Bell Potter maintains MZI buy recommendation

By Trevor Hoey. Published at Jan 20, 2017, in Mining

Bell Potter has described mineral sands producer, MZI Resources’ current position as an ‘inflection point’ as the company ramps up production at the Keysbrook project in Western Australia.

Bell Potter said the production results for the December quarter were 17% ahead of the September quarter, but the broker saw the record production of MZI and its highest value product, L88 (leucoxene) as the key takeaway.

Production was in line with Bell Potter’s expectations with the broker describing the performance as a ‘comfortable beat’ and an endorsement of the higher value mineral assemblage being processed.

However, fiscal 2017 will still be a year of transition for the company with Bell Potter forecasting a loss of $9.1 million prior to recording its maiden profit of $14 million in fiscal 2018, representing earnings per share of 7 cents.

As this implies a conservative PE multiple of 4.3, Bell Potter has maintained its buy recommendation and only slightly lowered its 12 month price target from 53 cents to 50 cents, representing a premium of nearly 70% to MZI current price.

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.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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