Q: Could you give your opinion on the future of MJS Thanks
5i Research Answer:
MJS is a very interesting small-cap gold mining company. The company’s flagship project is the Songjiagou gold mine located in China. Although revenue is cyclical, MJS is still profitable and has consistently generated positive cash flow in the last five years. Yet MJS is trading at less than net cash on its balance sheet, with a net cash balance of $120M compared to its market cap of $83M. We think if the company initiates a dividend or buyback of some sort, MJS could see a multiple re-rate from here, the setup is quite attractive, but it is still highly uncertain if the company would initiate a capital return or not. In addition, investors need to be aware of the tiny market cap and the illiquidity.