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Good news keeps coming for Mincor

MINCOR Resources NL shareholders have watched their paper profits double, then quadruple over the past year, as the company continues to release good news from its nickel operations.

And some analysts are predicting the shares could double again by the end of the year, if mining results from its Wannaway purchase from WMC Resources Ltd, announced two weeks ago, meet forecasts.

Expectations are that Wannaway could prove just as profitable as the Miitel mine, bought in February after it took just three months to raise debt and equity finance of $29 million to fund the acquisition and working capital.

On news of the Miitel Mine purchase, Mincor’s share price rose almost overnight, from 6 cents to 16 cents.

According to DJ Carmichael senior analyst Peter Strachan, once analysts crunch through the numbers again, Mincor’s share price could rise quickly to 30 cents and then on to as high as 40 cents.

He said the company, through its Miitel joint venture vehicle with Clough Ltd and Donegal Resources, had managed to remove much of the risk of mining by securing a purchase and processing contract with WMC.

Mr Strachan said it was a great deal for all parties. WMC was able to offload its high-cost mining operations, Clough was able to expand its mining contracting fleet, while Mincor would not need to build a concentrate plant, as WMC had agreed to purchase and process the ore.

The price of nickel was one of the few uncertainties the Miitel JV still has to contend with.

Nickel producers have been sheltered by low prices as a result of the low Australian dollar, helping to maintain margins.

Mr Strachan said Clough entered into the Miitel JV arrangement in November as a way of securing more work for its mining fleet following the closure of the Telfer mine by Newcrest Mining Ltd.

“Clough found they had all these workers and equipment and nothing to do with them,” Mr Strachan said.

CIBC Eyres Reed Resource analyst John MacDonald recommended that people give thought to buying shares in the company, based on its strong operational results for the past quarter.

“It’s always worth while keeping an eye on what the company will do,” Mr MacDonald said.

On July 18, Mincor posted an operating surplus of $5.8 million for the three months ending June 30 for the Miitel nickel mine.

On the same day it also released results from a scoping study, showing that its 75 per cent-owned Reko Diq Copper Project in Pakistan is economically viable, based on a probable ore reserve of 78 million tonnes at 0.7 per cent copper using a 0.3 per cent copper cut-off.

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