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MCR 37.5¢

business briefing yesterday

  1. dolphin58

    1,539 Posts.

    Attended the SIE briefing with MCR, WSA, TIR yesterday.

    Mincor now completely unhedged, and will only build up a minimal hedge program over the next year to 18 months - all 3 MD's remain long term bullish on Ni sp because there just isnt enough producing miners at the moment to put a dent in the demand/supply line long term.

    Any market discussion on Ni retracing was thought to eminate from analysts who just dont have enough long term data on demand/supply stats and an adequate previous parallel scenarion to compare this unique situation to (Asian demand/lack of exploration 15 yrs/low stocks etc etc).

    Voisey(?) Bay looks to come on stream end 2006/07 -up to 60,000t/annum Ni, but with growth rates in demand it was thought that there still wont be enough supply around.

    The panel thought the greatest threat to Ni sp was long term supply deficiency, which may force consumers onto other alternatives.

    MCR have 4 mines online with a 5th MAJOR mine predicted within 12 months coming out of the exploration.

    There has been some posts on HC querying MCR reserves with all sorts of mine lives and mine production patterns quoted. From known reserves, without any further resource expansion or new finds the scheduled production from reserves is approximately
    :fy04 10,500t, fy05 12,800t, fy06 16,000t, fy07 11,000t, fy08 6,000t.

    Dividend stream will definitely continue and profit forecasts are forshadowing a major jump in NPAT.

    What wasnt detailed, and we can understand why, was the impact of their current resource expansion program and new resource identification program in terms of future resource tonnages added..

    Next MCR mine at Miitel/Mariners zone will not add much to mining costs as its just the petrol/logistics costs of an additional 30km of transportation in the trucks!

    My view is MCR clearly have demonstrated their prominence in the mid-tier, and lead the pack.

    If WSA are around $1.20, my guess is MCR will be $1.30 within a few months as all of this starts to come to light.

    I note on the LME stocks are down to 16,500 tonnes and the a$spot price is still bouncing around $18,500-$19,000/t.

    More to come but Ill put something together later.

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