Malayan Smelting Corp: Is in talks on partnering with Traxys in Congo after rules to stop minera purchases funding war slashed sales of ore from the country. MSC signed deal with Congo last mth to explore mineral concessions in Maniema province held by state-run Sakima mining …..
As the country improves transparency in the mineral trade, MSC may sign a JV to develop Sakima’s concessions in Maniema, North and South Kivu. We note that news could be a catalyst for futher expansion in production capacity of grp, which currently stands at 65,000 mt pa with mines in Malaysia and Indonesia being grp’s key contributors……
We remain positive on grp’s outlook, with global Tin ASP’s having doubled in the past 2 yrs, and rising utilization rates for grp mines which could translate to higher production and sales vol. At current price, valuation appears undemanding, with grp trading at 4.5x FY11E P/E vs peers’ average of 13x.
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