Metals X (ASX: MLX)

Year-over-year, the company’s annual revenue gained 30% to A$285M. Furthermore, its cash increased by A$73M to $294M and its working capital increased by $85M to A$312M. The company has no debt, so its balance sheet remains extremely strong.

Despite the 30% revenue gain, profit was up by only 2.2% to $105M (around A$0.12/share). This is largely because the 2024 results benefited from a $20M positive adjustment to the value of a financial asset, whereas in 2025 the equivalent adjustment was only +$5M.

Overall, the results were good. However, the company’s management continues to frustrate us by not paying a dividend. If any company is in a position to pay a meaningful dividend, it is this one.

The MLX stock price is up by around 130% since the stock’s addition to the TSI List seven months ago. We expect that its long-term bullish trend will continue, but it could make sense to take partial profits near the current price.

The company currently has tin production of around 5600 tonnes/year, which would equate to annual revenue of about A$390M at the current tin price of A$70,000 per tonne. This means that — taking into account the company’s cash — it is being valued by the stock market at about 2-times annual revenue, which is low for a company that is not only very profitable but also is growing its profits.

MLX is an excellent stock in which to maintain a core position for exposure to a metal (tin) with bullish fundamentals.

Since being added to the TSI List in July of last year, the stock’s price has doubled. It has the potential to double again within the next 12 months and would be a reasonable candidate for new buying near A$1.00.

The company was already very profitable at a tin price of around US$30,000/t, but the tin price has since risen to more than US$50,000/t. Therefore, we expect that it will report strong profit growth in February when it issues its half-yearly financial reports. What we know at the moment is that the company’s cash rose by A$14M to A$294M during the December-2025 quarter and by another A$47M in January-2026.

MLX continues to perform well, both operationally and in the stock market.

MLX’s tin production during the quarter from the Renison mine in Tasmania was adversely affected by operational downtime and equipment failure. These issues were resolved by the end of the quarter, but they caused production to be down 17% quarter-over-quarter. They also resulted in higher costs and lower EBITDA. However, Renison’s cost structure is such that even when the mine has a bad quarter, it is cash-flow positive. During the September quarter the company increased its cash balance by A$24M to A$280M (A$0.31/share).

MLX continues to be a low-risk way to have exposure to tin, a metal with a bullish intermediate-to-long-term price outlook. The stock has a very low P/E ratio, creating the potential for a substantial rise in its price with no increase in the tin price.

The company had a net profit of A$52.9M, or A$0.059/share, during the 6-month period. This equates to an anualised rate of profit generation of $0.118/share, which means that the stock is trading at only 5.4-times earnings. Moreover, the company’s balance sheet is very strong, with A$271M of working capital and no long-term debt.

MLX is a low-risk way to have exposure to tin, a metal with a bullish intermediate-to-long-term price outlook. By virtue of its very low starting valuation, the stock also offers significant leverage.

Our one concern is that the company is not currently paying a dividend. If a company is not going to pay a dividend when it is very profitable and has a very strong balance sheet, then when is it going to pay a dividend?

MLX’s flagship asset is its 50% stake in the Renison tin mine in Tasmania. The company is very profitable by virtue of having a low cost of production relative to the current tin price and has a very strong balance sheet, with liquidity (cash plus cash equivalents) of A$258M and no long-term debt. Furthermore, it is being valued by the stock market at only 3-5 times earnings and is buying back its stock to take advantage of the low valuation.

At the moment we have no specific price target in mind, but in general we wouldn’t add this type of stock to the List unless we thought it had the potential to at least double in price within 18 months.

Resistance is defined by the March-April highs in the low-A$0.70s.

MLX owns 50% of the Renison Tin Operation in Tasmania and is Australia’s largest tin producer. The company has 886M shares outstanding, so it has a market cap of A$576M (~US$370M) at last week’s closing price of A$0.65. Moreover, given that the company has A$228M of working capital and no long-term debt, its enterprise value (market cap minus net cash) is only A$348M.

Over the past 12 months MLX produced 5580 tonnes of tin, which would equate to revenue of A$280M at the current tin price of US$33,000 (A$50,000) per tonne. This means that MLX is being valued by the stock market at about 1.3-times annual revenue, which would be reasonable if the company were not profitable. However, during the 2024 calendar year MLX generated a net profit of A$102M. This was possible because at A$32,000/t its all-in cost (AIC) of production was low relative to the tin price.

The tin price probably will trend upward over the next two years, which should enable MLX to grow its profits and to start paying a dividend.

For a commodity producer in a commodity bull market, the downside — from a speculator’s perspective — to having a large profit margin is that the leverage to future gains in the commodity price is reduced. In MLX’s case, however, there is ample leverage due to the low valuation relative to current earnings.

We suspect that the industrial metals sector of the stock market will come under pressure over the coming two months in response to a sizable stock market correction and a growth scare. If so, good opportunities to add/increase exposure to the stocks of base metal producers such as MLX will arrive during August, which is why we will wait for a pullback before adding MLX to the TSI Stocks List. For those who are interested in this stock, however, it would be reasonable to start averaging into a position near the current price.