06-Nov-2020:  Australia's MiningMonthly.com: Mastermyne poised for growth

[by Lou Caruana, MiningMonthly.com]

Mastermyne poised for growth

UNDERGROUND contractor Mastermyne is well positioned in the 2020-21 financial year with an order book of about $240 million made up of contracted and recurring revenue, according to managing director Tony Caruso.

He said, in the company's annual report, that this placed it in a strong position for further growth while maintaining safety standards during the year.

"We have plans in place to grow and expand the business and importantly we are financially positioned to deliver on this," he said.

"As with every financial year we expect to bring through additional revenue from projects that are working their way through the tendering pipeline.

"This base line order book will underpin the continued generation of strong cash flows and allows us to maintain our excellent capability and profitability and to be well positioned to invest in equipment and people and mobilise quickly as new projects are awarded."

Caruso said many of Mastermyne's sites had again completed their work without incident over the full year.

"We will continue to focus heavily on our safety culture and invest in training and our systems to ensure that everyone  who comes to work at Mastermyne goes home safely at the completion of every shift," he said.

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[I do not hold MYE shares.  I am avoiding companies that have exposure to declining industries such as coal, particularly themal (/energy) coal.  MYE have looked very cheap for a couple of years, and will likely continue to do so, because of that exposure.  Despite the growth predicted by their own management, they face significant headwinds within the industry segment in which they specialise.  I hold positions in similar (mining services) companies who have minor exposure to coal, and I note that they are all REDUCING their coal exposure, while increasing their exposure to gold, copper, and other base and precious metals.  Coal and Iron Ore are considered "bulk metals" and they both have unique drivers.  I am wary of both coal and iron ore at this point, but particularly coal.  MACA (MLD), a company I sometimes hold, although I do not hold currently, have recently announced that Carabella Resources has asked them (MACA) to place their Bluff PCI project mine in Queensland on care and maintenance while the coal price remains below economic levels and uncertainty remains regarding Chinese Government policy relating to Australian metallurgical coal imports.  PCI = Pulverized Coal Injection, and is recognised as an increasingly valuable step in the process of turning iron ore into steel.  That's Met Coal, and it's becoming increasingly uneconomic to mine - due to the prevailing price, and thermal/energy coal is in an even worse position - with even stronger headwinds.  I just avoid coal exposure as much as possible.  There are plenty of ways to make much easier money in the market, in my opinion - with a lot less risk.]