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[AdamJ]

Actually if they are free traders than my questions are more valid. Why would they not take the company private? The same questions would stand if it was a Wall Street consortium as well.

It's actually 1.2 million tonnes and only from roughly 34 km of a total area of 1,400 km. The existing potential in that area could easily be for mining operations producing five times that conservatively. That is why anyone would take the company private before further results are available from the rest of the area.

Also, it's doubtful to hit a $1 shortly unless they NR includes verification of that additional $700 million in funding. That is how RBC has pegged a $1.25 price target. It's simple book valuation based on $1 billion capital/cash position divided by 800 million shares.

Edit: My mention of taking it private aren't in regards to the current deal but in the future before the average shareholder has a chance to maximize the investment fully. The reason to take it private is simply for more money. I'd expect (unless an agreement to the contrary is signed) a leveraged takeover attempt between 2012 to 2014. Increasing share price is of little benefit if you have to sell off your ownership in order to realize a return and Mag is a long way from needing to issue dividends.

[mrdbldub]

For those interested in Magindustries I suggest you check out their press release of 11 June, 2009; you will then have the facts as to whether the estimated tonnage is 600,000 or 1.2 million. As to the MOU I wouldn't be too worried about it given that there has been one extension on it's closing date from 31 July to 31 August, 2009. Plus given the vague nature of the language in MOU's their rider clauses there is little assurance the deal will get done. The Chinese Consortium, however, could be using the MOU as a bargaining chip with other other Potash producers i.e. " sell it to us at our demanded price or we'll buy our own mine. mrdbldub

[AdamJ]

If you did your DD than you'd know that Phase 1 is for 600k and Phase 2 is for an additional 600k in tonnage. So, I would suggest if you're interested in Mag than you should due your entire diligence on the whole company not just on the press releases in order to see the entire scope of potential.

Now the terms of the MOU are specific to the first phase but, it would be wrong to not take that second phase into consideration as financing for that could easily come out of the cashflow from Phase 1 not to mention the fact that it essentially doubles production.

It's doubtful this is a greenmail play based on a number of factors of which the most obvious is the majority ownership stake. Additionally it's not much of a bargaining factor to use a mine that's two to three years away from production and whose production alone wouldn't meet demand.

Traditionally MOU's are usually vague and a beginning point. If a deal is reached then there will be a more detailed formal agreement presented for shareholders to vote on.

[mrdbldub]

If those interested in Magindustries they would also read the technical inclusion in the press release of 11 June, 2009. In earlier reports put out by MAA they stated that phase one would be the reopening of the mine and mill and phase two would be the upgrading of the mine and the purchase of new milling equipment to increase daily production. I have seen nothing in their reports claiming 600,000 tonnes of ore. Also once the ore has been mined and milled the the result is 151.2thousand tonnes KCL of which 17.3 % is potash or 26.2 thousand tonnes of potash. The other probable 40.3 thousand tonnes of KCL would grade 17.6% of potash or 7 thousand tonnes for a total of 33 thousand tonnes of potash. the other parts of the milled ore would be magnesium and potassium which also have value. mrdbldub

[AdamJ]

That technical data is correct since it is pulled directly from the project page of Mag's website but, you need to look at the overall project details. Phase 2 is identical to phase 1. There is no need to cover production specifics when it comes to phase 2 as phase 1 hasn't even begun production.

Actually if you look at the size of the planned mines there is room to accommodate two more similar style mines or essentially add two additional phases. Obviously that would reduce the life of the current mapped resources to half but, it would quadruple revenue and present exceptional cash flow for establishing a standard industry mine producing 2 million tonnes.

If you look at the big picture it is still obvious as to why anyone would take this company private.

So, if all you're looking for is a double up than you may get it but, if you want the real money (20 bagger plus) once a deal is done with anyone the chances of that happening just got narrower.

Edit: Actually if you go to the webpage and watch their presentation you will see that phase 2 of the project is doubling of capacity which is not to be confused with stage 2 of phase 1 production. http://www.magindustries.com/innerpage.aspx?pageid=116

[mrdbldub]

I buy and sell stocks, I don't marry them. mrdbldub

[AdamJ]

wtf does that mean? If you're trading it than that's fine and I do the same but, I do look for exceptional long positions. This is one of those. Don't believe me? Look at Potash Corp sp history as an example.

If you don't care about the long term potential than why even discuss the project? I'm not going to debate the merits of swing vs long positions but, I do know without a doubt that the free position that I will hold in Mag will out perform any trading revenue I can generate from dumping them on a simple double up. $50k now or $250k to $500k in two or three years makes the choice pretty obvious.

[Rudee]

Adam - May I ask what your 12 month target is for MAA? I have a small position (10,000 @ .53) Which I have been holding long.

[AdamJ]

Originally Posted by Rudee Adam - May I ask what your 12 month target is for MAA? I have a small position (10,000 @ .53) Which I have been holding long.

If Potash prices increase next year than I could see it in the $1.50 to $2.00 range. The only way it could be higher is if the project progresses at a faster pace which is impossible.

[burieddeep]

I agree with Adam...

I would like to see this brought to a producing mine without going private.
If this mine were in Canada as opposed to Africa we would have seen our double long before now, they have enough cash to wait out any mou or not. They are closer to markets and next to the ocean, what is not to like, I just wish we could get news on the direction the company will take, and no takeover please.