Meeka Metals Limited

ASX:MEK

Meeka Metals Limited

ASX:MEK
TradeAdd trade order Follow Unfollow Set Price Alert
$0.240 (+2.1%)
Last close price
#56
Rank
8
Held by
14
Followers
TradeAdd trade order Follow Unfollow Set Price Alert
Reports (2) My Report Forum Investors
Forum Topics MEK MEK Val Update

Pinned straw:
BkrDzn
Added 2 months ago

Update the val given gold price has marched a lot higher. Val now at A$5500/oz vs $4500/oz which gives NPV/sh of $0.272 vs $0.200 despite the dilution that has occurred since. This is +21% upside at the current SP of $0.22.

~11-12wks into commissioning and ramp and MEK has been oddly quiet although I would hazard and say that if anything was not going right in a significant way, it'd have leaked out. But instead the SP is hitting new highs and melting up with the gold sector.

Given the close of the valuation gap (i.e. SP to NAV has shrunk) despite the rise in the gold price, this is getting to fully valued territory imo. With the gap closing, MEK needs a nee fundamental driver (maybe good recs in the OP feed that drives higher production) otherwise the SP will be driven more as a proxy of gold price movements and relatively operating leverage (i.e. incremental margin expansion). As such, this is getting close to an area to consider booking profits and rotating into other gold names with value.

But what would I know as with the power of hindsight, I have been a bad seller of MEK.

SudMav
Added 2 months ago

Out of curiosity, have you updated your model to strip out the $46m odd expenditure from Year 0 in the Dec24 production profile? Or is this just increasing the price to match the current price

I haven't had a chance to update my numbers in depth ,however my back of the envelope model is pretty close and currently sitting around the .26ish mark at the current price to AUD.

I agree with everything you said and I am probably looking to trim a bit in the coming weeks if the valuation gap keeps closing.

11
BkrDzn
Added 2 months ago

I haven't rolled forward for that despite ie being sunk. That said, there is an offset for bringing the UG capex in early plus the other items in the raise which is $31m. So netting all off is ~0.005/sh var to my val. Not big enough to create an error in using val as a marker for a selling decision.

7
BkrDzn
Added 2 months ago

FWIW, Argonaut recently upgraded MEK to $0.37/sh but this is the price deck assumption as production is same and opex is a little higher than the DFS.

4fca72a0793758f0d57356823f6c551845b293.png

This is how one considers the val upside as once the fundamental gap to ~29c is closed, the move to a value like the above is mostly gold price driven all else equal.

9
SudMav
Added 2 months ago

Just when I had my sell order ready to trim back my holding a bit to take some profits, they came out with a ripper announcement this morning. Key items being:

  • Sep 25 gold production is significantly higher than originally planned
  • Thick high-grade drill results from Turnberry North with one assay having 1.26 g/t ad 48m
  • The additional findings at Turnberry north will extend the pits by approx 2 years, and grow the underground production opportunity
  • Key timing updates, including the timeframe for additional surface resource drilling for growth around Andy Well and Turnberry


With the gold price running up another $300 to AUD since my last post I'm happy to be sitting on my shares for now. My updated back of the envelope calculations are now pushing my assessment closer to the 36c range that Argonaut put on this one.

Massive thank you to @Bear77 and @BkrDznfor the great writeups on this stock, its been a massive winner for me here and IRL and your commentary helped me understand the opportunity here.


Below are some of the images from the announcement linked abovee1e744831008e597c71b7996dba4b734b0a8f3.png18036846382771b0a43b48e52ce8a385280d66.png

d54aee8ea6da4128dffe889ff87730cb4f9645.png

14