16-Jan-2022: Update: I usually add updates to the END of these valuations, but I'm going to add a short update at the TOP this time because MEP is being taken over by Andromeda Metals (ADN), their partners in the Great White Kaolin joint venture (JV) and the Natural Nanotech technology JV. MEP currently own 25% of the GWK JV and 50% of the NN tech JV. After ADN complete this takeover, they will own 100% of both - as shown on page 3 of ADN's 05-Nov-2021 AGM Presentation - see here: Andromeda Metals - Investor Presentation (andromet.com.au)

The takeover is all scrip and means that MEP shareholders will receive 1.15 ADN shares for each MEP share that they hold. ADN have closed at 21.5 cps for the past three trading sessions, and based on that, MEP shares are worth 24.725 cps, which I'm rounding up to 25 cps, my valuation for MEP.

Coincidentally, I had a 25 cps price target in place here for MEP from mid-March 2021 to early September 2021, at which point I halved my PT down to 12.5 cps based on all the hype having been drained out of the stock and sentiment being clearly negative at the time. This takeover shows that the real value is clearly closer to that 25 cps level. Back in March 2021 their rapid share price rise suggested they were heading there, but it took until now for them to actually do it, and they haven't actually done it yet, but they closed Friday (and Thursday and Wednesday) at 24 cps, and the takeover values them at 24.725 cps based on ADN's SP of 21.5 cps ($0.215), so that's close enough for me.

There's not really much of an arbitrage left now in the MEP share price to be buying here, i.e. less than 1c per share between the SP and the actual value implied by the takeover, so I wouldn't be buying at these levels unless you just want to buy ADN and are doing it via a small discount through MEP.

I have traded MEP before (here and in RL) and made money, and in purely percentage terms they have been one of my most successful trading stocks here on SM, however the dollar values of those trades were pretty insignificant unfortunately.

While I currently do not hold any in RL or here, I have a buy order in place for MEP here on SM, but that is at a lower price point and is there purely to cancel out my MFG sell order dollar for dollar so that the MFG sell order (which is priced at $23.50/share, well above where MFG are currently trading) doesn't distort the actual cash I have available here to buy more shares. In other words, I do not expect that MEP buy order to go through at the limit price I have set. I'd certainly take it if it did happen, but two things would have to occur first, being (a) my MFG sell order would have to go through at $23.50/share or above, and (b) the MEP share price would have to close down at 17 cps which implies that ADN would have to drop down to about 15 cps. At those prices I would be happy to get back in, but I do NOT expect that to occur, certainly not before the takeover is completed.

For more info on MEP, it's probably best to check out ADN (Andromeda Metals) now, coz they are going to absorb MEP into their business during the next month or two. ADN was the source of much profit here for some, particularly during the "Strawman Classic" competition, where members who held a very concentrated one or two stock portfolio containing ADN did extraordinarily well. If you're bullish on high quality kaolin, they have a superb project there. They just need to execute on their vision as well as possible, within budget, and while the economics still stack up really well. I do not follow ADN, so I don't have much to say about that, other than that the project looks very promising at first glance.

Click on the image to make it bigger, then click again on it to return to this. The following is what I've written on MEP previously:

Circa March 2020 (I think): Minotaur (MEP) is a base metals exploration company that has had some success in the past. They found the Prominent Hill copper/gold deposit back in 2001 that was developed by Oxiana, who later merged with Zinifex to become OZ Minerals Ltd (OZL). OZL still mine Prominent Hill today and have formed JVs with MEP to try to discover more commercial base and precious metals deposits. MEP have other JVs with other companies also. Apart from their prior success, MEP is one of the better and more active explorers. However, they are very high risk because they are explorers, not producers, and their share price is driven by news and sentiment. Sentiment is very low currently, and so is their share price. They're OK for a trade sometimes, if you buy down at these levels (3c or below). If they rise by one cent you get a 33.33% gain, and they will release some new drilling results every so often which do sometimes get the market interested in them again. They've been going for decades, and always find a way to keep going, despite their operating environment being very tough at times (as it is now). Looks like a good trade from here, although you may need some patience. And don't regard them as an "investment". These types of companies aren't investments, they are not investment grade companies, they can be good for a punt with a very small portion of your capital, but that's it. Never bet the farm on them.

25-Sep-2020: Update: Time to raise the PT for MEP. I think they have the momentum to reach 7c from here now. When I valued them at 4c (six months ago), they were trading at 2.8c, so they put on +43% to reach that PT (price target) within 6 weeks, then they've put on another +37.5% to reach 5.5cps (where they closed yesterday). They did briefly tag 6cps last month. They're one of the busier base metals explorers in Australia, and they have a number of JVs with large producers where the larger companies pay for Minotaur to do the exploring for them, and Minotaur share in the upside when they find something of commercial value (viable deposits that can be mined profitably). They can go years without finding anything really good, but patience will be repaid (and then some) when they do. Still risky of course, very speculative, but one of the better and busier speccy explorers on our market, for those who are into that sort of thing with an appropriately small percentage of their investable capital.

06-Oct-20: Moving my valuation up a little due to the Great White Kaolin Joint Venture between MEP & ADN. Recent Highlights of that JV - concerning the Hammerhead Kaolin Deposit - as reported by ADN included:

1. The inaugural Mineral Resource Estimate reported in accordance with the 2012 JORC Code and Guidelines has been completed for the Hammerhead Kaolin Deposit in South Australia.
2. An Inferred Resource of 51.5Mt of Bright White kaolinised granite is estimated using an ISO Brightness R457 cut-off of 75 yielding 27.1Mt of minus 45-micron quality kaolin product.
3. The Resource contains a sub-domain consisting of high halloysite-kaolin totalling 4.7Mt.
4. The Hammerhead Deposit is very similar to the Great White Deposit and perfectly suited for the high-quality porcelain ceramics market.
5. Recent drilling undertaken in May 2020 has determined that the resource remains open to the east, south and northwest.

Very promising.

And that's in addition to the other JVs that MEP are involved in, including a few with OZL.

Update: 16-Mar-2021: New PT: 25 cps.

Update: 14-Sep=2021: New PT: 12.5 cps. Halving my PT from 25 cps - which looked achievable when I set it 6 months ago - as MEP were over 20 cps and rising fast, but they ran out of steam it seems on the very day I posted that 25 cps PT. It's been all SE and then due East since then, with MEP currently bouncing around 10 to 11 cps. Their share price is all about sentiment and sentiment is usually all about their news flow. I took profits in RL and sold down my SM position - it's still in my SM portfolio but it's only a small position, and showing a +393.63% gain today (@ 11 cps) mostly because I sold most of them in November at 17.5 cps, having paid just 2.5 cps for them originally - on 27-Mar-2020. Now THAT was a great COVID-low pick-up!! Those sort of opportunities don't come along too often. However you would never bet the farm on a company like this because they are explorers. They don't even develop projects, they let their JV partners develop projects or they sell off their projects. They are happy just finding the stuff. Suitable for a small speculative punt with money that you can afford to lose, when they're super-cheap (which they ain't right now) but I figure it's better than a lottery ticket because these guys have some seriously good form for finding viable mineral and metal deposits. The main downside is it can sometimes be a long wait between drinks. And most people don't have the patience, so the share price will drop away when there's months of no news. Not currently holding MEP in RL.

16-Jan-22 Update: As explained at the top, MEP are now being taken over by ADN with an implied value of just shy of 25 cps based on ADN's SP of 21.5 cps (MEP shareholders will receive 1.15 ADN shares for each MEP share they hold). I sold the last of my MEP at 18 cps on 11-Nov-2021. Not currently holding MEP or ADN.

Further Reading:

South Australian kaolin clay deposit a gamechanger for nanotechnology in reducing carbon emissions - ABC News