In a previous blog which you can see here  I pondered the possibilities for a Company called Melior Resources which we own at Takota. Could it become as promising as our holding in Acerus Pharmaceuticals (which I wrote about here ). We bought Melior as a simple corporate liquidation when it had more cash than market value and lobbied for the liquidation of the Company (see The Fight ) but rather than liquidate the Board bought a previously producing but at the time idled ilmenite mine and processing facility in Queensland, Australia for pennies on the dollar.
Fast forward several years and finally, and just now, the Company has completed a series of financings and offtake agreements that will provide them with the funds and the surety to recommence production in a much improved environment for their product. (Ilmenite is a feedstock for the production of titanium dioxide which is used in many products, for instance making paint white. By product Apatite is used in organic fertilizers)
With a mostly non-dilutive financing package and offtake agreements for some of their production Melior will now complete a short “construction” phase at the facility and is scheduled to be up and running by November with a first shipment of product by year end.
Meanwhile, ilmenite prices are firm and looking to stay that way for the foreseeable future given market dynamics.
Melior Resources is another discarded, never heard of name whose price does not seem to reflect its’s state of business development, and therefore, like Acerus, potentially a mispriced security.
***Takota Asset Management owns shares of Melior Resources on behalf of its Managed Accounts and Premium Value Partnership. In the future Takota may buy more shares, or sell some or all of its shares for its Managed Accounts and/or Partnership. Investors should seek the advice of their financial advisor before considering an investment in Melior, or do their own in depth due diligence of the Company, its prospects, and the very high risks inherent in investing in a Company that is in start- up mode and has yet to achieve positive net cash flow. This is not a recommendation to buy or sell Melior or any other security, but simply a comment on our rational for holding this security and its seeming similarity to another Takota holding.