Malaysia Smelting Corporation (MSC): is currently looking to acquire concessions for 3-4 tin mines in Msia and Indonesia to tap into strong demand from China's booming electronics industry. The co may invest up to RM200m (US$65.7m) to increase its mining assets in the near term...
The co has earmarked RM80m of the RM104m raised from the recent Spore listing (25m shares @ $1.75/ sh), and intends to borrow the rest, to finance devt of new mines.
MSC currently operates 2 mines in the Msian state of Perak and Indonesia's Bangka Island. It also processes tin at its 2 smelting plants in Penang and Bangka, which have total capacity of 60k tons...
Last year, MSC together with its Indonesian subsidiary PT Koba Tin had total refined tin output of 45.4k tons, making it the 2nd-largest producer in the world behind China's Yunnan Tin.
MSC is adding a mining unit to raise its production by 20% cent, or ~360 tpa at its Rahman Hydraulic mine in Perak from 2H11...
On the industry, mgt noted that the lowest tin price level at which the industry can remain roughly profitable is US$15,000-20,000 a tonne. 3mth tin on the LME closed at US$28,250/ mt yday, off from a record high of US$33,600 hit in Apr but up around 5% so far this year.
Sias notes global tin consumption exceeded production for the past 3 out of 4 years, and may result in global tin shortage and hence help to support the commodity's price...
Co swung to net profit of RM 28m in the latest 1Q11, reversing 2 consecutive quarters of losses of nearly the same magnitude. Annualizing the latest qtr numbers, stock trades at 4.3x P/E.
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