. RESOURCE MODELLING
    The current Manindi Zinc deposits represent a substantial zinc resource, with excellent potential for increases in both tonnage and grade. The previous owners of the project last calculated the resource in 2000. Metals Australia has since completed in excess of 7500 metres of RC and Diamond drilling, which has yet to be included in the resource calculations. The drilling undertaken by Metals has increased the physical size of the resources, both along strike and at depth. The recent drilling has frequently intersected high-grade zinc
    mineralisation in each of the deposits, which have additionally shown ore grade copper and gold mineralisation."


    How big will this resource be? It has been extended along the strike and at depth. The past resource also didn't include copper and gold mineralisation. The resource upgrade will be big IMO. If you go through past announcements they have had significant hits when expanding this resource. Now that the drilling campaign is over..it is time for me to take an entry with a longer term view. I have held MLS previously but traded them for profits.

    A good comparison is JML and their Jaguar deposit. See Jaguar deposit resource below.

    Reserve 1.6mt @ 3.1% Cu, 11.7% Zn, 0.72% Pb, 120g/t Ag

    Now The Jaguar deposit is an underground mine. This will be a lot more expensive to operate that the operation that would take place at MLS's Manindi project. Their project will be open cut and will have cheaper operating costs. Jabiru now has a market cap of 620 million. Yes they are closer to bringing on a mine but MLS is leading down the same track..it is just at an earlier stage. MLS is looking to be a very attractive buy atm.

    When you throw in their uranium prospects in Namibia...where they have recently defined 11km of uuranium mineralisation at its Mile 72 project in Namibia they are a good spec play to me with a market cap of just under 60 million. See breakdown of shares on issue below.

    MLS: 669,608,765
    MLSOA: 106,150,000


    Fully diluted market cap is just over 69 million and to the end of march in their last cashflow report they had just under 6 million at bank.
 
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Mkt cap ! $12.57M
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0.3¢ 0.3¢ 0.3¢ $74.84K 28.40M

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