I'll let @BkrDzn answer that question of yours @thetjs however I would just add that personally I totally ignore the prospect of dividends with these project developers and re-start plays, because they will be totally focused on executing their plans and building up a handy cash buffer to protect them from known risks as well as unforeseen circumstances, however when a company is in Meeka's position, with no debt and a nice pile of cash to work with, dividends might actually not be too far away once they get their mill up to nameplate capacity, however realistically I would consider the possibility of dividends with MEK are still a minimum of 2 years away. The other consideration is that companies in their position will most probably want to recycle profits into further exploration drilling to increase their gold resource & reserve, so if they go down that path, and that's probably what you want them to do as a shareholder who wants to see maximum value-add, then divvies are likely 5 years plus away, so would be very hard to make assumptions about dividends at this very early stage, even if the company did have a dividend policy that they've already made public (which they have not). Just my thoughts FWIW.

Cheers @Bear77

Appreciate your thoughts on this.

MEK is the first restart that I’ve been invested with so it’s all new to me.

Always great to hear how other people approach similar situations.

I typically don't put in as part of my thesis for a play like this and I note that I have spoken to the co a few times and given how young they are, it appears if they get this right, it'll be the foundation for building an empire. Aspiring to be like CMM or EMR I figured. That doesn't mean dividends can't/won't come but they seem unlikely any time soon and I note that CMM and EMR are two of the best performing (operationally and share price wise) gold companies on the ASX this decade to date and neither pay anything out. IFf they prove their worth, the capital is best reinvested into the business than paid out imo. That goes for any type of company.

EDIT: Forgot to say, my models will generally include calculating NPAT and FCF so there is the capacity to assess the potential for and size of a dividend. This in not in my MEK model specifically.

@Bear77 @BkrDzn thank you both for the further insights, and keen to get to tap into your knowledge with a question.

As the company has a very healthy balance sheet and likely to generate some decent returns once the infrastructure has been built, would there be a possibility of this being a takeover opportunity once the cash starts to flow in?

Or is the overall size of the mine and longevity adversely impact the potential interest?

I am not looking to bake this into the assumptions of my calculations, however just trying to ascertain the size of the potential opportunity (if there is one at all)

I think any successful gold miner is a potential takeover play @SudMav and Meeka Metals are getting close to being one (a successful gold miner), however it probably pays to look at where their processing plant (gold mill) and gold mines are in relation to other larger players in that area of WA:

First - here's Meeka Metals' tenements:

Nearest town is Meekatharra (hence the name of the company, Meeka Metals), just 46 km SSW (bottom left on the map above) of MEK's Andy Well gold mill at their Murchison Gold Project.

And look who is around Meekathara, within a 110km radius of MEK's mill:

Westgold (WGX) is in the area, and Catalyst Metals (CYL) - whose SP has done better than 4x in the past 12 months - is to the north east, as shown above.

There's more action south of Meeka, where Westgold (WGX.asx) have a big presence, and Monument Mining (TSX-V: MMY, FSE: D7Q1) is also in the area. Odyssey Gold (ODY, formerly Odyssey Energy) is a smaller player in the bottom left corner of that map above also.

RMS is a little further to the south:

In that map above, Meekatharra is where the two roads intersect above Cue.

Here's a map that shows the main central WA goldfields:

[Source: E79 Gold Mines (E79.asx) in April 2023]

And here's a map of all of the gold mines in Australia as at December 2023:

Source: https://www.ga.gov.au/scientific-topics/minerals/mineral-resources-and-advice/australian-resource-reviews/gold

Note: That map above also includes mines that produce gold as a byproduct of other production, such as BHP's Olymic Dam, Prominent Hill and Carrapateena mines in SA, the Hillside copper mine, also in SA, and EVN's Ernest Henry copper-gold mine in Queensland.

So Westgold (WGX) and Catalyst (CYL) are in the frame as possible suitors down the track, with Ramelius (RMS) and Canadian-listed Monument Mining also being outside chances of possibly having a go in the future at taking MEK over.

Another thing to keep in mind is that Meeka isn't building a gold mill, they're recommissioning an existing one (which is far less risky):

Source: https://meekametals.com.au/murchison-gold-project/

That Andy Well gold mill - as it was then known - used to belong to Doray Minerals (DRM.asx at the time, which I held shares in through their development of Andy Well and their first year of production, and did well out of), and you can still see the right end of the Doray logo on the large silo on the left of that image above, even though that image (above) is from the Meeka Metals website today. The mill was designed and built by GR Engineering Services (GNG.asx) who I also held at the time, and still do. GNG commenced construction of Andy Well in September 2012 and commissioned the mill in July 2013.

After a profitable run, Doray decided to place Andy Well into C&M in late 2017 (see here: https://www.miningweekly.com/article/andy-well-heading-for-care-and-maintenance-mode-2017-07-06) due to high costs and a lower gold price at the time - after they ran out of the higher grade ore there. Around a year later (in 2018) Doray signed a binding Sale and Purchase Agreement (SPA) to divest Andy Well to Galane Australia, a subsidiary of Canadian gold miner Galane Gold Ltd (TSX-V: GG) however that deal was trashed when Silver Lake Resources acquired Doray Minerals in an all-scrip deal in April 2019, so Andy Well became an asset belonging to SLR.

SLR then sold Andy Well and the Gnaweeda gold project (which also came from Doray Minerals) to Latitude Consolidated in February 2021, and Latitude changed its name to Meeka Gold Limited in December 2021 (and their ticker code to MEK) to better reflect the location of their projects, with the mill just 30 min (46 km) via National Highway 95 (the Great Northern Highway, the longest highway in Australia, spanning roughly 3,200 kilometres) from the WA town of Meekatharra.

SLR then acquired Red 5 (RED) last year (June 2024) in a reverse takeover (where RED actually acquired SLR because RED had the slightly larger market cap at the time) and changed their name to Vault Minerals (VAU). Luke Tonkin, the MD of Vault (VAU) was the MD of SLR before that merger and the MD of RED left the company to make way for Tonkin.

Luke Tonkin is a bit of a prick IMO, but that's probably because I'm a fan of Raleigh Finlayson's work at Genesis Minerals (GMD) and previously at Saracen Minerals, and Luke Tonkin was and remains a large thorn in Raleigh's plans to consolidate the major gold assets in that Leonora to Laverton area under Genesis Minerals (GMD) ownership - as demonstrated by Tonkin's multiple attempts to scuttle GMD's purchase of SBM's (St Barbara's) Leonora assets in 2023 (Raleigh won that battle eventually) and the fact that Tonkin has merged SLR with RED (now VAU: Vault Minerals) to stop Raleigh from acquiring the KOTH mill (which was a RED 5 asset, now owned by Vault) - KOTH is surrounded on THREE SIDES by GMD tenements - see map below - and Genesis (GMD) are the natural owners of that mill in most people's opinion:

By the way, I have yet to find out if they're related, probably not, but VAU's MD Luke Tonkin should not be confused with Stuart Tonkin, the MD of Northern Star Resources. Stuey is a far better human being.

That's probably enough history. So, yeah, I reckon MEK could be a takeover target, but not sure if there's any urgency around that at this point. Sometimes gold companies need to buy good deposits to feed existing mills, but in MEK's case they have their own mill, so that's not a factor. Sometimes gold companies need to buy mills to process their own gold, but WGX and CYL already have enough milling capacity as I understand it, so the likelihood is that MEK are either going to get taken out by somebody as an empire-building play, with no obvious synergies, or MEK are going to become empire builders themselves as @BkrDzn suggests, which wouldn't be a bad thing at all. As Joshua suggests, have a look at the 5 year share price charts of CMM and EMR to see what can be achieved by competent management in this space who know how to get quality gold projects into production on-time and on-or-under-budget.

Both Capricorn Metals (CMM) and Emerald Resources (EMR) have management who together established Regis Resources (RRL) at Duketon back in the day (all of whom left Regis well before the 30% of Tropicana acquisition and then the McPhillamys debacle), and many of them previously also worked together at Equigold before that - who got taken over by Lihir, who got taken over by Newcrest, who got taken over by the world's largest gold mining company, Newmont. Very high calibre operators, those dudes.

I've heard good things about this Meeka Metals Management Team also. Lets see what they can achieve. My money would be on them knocking back (/blocking) any early takeover attempts unless it was at a rediculously good premium, because I reckon they've got plans that go well beyond Andy Well, now known as their Murchison Gold Project. This is just the beginning for Meeka.

So my money would be on Meeka being a longer term growth story rather than a quick takeover play.

Thanks for the history on Andy Wells @Bear77

I feel like a big pinboard and a lot of red thread is required to track it all.

On takeover or general corporate, the Murchison has been the hot bet of M&A with the WGX's, RMS's and CYL's but they are buying or dealing for additional ore feed to fill their own mills as they are full but short ore long term (i.e. RMS) or underfed (i.e. WGX, maybe throw CYL in here). Whilst it not out of the real of possibility, MEK restarting and filling it own mill reduces M&A chances on that basis. It is better as a platform to aggregate smaller ore bodies like the bigger peers do.

A thought that came to me during the day is about what @Bear77 said about a restart being lower risk. That is true but I would say that when it comes to WA gold, whether greenfield or brownfield, the plant/engineering is rarely the problem and often the plants will meet or outperform spec (GRES plants are good plants). The issue that causes problems is usually geology and with a brownfield, that is just as important as a greenfield development as you have to make sure the issue in the past wasn't geology related (in which higher commodity prices won't always solve or solve well, ask CAI lol (and I know, debt hurt a lot)) and with MEK I don't believe that geology or related is a problem.