$50K Challenge MSE Review

As stated in my $50k Challenge Annual Review post I will be providing an update on the stocks that are in my portfolio as quite a bit has happened since I purchased them. Every week I will release an update on 1 stock with this week focussing on MSE.

Company Name: MSE

Purchase Price: 0.006

Current Price: 0.013

Corporate Update:

The company has managed its cash extremely well during the last 12 months and is currently sitting on a cash balance of $2.34m (as per March quarterly cash flow announcement).

In the last couple months the companies directors and major shareholders have continued to purchase large amounts of shares on market which is fantastic.

The Abercorn Project:

Abercorn is a large-scale kaolin prospect, which has the potential to underpin the production of kaolin mineral product for global markets and industrial compounds manufactured by using our novel and proprietary mineral processing technologies.

The recent drilling program has resulted in the following JORC (2012) compliant resource:

* Total Maiden Resource for the Abercorn Project area is 39.06Mt yielding 36.8% -20µm grading 28.6% Al2O3 & 1.18% K2O, using a cut-off grade of 26% Al2O3

* 60% of the Mineral Resource is classified as Indicated

* The resource remains open in all directions with less than circa 10% of the Project are being drilled, leaving potential for the resource to be significantly upgraded

* The Abercorn Project has demonstrated it contains significant scale and a very consistent, high quality grade of mineralisation

Zeolite Acquisition

Since purchasing MSE the company has acquired a very exciting piece of technology to supplement the existing Abercorn project. The Company is working with the University of Queensland School of Chemical Engineering to develop and commercialise proprietary synthetic zeolite mineral processing technology that revolves around kaolin (clay-based) feeds.

“The technology has the potential to fast track development of the Abercorn Project, with a low capital cost to reach commercial production, utilising the company’s existing kaolin feedstock. It also provides potential opportunities to monetise broader application of the technology outside the company by offering a significantly lower cost method of manufacturing zeolites compared to conventional processes.”

There aren’t many ASX companies that have been able to produce synthetic zeolites and the ones that can do this have market capitalisations multiples higher than MSE. The only two I could find include:

NMT: $80m mc

PET: $190m mc

MSE: $16m mc

What’s next:

  1. Continue with Halloysite testing
  2. Progress mainland China Synthetic Zeolite manufacturer end user research program
  3. Undertake Zeolite mineral processing technology partner collaboration investigations

To find out more about how I analyse stocks that fit the criteria of the $50k Challenge  check out my Penny Stock Investing course.

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