E25 0.00% 23.0¢ element 25 limited

The frustrations for MZM investors have been enormous but as a...

  1. 75 Posts.
    The frustrations for MZM investors have been enormous but as a very large holder, I believe I can see what is going on with the people in control and what will transpire from here on out and over the next 12 months. I don't necessarily agree with the model they have operated on as it has proven to be a very long term model and outside the normal role of that which the company was set up to follow.
    Rather than apply all available funds to their own direct exploration projects, they have made investments in other listed companies as a secondary means of having exposure to projects there with upside.
    Although no MZM direct exploration success, the one tick they get is that via cash generated within, the number of issued shares remain tight and at a modest 83,464,350.

    Whereas, the majority of their peers who also set up shop 10 years ago, have more like an average of 300 mil shares on issue now. So, MZM deserve a small tick in that department. The rest of it though has been dull and with poor performance delivered to shareholders.

    However, the BIG catalyst now is in the form of their investment in DANAKALI and its immediate prospects to deliver to MZM an enormous cash injection from what I believe will emanate as a result of a take-over of DNK within the next 12 months at a minimum of $ 2.50 / DNK share, thus providing MZM with a potential cash injection of around $ 25 million or $ 0.30 for each MZM share. Upon this event unfolding, MZM shares being tightly held would SOAR and in my opinion they would hit a new all time HIGH..ie: above $ 0.96 per MZM share.

    MZM have a strong balance sheet and IF any joy comes from their exploration or other MZM investments such as BUX & EXC (both looking positive), then any positiveness from that will simply be a bonus in my view.

    Therefore, one method of following this projected development I have painted is to just monitor the DANAKALI (DNK) developments as I have outlined in a posting on the DNK thread today as follows:

    The DNK story progresses like a well oiled Rolls Royce in the making and failing a “world event” it will most certainly prove to be a world tier 1 project. Management has maintained a very professional approach and performance, so going forward, future investors will be very regretful at not having an exposure now to this very viable project and at this very point of time. As is the usual case though with unique projects such as this, DNK will most likely and ultimately succumb to being taken over by one of the large international fertilizer companies. Such a take-over of DNK though will not be successful below a share price of at least $ 2.50 per DNK share with the first pitch probably appearing ex funding approval and around midway through the construction period which would equate to around mid 2018. Meantime though, the DNK share price will likely trend upwards to around the $ 1.50 area as the more formal heads of agreements for production off-take and funding approvals are finalized.
    This past week witnessed a very significant event with DNK and the emergence of the CAPITAL GROUP OF LOS ANGELES becoming a substantial shareholder with the announcement of them holding 16,700,000 DNK shares which is 6.79% ownership of DNK. This is a huge catalyst for the DNK share price.

    The CAPITAL GROUP is an American financial services company, established in 1931 and ranking among the world’s largest investment management organizations with US$ 1.4 trillion in assets under management. The CAPITAL GROUP have owned TWO investments in Australia, namely:

    Amcor (9.42%) and Fortescue Metals Group ( 7% ) – DANAKALI is its THIRD investment in Australia !   ( thus far owning 6.9% ) and will likely grow !

    So Friday’s performance with the DNK share price rising 15% is undoubtedly the result of other investors following the CAPITAL GROUP lead, a group who are meticulous with their research and very possibly the front line holder for an eventual predator of DNK. This aspect cannot be discounted at this stage.

    On the surface, it appears that investors only have ONE way to obtain an exposure to Danakali and that is to purchase shares in DNK. Interestingly though, this is NOT the only method of entry to gain an exposure to the Colluli potash project, which infact is DNK's sole project by their 50% share of the project.

    The Chairman of Danakali is also the Chairman of minnow company named MONTEZUMA MINING COMPANY (MZM) and in studying the last Montezuma quarterly report, among other MZM investments it can be seen that for its size, Montezuma has the ability to own a remarkable holding of around 10,000,000 shares in DNK (at a total cost price of < 30 cents/DNK share).

    MZM own outright a total of    7,527,369 shares in DNK = 3.10% of DNK, PLUS MZM also owns   2,272,727 35 cent options = 0.92% of DNK (after MZM convert)

    MZM total ownership in DNK =  9,800,096 shares in DNK = 4.02% of DNK

    MZM have only 83,464,350 issued shares & share price $ 0.13 = Market Cap of just $ 10.85 million !

    MZM have a large range of exploration projects of questionable potential (?) + other investments in listed companies... BUT,

    Forgetting any other MZM interests, the question to answer is:

    What happens to the MZM share price if within 12 months DNK receives a take-over offer at $ 2.50 / DNK share and MZM then receiving $ 25 million in CASH !?
    Such an outcome would mean that apart from the existing very strong MZM balance sheet, it would then have an additional $ 25 million cash which equals a cash injection of $ 0.30 / MZM share.

    Such a likely outcome with DNK and the cash MZM would receive from a low takeover of DNK at only $ 2.50 / DNK share would surely result in the MZM share price rocketing to over $ 1.00 a share.

    MONTEZUMA shares at 13 cents are certainly worth considering as far as being a real alternative and much higher leveraged exposure to an investment in DANAKALI in my view.

    That's my take ! and meantime, wouldn't it be good to see the CSIRO come out and say that the MZM Butcherbird project has a great future in producing Mangamese Dioxide as a component in the manufacturing of batteries.
    I think the DNK picture seems more likely.

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