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Mineral Resources’ (ASX:MIN) recent troubles are, surely, well known to anybody reading this by now. But do they truly matter?
Allegations have been reported by national mastheads for weeks that company chief Chris Ellison was stung for being a bit, uh, creative with his taxes back in the day.
That the company has acknowledged, and even noted Ellison’s ‘regret.’ So not really an ‘allegation’ at this point. But further allegations have since surfaced that ASIC may be investigating the company.
The board earlier this week made an interesting statement where it said the company expected further speculation on this front until the board could “determine” matters.
Strange response, but sure
“MIN also notes media speculation and coverage regarding ASIC making inquiries … there may be continued speculation until the board is able to determine matters,” the company wrote on Tuesday.
How, exactly, MinRes’s board can’t determine whether or not ASIC have reached out to it remains unclear.
But HotCopper users in the relevant announcement thread were net bullish on the whole, even though one could note the latest response from the MinRes board didn’t stand quite so strongly behind Ellison’s presumed innocence.
Earlier announcements could be fairly interpreted as putting forward a notion it’s all just a big understanding – but Tuesday’s release didn’t really stray into value judgements. To be fair, that isn’t a real indicator of anything.
HotCopper users shrug
But HotCopper users’ overall positivity could be based in the world of reality and not under caution.
After all – we’ve just seen Wisetech (ASX:WTC) bounce back from a scandal surrounding its billionaire CEO, and so in that way, there’s some similarities with MinRes. In Wisetech’s case, all its founder had to do was resign as CEO and stay on as consultant.
Happy market, happy life for Wisetech. But there are some differences in the two to note.
It could evolve to be seen MinRes doesn’t get it quite so easy, given according to some reports Ellison’s proclivities ultimately burned the company’s own shareholders.
But, reading recent HotCopper comments, there’s clearly many people who are still willing to stay on board.
And that, in the long run, could be a rational position.
No man an island
While the company’s already-well-known CEO has dominated much of the attention given to MinRes in recent weeks, underneath that one man at the top, there’s a whole iron ore company getting on with the job.
In its Thursday quarterly, MinRes retained its FY25 production guidance for iron ore. In the last few months, it’s sold a 49% interest in its Onslow project haul road to Morgan Stanley for $1.1B.
Since July, the company has shed 570 roles, especially in response to lithium downturns.
The Onslow iron ore play now remains its main focus; to that end, the company launched a specially designed transhipping vessel earlier this week: The MinRes Montebello.
The ship is already at work. Using MarineTraffic, as of 2.40pm Sydney time, you can see the ship is dropping off iron ore to two Chinese bulk carriers just offshore. (Well, presumably it’s iron ore, anyway.)
Then there’s the question of MinRes’s recent move into onshore gas projects in WA. For that, too, the company had a positive update on Thursday.
Monday the next big catalyst
In a sentence: It’s sold its gas projects to Gina Rinehart’s Hancock for $1.1B, which has seen MinRes shares jump 10% on Thursday to $39.92/sh.
Shares were $53/sh in early October, they hit an intramonth low of $34.12/sh last week, and now they’ve gained another $5 to come close to $40/sh.
The next big catalyst will be MinRes’s boards announcement to the market on Monday, November 4, which it has repeatedly stated will be the big explainer everyone has asked for.
Lawyers were appointed last week to assist with these matters. We could find a lot of what was in Tuesday’s response to the ASX foreshadowed the company’s legal position.
Time will tell. But for now, it appears markets think the sell-off might have been too much.
MIN last traded at $39.92/sh.
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