MACA well-positioned to weather commodities downturn
Although OC doesn’t invest directly in single commodity or single mine resource stocks, we do have exposure to the commodities thematic through quality mining services business, MACA Limited (ASX:MLD). MLD’s commodity exposure is predominantly across gold and iron ore; the prices of which have each been heading higher in recent months. Additionally, MLD has a well-diversified client base operating across more than 10 mine sites in Australia and at a large gold mining operation in Brazil (Beadell’s Tucano mine). MLD is well regarded as one of the best-in-class contract miners and ore crushers in Australia. Our channel checks suggest MLD has an excellent reputation among its clients and it typically operates in partnership with these clients under long-term contracts. Importantly, MLD has a strong “net cash” balance sheet that positions the business well to weather any protracted commodities downturn. We have lightened our holding in MLD into the ongoing strength of its share price which is at least partially being driven by the strong rebound in the prices of iron ore and gold. (VIEW LINK)
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Robert was appointed Head of Investments in 2009 and has been a Portfolio Manager since joining OC Funds Management in 2001. Robert is also an Executive Director of parent company, Copia Investment Partners.