Mount Gibson Iron Limited (MGX)



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General Information
Company Name: Mount Gibson Iron Limited
Stock Code: MGX
Website: www.mtgibsoniron.com.au
GICS Sub-Industry: Steel
Market Cap ($M): 235
Equiv. Shares (M): 1,091

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 0.215 $ 0.225 $ 0.230 $ 0.210 $ 0.215 8,527,600 0%

Current Broker Consensus Recommendation more
Recommendation: Sell (3.5)
Recommendation Date: 27th Jan 2015
Brokers Surveyed: 4

Company Overview

Business Description:
Mount Gibson Iron Limited (MGX) is involved in exploration, development and mining of iron ore in Western Australia. The company has three major projects being: Tallering Peak, Koolan Island and Extension Hill. For FY13, total ore sales were 8.8Mt. The total mineral resources and reserves as of June 2013 stood at 88.6Mt @ 61.9% Fe and 45.2Mt @ 62.1% Fe respectively.

Strategy Analysis:
Mount Gibson seeks to maintain and grow long term profitability through discovery, development, participation and/or acquisition of mineral resources. The aim is to lift and sustain production beyond 10 million tonnes of iron ore a year and to extend life to beyond 15 years through exploration and development and/ore acquisition. Mount Gibson Iron reported NPAT down 71.4% to $37.1m for the half-year ended 31 December 2012. Revenues from ordinary activities were $416.2m, up 10.4% from the same period last year, reflecting lower realised iron ore prices, broader product mix, and early adoption of new waste accounting requirements. Diluted EPS was 3.41 cents compared to 12 cents last year. Net operating cash flow was $43.13m compared to $123.16m last year. The interim dividend declared was 2 cents in line with 2 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F -80.2 -7.4 40.8 -3.1 4.0 17.4 100.0
2015  F -57.0 -5.2 -148.4 -4.4 4.0 17.4 100.0
2014  A 117.7 10.8 26.5 7.7 4.0 4.8 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Arrium (ARI) $573 M -0.6786 -0.9987 71.3333 0.8156 650.0000 8.9862 40.10 0.00 0.00
BlueScope Steel (BSL) $2,830 M -- 1.7011 0.4342 46.2523 17.1235 11.9396 0.00 0.99 2.37
Fortescue Metals (FMG) $6,352 M 0.7497 -0.7452 -0.0913 2.1874 8.5859 9.4488 10.41 4.85 4.98
Independence Group (IGO) $1,108 M 0.9316 1.1350 0.0803 23.9130 11.2006 10.3683 1.69 3.02 2.85
Mount Gibson Iron (MGX) $251 M 0.0351 -- -- 2.6048 -- -- 17.39 0.00 0.00

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
MGX 0.40 15.3 0.19 10.00 0.26
Market 0.84 15.3 1.25 2.05 1.53
Sector 0.61 13.4 0.67 1.33 2.69

Directors
Name Position Start Date
Mr Andrew Ferguson Alternate Director 24 September 2012
Mr Hui Seng Lee Non-Executive Chairman 29 January 2010
Mr Russel Christopher Barwick Non-Executive Director 16 November 2011
Mr Simon Bird Non-Executive Director 23 February 2012
Mr Alan Jones Non-Executive Director 28 July 2006
Mr Paul Dougas Non-Executive Director 16 November 2011
Mr Li Shaofeng Non-Executive Director 07 November 2011

Management
Name Position
Jim Beyer Chief Executive Officer
Peter Kerr Chief Financial Officer
Andrew Thomson Chief Operating Officer
David Stokes Company Secretary

Substantial Shareholders
Holding Name
154,166,874 (14.14%) Shougang Fushan Resources Group Limited, True Plus Limited and its subsidiaries
154,166,874 (14.14%) Shougang Corporation Group/Shougang Concord Group
282,992,277 (25.95%) COL Capital Limited
279,877,774 (25.66%) APAC Resources Ltd (formerly Shanghai Merchants Holdings Limited)

Calendar of Events
Date Event
27 January 2016 Report (Quarterly)
09 December 2015 Report (Annual)
13 October 2015 Report (Quarterly)
09 October 2015 Report (Annual)
19 August 2015 Report (Prelim)
16 July 2015 Report (Quarterly)
16 April 2015 Report (Quarterly)
18 February 2015 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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