Mineral Resources Announces US$750 Mn Senior Unsecured Notes Offering

Mineral Resources Announces US$750 Mn Senior Unsecured Notes Offering

On 9th April 2019, Mineral Resources Limited (ASX: MIN) announced about its offer up to an aggregate principal amount of US$750 million senior unsecured notes due 2027, subject to market and other conditions.

The offer will be made to qualified institutional buyers pursuant to Rule 144A under the United States Securities Act of 1933, and to certain persons outside the US in offshore transactions in reliance on Regulation S under the Securities Act.

The purpose of this is to use cash proceeds from the offering to refinance certain of its existing credit facilities and for general corporate purposes. Certain wholly-owned subsidiaries of the company will guarantee the notes.

In a previous announcement, Mineral Resources released an update on its dividend/distribution. Its dividend/distribution is A$0.13 (fully franked) related to the financial period ending December 2018 (six months) with payment date on April 17, 2019, ex-date on March 15, 2019, and record date on March 18, 2019. It provided an option of dividend reinvestment plan at DRP price of A$15.8094, with an issue date on April 23, 2019.

The company also announced its purchase of new equity in the Mt Marion Lithium Project (goldfields) in Western Australia. Its equity interest in Mt Marion increased from 43.1% to 50%, following the payment of A$51.9 million by Mineral Resources to Neometals.

In its McIntosh Joint Venture (MJV) drilling program (Mineral Resources (51%) and Hexagon (49%), the company announced that it had completed 87 drill holes with a total depth of 10,672.9 meters at the Emperor and Wahoo deposits and the Mahi Mahi and Threadfin exploration targets. The mineral intercepted includes:

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Emperor:

  • 8 meters at 9.1% TGC from 140 meters downhole (ERD021)
  • 18 meters at 7.3% TGC from 113 meters downhole (ERD020)
  • 16 53 meters at 6.2% TGC from 138 meters downhole (ERD016)

Wahoo:

  • 6 meters at 6.6% TGC from 69 meters downhole (WRC009)
  • 6 meters at 6.4% TGC from 50 meters downhole (WDD023)

In its half-yearly results, the company reported a decrease in revenue by 35% from $926 million in H1 FY18 to $555 million in H1 FY19. Its reported EBITDA decreased by 80% pcp to $72 million, whereas its normalized EBITDA decreased by 59% pcp to $102 million in H1 FY19. Its NPAT decreased by 92% pcp to $13 million in H1 FY19. The group’s capital expenditure increased by 598% pcp to $494 million.

On stock information front, at the time of writing (on 9th April 2019 AEST: 01:45 PM) the stock of Mineral Resources traded at A$17.14, up 1.121% with a market capitalisation of ~A$3.19 billion. Its current PE multiple stands at 26x, and its last EPS was noted at A$0.652. Its annual dividend yield has been noted at 3.13%. Today, it made day’s high at A$17.23 and day’s low at A$16.95, with a daily volume of 810,102. Its 52 weeks high was at A$20.70 and 52 weeks low at A$12.39, with an average volume of 1,390,494. Its absolute return for five years, one year and six months are 45.37%, 5.61%, and 9.57%, respectively.


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