GREY:MAAFF - Post by User
Post by
pangloss81on Jul 27, 2009 5:10pm
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Post# 16169779
cormark june 26
cormark june 26
Cormark released a report on june 26 (as did cannacord). They were pretty enthusiastic about the MOU and seemed to believe it would be agreed upon. I added the bold in the following paragraph, it was not in the original.
We are reinitiating coverage on MagIndustries as the restriction period following the latest equity financing
that closed on June 22 has ended. During the restriction period, MAA also announced an updated
technical report for the Kouilou potash project in the RoC and an MOU regarding an investment by a
strategic partner from China. These are significant developments. If completed, the strategic investor will
bring all the capital required for the first 600,000 tpy phase of the potash project, substantially de-risking it.
The potential to complete financing this summer is high with or without the strategic investor as
negotiations with previous debt providers continue to move forward. For valuation purposes, we believe
the improved financing situation far outweighs the higher capex and opex that the updated technical report
outlined. Clearly, the financing is a binary event, where the stock will either go much higher or languish
should the process drag on. All evidence to date suggests that the likelihood of financing is greater now
than it was at any point of time in MAA’s history. For this reason, we are increasing our target to C$2.00
from C$1.50. We are maintaining our Buy (S) recommendation, noting that closing of the financing will act
to remove the speculative qualification.