Fund Manager Summary on Metals X Ltd (ASX:MLX)
Metals X Ltd (ASX: MLX) is positioned favorably amidst significant supply constraints in the tin market, driven by ongoing disruptions in the Democratic Republic of Congo (DRC), Indonesia, and Myanmar. Fund managers note that after the closure of the Bisie mine — a major global tin supplier — Metals X emerges as a leading pure-play producer, which could lead to substantial cash flow, potentially exceeding $45 million this quarter alone. The company boasts a strong balance sheet, with a market cap of $520 million and net cash projected to rise to approximately $250 million by the end of Q1 CY25. However, risks persist due to the fragile state of global tin supply and the unpredictability of tin prices. Fund managers advocate for enhanced transparency in capital allocation and further resource development as strategic imperatives for bolstering investor confidence and driving long-term value.
Commentary From The Managers
There are 4 insights from 2 fund managers regarding their investment in Metals X Ltd (ASX:MLX) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
NGE Capital
27 May 2025
$0.55
Summary
- Tin producer with a 50% interest in the Renison Tin Operation, Tasmania.
- Tin price remains elevated due to challenged supply from DRC, Indonesia, and Myanmar.
- Increased production driven by higher ore grades from Area 5 and Leatherwood and improved mill recovery.
- Strong balance sheet supporting operational stability.
- Recent strategic investments in First Tin plc and Elementos Limited; unsolicited approach to acquire Greentech Technology International Limited.
- FID on Rentails Project expected in 4Q CY2026.
- High operational leverage to tin price enhances profitability potential.
- Potential for mine-life extensions through resource conversion, exploration, or nearby tin deposits.
- Supply deficit forecasted to increase as tin demand grows, supporting long-term price uplift.
- Improved transparency on capital allocation and returns to shareholders could alleviate investor concerns.
- Increased direct share ownership by the board could enhance investor confidence.
Cerutty Macro Fund
31 Mar 2025
$0.69
Summary
- Cerutty Macro Fund discussed Metals X Ltd over a year ago as tin prices rose due to supply disruptions in Indonesia and Myanmar.
- Ongoing issues in Indonesia related to mining permits and a major mine closure in Myanmar have significantly impacted global tin supply.
- Recent events in the DRC have led to further supply constraints, particularly with the closure of the Bisie mine, representing ~7% of global tin supply.
- Tin prices surged to nearly USD $39k/t, remaining the only metal to outperform gold year-to-date.
- Despite a market sell-off, current tin prices remain high at approximately USD $35k/t, with supply disruptions persisting.
- Metals X is now the sole listed pure-play tin producer, poised to greatly benefit as a tier-1 producer.
- Previous performance indicates a significant cash flow capability; MLX generated $30m at a lower tin price and could see $45m in Q4CY24 at current prices.
- The company has a strong financial position, with a market cap of $520m, net cash of $220m, and no debt.
- Future supply challenges and an advantageous balance sheet position suggest a positive outlook for MLX despite market uncertainties.
- The Renison deposit has a substantial life expectancy until at least 2035, with an average production rate of ~10kt/year.
NGE Capital
31 Dec 2024
$0.42
Summary
- NGE Capital reports that Metals X Limited (ASX:MLX) was a strong performer in 2024.
- Performance was driven by a strengthening tin price and a weakening AUD against the USD.
- Improved production rates from the Bluestone Mines Tasmania JV contributed positively, particularly from the high-grade Area 5 deposit.
- Solid supply-demand fundamentals have supported tin's performance, contrasting with weaker performance in other base metals due to weak Chinese demand.
- NGE Capital believes the outlook for tin remains strong due to a lack of significant supply growth.
- Ongoing risks to supply from major producer countries like Myanmar and Indonesia are noted.
- There is increasing demand for tin driven by applications in energy transition and semiconductors.
Cerutty Macro Fund
31 Mar 2024
$0.36
Summary
- Recent price action signals the potential onset of a bull market in base metals, influenced by China's economic recovery and increased demand.
- Cerutty Macro Fund began building a position in base metals in Q4 2023, focusing on Canadian copper producers and explorers.
- The Fund added tin exposure in early 2024 through Metals X, attracted by its simple structure and strong cash flow.
- Our bull thesis on Metals X centers on tin market dynamics and potential shareholder value on the balance sheet.
- Forecasts predict supply shortfalls in the tin market beyond 2025, contingent on production stability in producing countries.
- Indonesia faces significant challenges in tin production, including export bans and corruption allegations.
- Myanmar's tin production is also unstable, being affected by militia control and new taxation policies.
- Global tin inventory drawdowns have begun, with LME inventories falling 43% from December 2023 to March 2024.
- Metals X is a proven low-cost tin producer in a tier-1 jurisdiction with a robust balance sheet and no debt.
- With a market cap of $330m and a cash position of ~$155m, Metals X shows strong financial health.
- Recent updates indicate over 10 years of production potential, with exploration upside and new off-take agreements.
- Expectations for strong quarterly net cash flow due to reduced marketing costs and high tin prices.
- Market pricing appears excessively conservative, potentially due to concerns around Chinese ownership and board interests.
- Management announced a capital return initiative, which the Fund views positively for future stock performance.
- Metals X is undervalued and expected to be re-rated amidst its strong operational profile and market conditions.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Investment Ideas Scanner
Why fund managers bought Vinyl Group (ASX:VNL): acquisitions fuel $7m revenue growth
Why fund managers still back Netwealth (ASX:NWL) after A$101m payout and record inflows
Meeka Metals (ASX:MEK): Commissioned mine, potential to double
Why fund managers backed Advanced Innergy (ASX:AIH): IP‑led subsea growth
Harvey Norman (ASX:HVN): Fund managers spot hidden property-value upside
Fund managers on Hub24 (ASX:HUB): record inflows & market‑share gains
Why fund managers back Nine Entertainment (ASX:NEC): QMS deal, tax windfall and growth pivot
Pharmx Technologies (ASX:PHX): marketplace launch & Stockview adoption
June 2025: Why fund managers backed Pepper Money (ASX:PPM) — 12.5c special dividend signals strong cash generation
Deep Yellow (ASX:DYL): Paradice Jun 2025 — Tumas FID potential
Frequently Asked Questions
Who is investing in Metals X Ltd (ASX:MLX)?
Fund managers including Cerutty Macro Fund and NGE Capital have invested in Metals X Ltd (ASX:MLX).
Why do fund managers invest in Metals X Ltd?
Fund managers invest in Metals X Ltd primarily due to its strategic position as a pure-play tin producer with strong growth prospects amid ongoing supply disruptions in the tin market. The company holds significant assets, notably a 50% interest in the Renison Tin Operation, contributing to elevated production levels. Its robust balance sheet, with minimal debt and substantial net cash, enhances its risk/reward profile. Additionally, projected tin price increases driven by a supply deficit position Metals X favorably for future earnings and potential returns.
What happened to Metals X Ltd (ASX:MLX)?
There have been no recent updates from fund managers regarding Metals X Ltd although fund managers including Cerutty Macro Fund and NGE Capital have previously commented.
What is the short interest in Metals X Ltd (ASX:MLX)?
The short interest in Metals X Ltd (ASX:MLX) is 0.06% which makes it the 441st most shorted stock on the ASX. Of the 886.4M shares that Metals X Ltd has on issue, 514.3K have been sold short.
What does Metals X Ltd (ASX:MLX) do?
Metals X Ltd. engages in the production of tin in Australia. It is principally is in the operation of tin mines, exploration and development of base metals. The firm holds interest in Renison Tin operation. Its projects include: Rentails, Wingellina Nickel-Cobalt and Central Musgrave. The company was founded on July 23, 2004 and is headquartered in South Perth, Australia.