What investors need to know about Mineral Resources’ presentation at the Macquarie Australia Conference

  • May 02, 2019 AEST
  • Team Kalkine
What investors need to know about Mineral Resources’ presentation at the Macquarie Australia Conference

On 1 May 2019, a leading Australian based mining company, Mineral Resources Limited (ASX: MIN) published a presentation for Macquarie Australia Conference 2019. The presentation contains its core business pillars, the YTD performance till March 2019, the innovative initiatives at Macquarie Australia Conference and so forth.

The core business pillars of the company include the mining services, commodities, profit share projects and innovation and infrastructure. The mining services business model of the company evolved from a traditional business model to profit share business model. The mining services comprise of crushing, processing, road and rail bulk haulage, camp services along with marketing and shipping.

The company’s other core business model comprises of commodities like lithium and iron ore. Further, the company mentioned that it currently has four profit share projects.

The presentation also highlighted the competitive advantage of the company. MIN has collaborated with selected clients to supply innovative superior-quality, as well as cost-efficient mineral processing, and mining infrastructure pit-to-port solutions.

The presentation mentioned that the company has a track record of delivering shareholder value. From FY2007 till FY2018, the EPS has grown by 20% per annum. The company had made a cumulative fully franked dividend payment of $3.97 per share. The cumulative pre-tax profit made by the company between FY2007 to FY2018 was more than $2 billion.

The YTD performance of the company in March 2019 for Mining Services are as follows:

Crushing:

  • At Koolyanobbing, the company started the Crushing contract.
  • The Wodgina crushing plant has started the production work.

Construction:

  • Wodgina Spodumene Concentrate project is 80% completed till date.
  • Mt Marion all-in 6% construction is completed, and the plant ramp-up take place between in April to June 2019.

Energy:

  • The company is progressing towards exploration and approvals for drilling targets in Perth Basin.

Mining:

  • At present, 45.2mwmt of material is moved.
  • At Marillana, the mine design and planning has started.

Supply Chain Logistics:

  • Around 10.1mwmt Ore was hauled, which included 7.7mt iron ore, transported by 125 road trains, 0.6mt Spodumene by ten road trains, and 1.8mt iron ore by 384 rail wagons.
  • A total 8.0mwmt ore was shipped.
  • Yilgarn rail operations started again, with the beginning of export from Port of Esperance.

The YTD performance of the company in March 2019 for Commodities are as follows:

Lithium:

  • At Mt Marion, around 297kwmt of spodumene concentrate was delivered, including 213kt of 6% with an average price of A$1,328.13 per wmt and 84kt of 4% with an average price of A$791.78 / wmt.

Iron Ore:

  • At Koolyanobbing, 1.8m wmt of iron ore was shipped.
  • The company was able to achieve A$95.89 average price per wmt.

Iron Valley:

  • Around 5.5mwmt was shipped at an average price of A$67.83.

Outlook for the next 12 months:

The company’s Mining services section, expect further growth of more than 20% in the external crushing business. MIN anticipates that the spodumene concentrate sales would start at Wodgina. Also, at Mt Marion, there will be the continued sale of spodumene concentrate to Ganfeng pursuant to offtake arrangement. The company is progressing towards planning and targeting to drill 1 well in Perth Basin by the end of CY2019. Besides, the company aims to become independent in gas supply division.

At present, the company expects the EBITDA at a consolidated group level, to be in the range of $360 million to $390 million. The company also advised that the sale price for shipping 6% of Spodumene concentrate, would be of US$682.38 per dry metric tonne by the end of June 2019 quarter.

The stock of the company is currently trading flat at A$15.540 (as on 2 May 2019, 2: 31 AEST).


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