I think this one is a good little prospect, it is a profitable iron ore mining company whos major shareholder is Shougang Concord International, which is a Chinese state owned steel manufacturing company (among other things) . MGX was one of the first companies last year to announce a reduction in demand from China and it’s share price was punished quite severely for it.
As the rest of the market collapsed over the next six months it’s price continued to drop further, so it seemed to take twice the hit of other ore companies just for being the bearer of bad news. More recently it has renegotiated its ore prices in line with the deals Rio and BHP received (a 33% reduction). It’s mines are producing well with drilling done at new sites with expansion probable in 2010. Ore sales are continuing to increase after the intitial drop in the december quarter last year. I think it is a geniune business that it still undervalued by the market.
Cheers Craig
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