Tin and copper lead Metals X higher

By Trevor Hoey. Published at Jan 25, 2017, in Features

Multi-commodity producer, Metals X (ASX: MLX) reported a promising December quarter result, particularly with regard to its copper and tin operations. This is timely given the strong performances by both commodities overnight with copper gaining 2.6% and tin up 2.4%.

From an operational perspective, the company’s Nifty copper project based in Queensland achieved production of 7900 tonnes copper contained in concentrates at an all in cost of US$2.15 per pound.

This compares favourably with the current spot price of circa US$2.70 per pound.

These results generated EBITDA of $10.1 million and an unaudited net cash flow of $7.2 million. The project’s progression to a cash flow positive operation has occurred earlier than management had previously flagged.

The group’s tin division generated EBITDA of $10.7 million in the three months to December 31, 2016, driven by slightly higher production compared with the previous quarter and a 10% price increase which is now in the order of $29,000 per tonne.

This provides margins in excess of $10,000 per tonne taking into account All in Sustaining Costs (AISC) are circa $18,495 per tonne.

Shares in Metals X have increased from 56 cents at the start of January to hit a 2017 high of 77.5 cents on Wednesday morning. However, this is still shy of the consensus 12 month price target of 82.5 cents.

It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

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