MZI poised to deliver record March quarter production ahead of robust maiden fiscal 2018 profit.

Published 03-MAR-2017 16:46 P.M.

|

2 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

MZI Resources (ASX: MZI) provided a positive operational update on Friday morning, noting that in the first two months of the March quarter the group had already achieved its second highest level of quarterly sales since operations commenced.

This follows on from strong Heavy Mineral Concentrate (HMC) production in the December quarter from its Keysbrook operation located in Western Australia.

In the current quarter MZI has completed two major shipments of leucoxene products totalling 6500 tonnes of L70 and 7500 tonnes of its high-value L88. The group has also shipped 3118 tonnes of zircon concentrate, with a further 2000 tonnes anticipated by the end of the quarter which would result in record total quarterly sales volumes.

With MZI’s continued optimisation progress having achieved increased throughput rates for HMC and L88 Picton Mineral Separation Plant, MZI’s next bulk leucoxene shipments are anticipated early in the June quarter.

Improvements continue at the Picton plant with work expected to be completed during March and April. Work is well advanced at the eastern mining area to install and tie in the new transportable integrated Mining Feed Unit (MFU) which has previously been used successfully in mineral sands mining. Commissioning is planned for late March.

Production to increase as plant upgrades are commissioned in March

The forecast increased production due to the new MFU positions MZI to benefit from continued strengthening global market conditions for mineral sands products, particularly in titanium minerals.

Today’s news is consistent with broker expectations which point to a strong transition to profitability in fiscal 2018. Bell Potter is forecasting the group to generate a net profit of $14 million, representing earnings per share of 7 cents.

This implies a heavily discounted PE multiple of 3.7 relative to Thursday’s closing price of 26 cents. It would appear that MZI is currently being valued as an unprofitable explorer rather than a company delivering strong production, and on the verge of delivering a robust maiden profit.

Bell Potter has a buy recommendation on the stock with a 12 month price target of 50 cents, implying upside of nearly 100% to the company’s current trading range.

It should be noted here 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.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (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 and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X