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iShares Global Materials ETF V.MXI


Primary Symbol: MXI

The fund seeks to track the investment results of an index composed of global equities in the materials sector. The fund seeks to track the investment results of the S&P Global 1200 Materials Index (the Underlying Index), which measures the performance of companies that S&P Dow Jones Indices LLC (SPDJI), a subsidiary of S&P Global, Inc., deems to be part of the materials sector of the economy and that SPDJI believes are important to global markets. It is a subset of the S&P Global 1200.


ARCA:MXI - Post by User

Comment by wilwalon Oct 07, 2015 2:36pm
282 Views
Post# 24172545

RE:RE:RE:RE:Great Results!

RE:RE:RE:RE:Great Results!RR, yes I'm leaning toward sooner than later for a few reasons.  

Primarily, I'm thinking that IMG is getting close to making a mine development commitment at Boto.  They have been working on a Scoping Study for a year and a half so if they don't know now whether they are going to build a mine there, then they win a prize for worst miners ever.  So whether they go it alone on a mine development or in a JV with another miner, they are going to want to take full ownership of Diakha and Siribaya.  Certainly no JV partner would enter into a deal with IMG without MXI out of the picture first.  With a Resource Estimate imminent for Diahka, they will have the basis for valuation.  At this point, it's anybody's guess to the ounces and recoveries of the Diakha deposit as well as confirmation that Diakha can be processed in the same manner as Boto.   The results of the metallurgical studies will give them all that information.

The other thing that could make an early buyout is a larger merger or takeover of IMG.  It wouldn't surprise me that something is in the works there.   Similarly, if a larger miner is going to take over IMG, they will want 100% of Diakha sewed up because Boto/Diakha is IMG's best prospective asset.....and it may become the flagship operation for a long time when other deposits are delineated.

It's getting to the point where there are few compelling reasons for MXI to remain part of the JV regardless.  There may still be some drilling to do in Diakha which at any rate would be wrapped up in a few months which would definitely signal the next logical end of the JV.

As far as why no one is buying in.  In a macro view, have a look at the 10 year TSX Venture Index.   In 2007, the index was nearly 3400.  Today, it is 542.   That speaks loudly as to the appetite for little juniors right across the board.  It is practically zero.  MXI will be one of the few that will get out of this deadly cycle alive.  If this was 2007, this stock would be trading at over $1 easily but we will never see that much in the near future.  On a micro view, investors still don't know how many ounces are there and how attractive they will be to IMG, hence a high risk play to anyone new.  Most of us who know the project intimately feel that downside risk has been significantly reduced but your typical speculative investor doesn't feel that way, and they are sitting in the middle of a market sentiment that is probably at its worst.  Plus, it doesn't help that IMG is one of the least favoured of the larger miners out there.

Anyway, I think the imminent Resource Estimate is the most likely juncture for a paper buyout from IMG.  The next juncture is the final resource estimate for the maximum size and depth of Diakha, which would be around summer 2016.  Definitely, that would be the end of the JV although Karita may still be under MXI's control (or its successor company).  For now, I think there is more than a 50% probability we could be out by January.
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