Over the past year, Metro Mining Ltd (ASX: MMI) shares are almost exactly flat, falling 0.36% over the period.
But after the company's most recent production report, Shaw and Partners is bullish on Metro Mining's prospects and has reiterated its price target, which we'll get to shortly.
First, let's look at what Metro Mining reported recently.
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Record results and a stronger second half expected
The company last week said it had shipped a record 1.8 million tonnes of bauxite for the June quarter, up 7% on the same period last year.
The company said this was an "excellent result" given the impact of a tropical cyclone during the quarter and the recommissioning of its offshore floating terminal.
Metro Mining said it had $24 million in cash at the end of the quarter and US$31.5 million in secured debt.
On pricing, the company said:
Market conditions were soft in February/March when agreeing Q2 prices resulting in a 14% reduction in … pricing. With the market firming on the back of higher freight costs from Guinea, price rises of approx. 9% have already been negotiated for Q3.
Metro Mining Chief Executive Officer Simon Wensley said regarding the quarter:
Achievement of record Q2 output was pleasing given the post cyclone recovery and the absence of our primary transhipper, Ikamba for its 5 year dry dock service, for a portion of the quarter. In June, we demonstrated proof of concept of our new integrated planning and operating system and aligned management structure, thanks to focussed efforts from Metro and contractor teams. I expect our focus on production reliability, grade control and planning to coincide with excellent mining and shipping conditions to deliver over 5 million tonnes in the second half of 2026. As most of our freight is fixed, this will deliver lower operating costs straight to the bottom line in likely strengthening market conditions, as Guinea producers seek to cover freight and diesel cost rises.
Metro Mining said the war in the Middle East had been affecting the aluminium supply chain, with the effects continuing to play out.
The company said aluminium was already in short supply coming into 2026, "and the curtailment of Middle East smelters exacerbated the supply risks with London Metals Exchange prices peaking close to US$3800 /T during the quarter''.
This ASX mining stock is looking cheap
Shaw and Partners said in its research note on the company that Metro's cash on hand was well above their $11 million estimate, and the only negative from the quarterly was higher-than-expected costs.
The broker has a price target of $3 per share for Metro Mining, compared with the current price of $1.39.
Shaw and Partners added that the company is expected to start a previously announced share buyback during the current quarter.
