Welcome To the Copper Fox Metals Inc. HUB On AGORACOM
CUU own 25% Schaft Creek: proven/probable min. reserves/940.8m tonnes = 0.27% copper, 0.19 g/t gold, 0.018% moly and 1.72 g/t silver containing: 5.6b lbs copper, 5.8m ounces gold, 363.5m lbs moly and 51.7m ounces silver; (Recoverable CuEq 0.46%)
Message: And now for something slightly different - MBC
Have a look at this one, looks like the management who have done a poor job to date are in blackout and an buyout might be happening as soon as by the end of the month.
I bought a few thousand bucks worth last week @ $0.075, hoping to see a nice return in my TFSA account.
Something to potentially flip quickly and make a few bucks whilst we wait for the paint to dry in the Teck due diligence office for SC...
Cheers
Max
A Brazilian Fertilizer Company That Remains Very Strong Buy
MBAC Fertilizer Corp. (TSX: MBC) has been absolutely pummeled over the past two years, dropping from over $2 to as little as $0.01 after investors were spooked by a default notice last week when the company stated its audited financials would not be prepared in time. The price has since recovered a bit from the overreaction as shareholders have started to believe that the delay is due to a possible buyout or other corporate transaction as a result of the strategic review led by Deutsche Bank AG. A buyout or purchase of MBAC's properties is a reasonable assumption to have given that there has been a lot of investment activity surrounding fertilizer companies lately, including the expression of interest in Encanto Potash's (TSXV:EPO) Saskatchewan property and buyout of Allana Potash Corp (TSX:AAA).
Acquisitions have happened closer to MBAC's operations in Brazil, led by Yara International which purchased Bunge’s fertilizer business in Brazil for $750 million and 60% of Galvani Industria, Comercio e Serviços SA, for an enterprise value of $318 million. The Case For Brazilian Fertilizer Stocks is an excellent read that summarizes the potential of MBAC and its peers. Brazil imports two-thirds of its fertilizer needs and is rapidly trying to increase domestic production.
The importance of fertilizer production is evidenced by the leniency MBAC has received from its creditors when most other companies with debt issues do not get such treatment. The debt extension deals announced in October extended the time to repay the loans by as much as two years, however the stock price continued to tank thanks to near-term working capital needs. This has left the company in a position where it is best served selling off properties or accepting a buyout offer rather than continuing on its own as management has not shown it is capable of leading this company and providing value to shareholders.
This article from the Value Investors Club has a broad target of $0.50 to $0.91 per share, depending on the price of SSP. The two main assets of interest would be the Itafos project which has achieved production (currently kept low due to working capital issues), so all it would need is maintenance capex of several million each year to achieve 500,000 tons of SSP production per year at full capacity. The second property, Santana, is estimated to also produce the same amount, but it is not developed yet and will need nearly $400 million of capital investment before production. Based on the recent valuation of AAA's project that will cost $642 million in capex to get to production plus $137 million for ICL to purchase the remaining shares in the company and interest in investing $250 million in EPO's project, Santana should easily be able to achieve a $50 million purchase price while Itafos would go for at least $300 million as the heavy capital spending period to get it up and running is behind it. That would be enough to pay off all loans and have about $50-$75 million left for shareholders. That would leave a broad target of $0.25 to $0.40 per share, more than 10 times the upside potential of today's stock price at 2.5 cents. Watch for a continued rise as the share price looks like it finally bottomed out this week after months of heavy declines. You can't get much more cheaper than this:
Acquisitions have happened closer to MBAC's operations in Brazil, led by Yara International which purchased Bunge’s fertilizer business in Brazil for $750 million and 60% of Galvani Industria, Comercio e Serviços SA, for an enterprise value of $318 million. The Case For Brazilian Fertilizer Stocks is an excellent read that summarizes the potential of MBAC and its peers. Brazil imports two-thirds of its fertilizer needs and is rapidly trying to increase domestic production.
The importance of fertilizer production is evidenced by the leniency MBAC has received from its creditors when most other companies with debt issues do not get such treatment. The debt extension deals announced in October extended the time to repay the loans by as much as two years, however the stock price continued to tank thanks to near-term working capital needs. This has left the company in a position where it is best served selling off properties or accepting a buyout offer rather than continuing on its own as management has not shown it is capable of leading this company and providing value to shareholders.
This article from the Value Investors Club has a broad target of $0.50 to $0.91 per share, depending on the price of SSP. The two main assets of interest would be the Itafos project which has achieved production (currently kept low due to working capital issues), so all it would need is maintenance capex of several million each year to achieve 500,000 tons of SSP production per year at full capacity. The second property, Santana, is estimated to also produce the same amount, but it is not developed yet and will need nearly $400 million of capital investment before production. Based on the recent valuation of AAA's project that will cost $642 million in capex to get to production plus $137 million for ICL to purchase the remaining shares in the company and interest in investing $250 million in EPO's project, Santana should easily be able to achieve a $50 million purchase price while Itafos would go for at least $300 million as the heavy capital spending period to get it up and running is behind it. That would be enough to pay off all loans and have about $50-$75 million left for shareholders. That would leave a broad target of $0.25 to $0.40 per share, more than 10 times the upside potential of today's stock price at 2.5 cents. Watch for a continued rise as the share price looks like it finally bottomed out this week after months of heavy declines. You can't get much more cheaper than this:
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