MRE - Minara Resources

[Gordon Gecko]

I have been looking at pure nickel stocks and have taken a liking to MRE.

Their cash cost is $2-$2.5/lb. With nickel prices at $6.5/lb there is a good margin. the spin off of cobalt at $24/lb will reduce the cash cost significantly.

Their sp has dropped from a high of $3.5 to $2.20. I am aware of the $155mil Fluor settlement. But can't understand way it is lagging its peers.

Any other followers with any thoughts?

[mvander]

Productivity problems - the plant has never worked as designed and until they iron out the buts it might be more of the same

[Dutchy3]

Exactly one year after the last post on this one and we see a BIG WHITE into new air.

I'm LONG and thinking 2.10 should be seen again in a reasonable time frame

[Dutchy3]

Bit too shaky close to the CLOSE for me today. Closed out long position

[Realist]

I believe Fundamentally MRE is very good.. A resource stock that makes profits, has no debt, infact has $110M in cash. Well run - not issuing shares all over the place dilluting future earnings.

Nickel Market is strong, Cobalt okay.

P/E ratio of around 10. :eek:

Return on equity is excellent.

MRE may takeover some othersmaller Resource stocks??

A sound/safe investment in the resource sector, you could do alot worse than buying MRE I reckon...



Any comments? Your thoughts?

Technically it looks good as well. :D

[canaussieuck]

I agree, I got into it on a previous dip.

:)

[rederob]

I believe Fundamentally MRE is very good.. A resource stock that makes profits, has no debt, infact has $110M in cash. Well run - not issuing shares all over the place dilluting future earnings.
Nickel Market is strong, Cobalt okay.
P/E ratio of around 10. :eek:
Return on equity is excellent.
MRE may takeover some othersmaller Resource stocks??
A sound/safe investment in the resource sector, you could do alot worse than buying MRE I reckon...
Any comments? Your thoughts?
Technically it looks good as well. :D
MRE will do ok while nickel prices are high.
MRE's Murrin Murrin uses sulphuric acid in high-temperature, high-pressure autoclave vessels to aggressively leach nickel and cobalt from low-grade lateritic (oxidised) ores.
This doesn't mean much to the lay reader, but from an investor point of view it means that there is a "fixed cost" of production, so the greater the throughput, the greater the profits.
MRE has never come close to its targeted 40k tonnes nameplate capacity and as a result the cost of production remains much higher than desirable.
Anaconda left MRE its present facility (I think?) and many of the woes that had befallen it.
MRE is spending tens of millions on constant upgrades and improvements, and some headway has been made to improve output, but much more work is essential.
As a long term holder of this stock, I regard it as the Jana Pitman of the mining industry: Great early promise but fails to make the most crucial hurdles.
The technicals are totally irrelevant: Presently MRE is making a hell of a lot of profit so if prices are sustainable, this stock can double in price.

[Kipp]

MRE will do ok while nickel prices are high.
MRE's Murrin Murrin uses sulphuric acid in high-temperature, high-pressure autoclave vessels to aggressively leach nickel and cobalt from low-grade lateritic (oxidised) ores.
This doesn't mean much to the lay reader, but from an investor point of view it means that there is a "fixed cost" of production, so the greater the throughput, the greater the profits.
MRE has never come close to its targeted 40k tonnes nameplate capacity and as a result the cost of production remains much higher than desirable.
Anaconda left MRE its present facility (I think?) and many of the woes that had befallen it.
MRE is spending tens of millions on constant upgrades and improvements, and some headway has been made to improve output, but much more work is essential.
As a long term holder of this stock, I regard it as the Jana Pitman of the mining industry: Great early promise but fails to make the most crucial hurdles.
The technicals are totally irrelevant: Presently MRE is making a hell of a lot of profit so if prices are sustainable, this stock can double in price.

Rob, how do you think the chart is placed technically? As cannuck mentioned in the breakout thread- it's really banging on $2.70 peak tempting a breakout....

Does Minara have any hedging in place or it is lapping up the ~$28,000/t
bliss?

[kennas]

It's made about 8 attempts at $7.50 and hasn't held it. Little bit of resistance there! The odds are it'll fail again and slip back to $2.50, unless there is a significant event to push it through. ie, big news, or Nickel surges.

[canaussieuck]

MRE has just hit 2.78 on some serious accumulation. I had just read this thread, then went back to the screen and saw am 8 cent change in less than 5 minutes.

:eek7:

[rederob]

Rob, how do you think the chart is placed technically? As cannuck mentioned in the breakout thread- it's really banging on $2.70 peak tempting a breakout....

Does Minara have any hedging in place or it is lapping up the ~$28,000/t
bliss?
Kipp
The chart is not the bottom line!
MRE is making seriously huge profits right now as they are neither currency or production hedged.
While nickel prices stay over $20k MRE is destined to move to over $3/share and stay there.
Should MRE get closer to nameplate capacity of 40k tonnes pa (instead of presently under 30k tonnes) we would be looking at a share price well over $5.
The simple reason is due to MRE having fixed production costs. It means in theory that it costs as much to produce 30k tonnes as it would to produce 40k tonnes - in other words the extra 10,000 tonnes at $25,000/tonne would add to bottom line profits.

[Realist]

MRE is storming along. Up 10% today!!

I buoght in at $2.40 a few weeks ago and it is $3.00 now. :eek:

I only bought based on the financials, the fundamentals. It was clearly undervalued.

What is going on today? whatever it is it is good! :D

[canaussieuck]

I too bought at 2.41. But i sold after it failed to break out the other day. :banghead:

[Realist]

Bugger Canuck!! :banghead:

It is flying today, anyone know why? :confused:

[canaussieuck]

Having said that and just looking at the chart, you can see that its gapped up today. Gaps always get filled, so it will come back to the 2.80 range again. Amazing thing about gaps, you look at any chart and gaps always get filled, sooner or later. I'm seriously considering a plan to just trade gaps for a while.

[Realist]

Having said that and just looking at the chart, you can see that its gapped up today. Gaps always get filled, so it will come back to the 2.80 range again. Amazing thing about gaps, you look at any chart and gaps always get filled, sooner or later. I'm seriously considering a plan to just trade gaps for a while.

Well you know I think charts are basically astrology, I'd like to know the fundamental reason why it shot up today before commenting.

Why a Resources company in the midst of this boom with so much money and such a low PER is so cheap is beyond me. People are 'guessing' about the future, but quite simply if MRE bosses saw no future in lateritic nickel they could just buy out about 5 Uranium and Gold Juniors outright and have spare cash to boot.

It's next dividends are coming in less than a month as well.

[canaussieuck]

http://www.lme.co.uk/nickel_graphs.asp (http://)

Nickel is way up again. MRE reacts quite well to Nickel pricing. I think someone mentioned earlier, its well positioned for this.

[Realist]

Hmm, Nickle it is up a little, and MRE is down a little to $2.90 now. That gap is filled!!

[canaussieuck]

The price must drop to 2.80, the previous days high. Then the gap is filled. This may not happen for days or weeks even. I'll put in a price alert. I've also posted a new thread on gaps, it will be interesting to see if anyone has had success with them.

[rederob]

Bugger Canuck!! :banghead:

It is flying today, anyone know why? :confused:
Fundamentals alone.
Despite an overnight inflow of 414 tonnes of nickel into Rotterdam, cancellations totalled 918 tonnes: Suggesting demand is continuing to outpace supply - cancelled stock is 60% of total LME.
And supply is robust this week - possibly the highest inflows into LME warehouses this year as backwardations remain in the $1500/tonne range.
With Inco on strike and no talks scheduled, nickel's tightness is set to continue into September.
It is doubtful if the exceptional inflows into LME this week can be maintained.
Furthermore, stainless steel demand has not waned in recent months with some European producers unable to satisfy near term orders: Stainless accounts for some 70% of global nickel demand.

[petee]

the reason for the large jump in share price today is the results of MMI for bardoc nickel joint venture with halcyon will show another murrin murrin style nickel deposit

[eddievanhalen]

............in which case you might quite reasonably expect to have seen more than zero HCY shares traded today. ;)

Ed

[rederob]

............in which case you might quite reasonably expect to have seen more than zero HCY shares traded today. ;)

Ed
Agree Ed.
Petee is speculating here and although he may be right, my view is that it remains the "fundamentals" that will keep MRE trending north.
I am a big fan of unhedged producers, and MRE (as stated earlier) will be reaping massive profits on their current production.
Elsewhere noted, SMY is 60% hedged at $12k/tonne, ie about 40% of present prices received by Minara.
Although I hold both equities in large quantity, I have a partial sell order for my SMY shares and am looking at transferring the profits into MRE should nickel prices hold in coming weeks.

[petee]

hmmm speculating maybe but we will see.. the MMI results will be very favourable and a second large long term nickel mine at bardoc will continue to bring a strong bottom line to Minara not to mention Halcyon which is only exploration status but will move to producer as well...all infrastructure is in place at bardoc to transport ore by rail to murrin murrin plant

[rederob]

hmmm speculating maybe but we will see.. the MMI results will be very favourable and a second large long term nickel mine at bardoc will continue to bring a strong bottom line to Minara not to mention Halcyon which is only exploration status but will move to producer as well...all infrastructure is in place at bardoc to transport ore by rail to murrin murrin plant
petee
I mean "speculating" in the sense that whatever you know has not been made public.
I would love to hear more of what you know or what is rumoured.
Rumours seem to get a good run in a market driven world.

[petee]

petee
I mean "speculating" in the sense that whatever you know has not been made public.
I would love to hear more of what you know or what is rumoured.
Rumours seem to get a good run in a market driven world.
Thats about it Rederob..just what ive said regarding the upcoming results..the rest regarding infrastructure etc is fact..time will tell..keep a careful watch

[rederob]

Thats about it Rederob..just what ive said regarding the upcoming results..the rest regarding infrastructure etc is fact..time will tell..keep a careful watch
Thanks petee
I will, but don't forget to let us know if you hear more first, ok!

[markrmau]

Ahhh, things become a little clearer. MRE's Friday action was probably because of this:

http://www.smh.com.au/news/Business/CVRD-bids-A23b-for-Canadas-Inco/2006/08/12/1154803131034.html

[Realist]

$3.04 now, up 25% in less than a month. :D

[rederob]

$3.04 now, up 25% in less than a month. :D
Let's go for 50% in 2 months!
12.5 cents dividend coming up - record date 8 September.
LME 3 month nickel tracking near $30k/tonne and continuing to rise.
Nickel's backwardation is holding over $4k and very little "new" metal is finding its way into warehouses: This tells us that high prices are here to stay for at least a fortnight.
But I only really came back to say that cobalt is the new black in metals.
Cobalt is up 50% in a month and moving rapidly higher by the week.
It's a thinly traded metal, in incredible demand, and in very short supply.
I anticipate cobalt will add at least $10m extra to MRE's bottom line in 2007 - it's not a lot, but I think it's also a conservative number that puts a few extra cents onto the next dividend.

[Realist]

Let's go for 50% in 2 months!
12.5 cents dividend coming up - record date 8 September.


You are about right.

It is $3.46 now. It was $2.40 6 weeks ago.

It is up 44% and 12.5c dividends are a week away. wow!!

[canaussieuck]

After today, it has produced a textbook Doji, which usually (but not always) results in a reversal of the current trend. So we can look for confirmation of that tomorrow and possibly a buying opportunity prior to the stock moving higher....i would be interested in any other technical perspectives on this....as well of course a comment from Realist.

Cheers,

[Realist]

After today, it has produced a textbook Doji, which usually (but not always) results in a reversal of the current trend. So we can look for confirmation of that tomorrow and possibly a buying opportunity prior to the stock moving higher....i would be interested in any other technical perspectives on this....as well of course a comment from Realist.

Cheers,


Canuck, I bought MRE based on their low PER, the great financial situation, and they are a miner who pays good dividends.

They've more than exceeded my expectations, but quite simply they are still undervalued, and I suspect they will diversify and/or take over other companies.

They are still a BUY in my eyes based on their financial situation and excellent overperforming recent profits. However as they have soared so much so quickly they may fall down again before going up.

We'll wait and see....

[Realist]

$3.72 now, my god it is up over 55% where I bought it.

Dividends to come.

Why is it up so much - nickle price alone? :confused:

[kennas]

$3.72 now, my god it is up over 55% where I bought it.

Dividends to come.

Why is it up so much - nickle price alone? :confused:

Must be tempting to take some profits Realist? Can Nickle stay at all time highs for ever?

[Realist]

Must be tempting to take some profits Realist? Can Nickle stay at all time highs for ever?


True, but you know my philosophy, I'll hold.

A 60% gain now after tax and brokerage is a 29% gain in reality.

In 10 months time (I've owned 2 already) A 60% gain is a 45% gain after tax. And I get dividends over the year.

So if it drops 20% from here to this time next year and I hold I'm about equal to if I sold now. Of course it can go up more, so the benefits of holding are significant I feel.

The financial fundamentals of MRE are still incredibly strong, PE of 10. I have no idea about Nickle prices and don't really care which I know has you mining experts laughing. But I bought MRE cause it has alot of cash, makes huge profits and was significantly undervalued. I didn't really care what industry it was in to be honest. Which is not that silly as they have alot of cash chances are they'll be diversifying soon anyway. They can afford to buy other companies.

[rederob]

$3.72 now, my god it is up over 55% where I bought it.
Dividends to come.
Why is it up so much - nickle price alone? :confused:
Not entirely.
MRE produce cobalt as well: Cobalt is up 30% over its month-ago price and I think it will go from $20 at present to near $30 by year's end based on market tight supply.
On the nickel front, high backwardation is eking out more inventory so stockpiles rose slightly overnight.
I suspect there is not a lot more "loose" nickel around as we have had a month of $4k backwardations.
All this tells us is that the move from excess demand to balance is going to take at least another month. Although any sharp resupply of metal into LME warehouses can spill spot prices from over $30k to near $20k in a matter of days.

[Realist]

Thanks rederob,

You hold MRE, you'll continue to hold I take it?

I will.... :)

[rederob]

Thanks rederob,

You hold MRE, you'll continue to hold I take it?

I will.... :)
I had a sell order in at $3.75 from last week - wound it up to $3.95 after your morning post: I owe you realist!!!
Just wound it up to $4.20 and might have to review that figure early next week at this rate.
Hard to believe this stock closed at $2.96 6 trading days ago.

[Freeballinginawetsuit]

I had a sell order in at $3.75 from last week - wound it up to $3.95 after your morning post: I owe you realist!!!
Just wound it up to $4.20 and might have to review that figure early next week at this rate.
Hard to believe this stock closed at $2.96 6 trading days ago.


Not sure at the moment with MRE, way extended on my chart with MACD well extended and defying all the T/A. Momentum just going to neverland

Seems exactly like ZFX in March, just keeps on going up without taking a hit, leaving you wondering when to sell?.

[rederob]

Not sure at the moment with MRE, way extended on my chart with MACD well extended and defying all the T/A. Momentum just going to neverland

Seems exactly like ZFX in March, just keeps on going up without taking a hit, leaving you wondering when to sell?.
An interesting analogy fbs.
ZFX tacked on another 50% from end March to its May high.
Are you thinking MRE has another 50% ahead of it?
That would put it well over $5, which is not too far fetched if nickel holds up around the $30k mark.

[Freeballinginawetsuit]

An interesting analogy fbs.
ZFX tacked on another 50% from end March to its May high.
Are you thinking MRE has another 50% ahead of it?
That would put it well over $5, which is not too far fetched if nickel holds up around the $30k mark.

I am thinking exactly that as its looking pretty sickly on my charts, way extended. ZFX looked exactly the same in its March/April advance and I held off selling, although I looked at the bugger pretty much everyday.

I'm way ahead on MRE at the moment and trying to hold off on the greed factor. Keep on telling myself "Remember ZFX ". But the question is how many holders of MRE are thinking the same as me, its sure got a lot of TANK room left in its SP.

[rederob]

I am thinking exactly that as its looking pretty sickly on my charts, way extended. ZFX looked exactly the same in its March/April advance and I held off selling, although I looked at the bugger pretty much everyday.

I'm way ahead on MRE at the moment and trying to hold off on the greed factor. Keep on telling myself "Remember ZFX ". But the question is how many holders of MRE are thinking the same as me, its sure got a lot of TANK room left in its SP.
I will review the fundamentals of nickel over the weekend and post back with a view for next week's trading.
Just remember that in the first quarter this year nickel averaged around $6.70/lb; then about $9 in the second quarter; and thus far into this quarter its averaging about $13.
Put into context, we could expect MRE to harvest a profit some 40% greater this quarter than last quarter.

[michael_selway]

An interesting analogy fbs.
ZFX tacked on another 50% from end March to its May high.
Are you thinking MRE has another 50% ahead of it?
That would put it well over $5, which is not too far fetched if nickel holds up around the $30k mark.

$5 possible but thats if Nickel can go to $40k/tonne?

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 46.9 33.2 20.8
DPS 10.0 25.5 18.0 11.4

thx

MS

[rederob]

$5 possible but thats if Nickel can go to $40k/tonne?

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 46.9 33.2 20.8
DPS 10.0 25.5 18.0 11.4

thx

MS
MS
Please use your brain when you post Comsec forecasts, unless you have the sums to back them up.
The 2007 forecast is based on a lower average nickel price than in 2006.
I personally cannot see that happening, can you?
In fact, MRE is likely to earn more in this half than it earned in the entire 2006 financial year, on present trend. Furthermore, if prices were to hold steady for 9 months we would be looking at an eps of about $1.50 or a pe of 3.
I think if nickel sat around $40k for any length of time you would be looking at MRE being closer to $10

[haemitite]

MS
Please use your brain when you post Comsec forecasts, unless you have the sums to back them up.
The 2007 forecast is based on a lower average nickel price than in 2006.
I personally cannot see that happening, can you?
Yes

[markrmau]

I have just read a book called 'Taming the Lion' by Richard Farleigh. The basic premise is that prices can go far further than expected, and that markets actually underreact to publically known information.

Don't think for a minute that the analysts are BETTER than the market at predicting what nickel prices will be next year. Think of the broader picture...

[michael_selway]

MS
Please use your brain when you post Comsec forecasts, unless you have the sums to back them up.
The 2007 forecast is based on a lower average nickel price than in 2006.
I personally cannot see that happening, can you?
Yes

Its a yes for me as well, but might be close. However 2008 will be much lower than 2007 I suspect, and this is more important in terms of valuation of a stock

Its probabilities and the constant "ins", are making feel we are/will be in surplus

http://img58.imageshack.us/img58/6540/lmerv2.jpg

http://www.kitconet.com/charts/metals/base/spot-nickel-5y.gifhttp://www.kitconet.com/charts/metals/base/lme-warehouse-nickel-5y.gif

So in the ST, MRE can spike to $5 (depending on how high Ni prices go from here), but cant see it sustainable for long atm

Btw im not agreeing with the "Comsec Forecasts" necessarily, but rather they seem to share the same view as me for this case, ie nickel's future atm

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 46.9 33.2 20.8
DPS 10.0 25.5 18.0 11.4

thx

MS

[rederob]

The "forecasts" MS quotes are from Comsec.
Nickel is forecast by Comsec to average 761cents/lb this year and 544cents in 2007.
I will email Tobin Gorey at Comsec and let him know that for his forecast to be correct the price of nickel will need to collapse to about 500cents next week and remain at or below that price for the next 4 months.
I anticipate nickel averaging around 1,000cents this year.
Going into 2007 I see the 2006 average price holding into the early part of the year, which means instead of a first quarteraverage price of 670cents as in 2006, we instead would see a figure 50% greater.
General nickel market tightness is likely to ensure that in 2007 average prices will have continued upside surprises until the supply/demand equation favours supply.
The last 4 years have seen average annual nickel prices rise considerably, and the assumption forecasters are making is that prices have peaked. These same forecasters made that assumption early in 2005 and have continued the theme in 2006. While there must be a turnaround at some point, I would argue that it is extremely difficult to turnaround the nickel market unless global economies begin to go down the gurgler in coming months - unlikely but never impossible.
An aspect that forecasters continue to overlook is that nickel demand is predicated on stainless steel production. Right now stainless producers have full order books and cannot meet their customers needs. The production chain is quite long and should comfortably take the tight nickel market into 2007. Again, this suggests nickel prices above 1200cents - and nearer 1400cents - are here to stay.
Finally, there are no new major nickel mines coming on stream in 2007: We need to wait for Goro and Ravensthorpe in 2008.

Back to MRE: At present rates of earnings, I expect that they will achieve in excess of 80cents/share in the present financial year. As MRE's policy is to return 50% to shareholders, a 40cent dividend for the year is likely to see this stock sit comfortably above $4 in 2007 on the most pessimistic of assumptions. Should nickel prices continue to hold near $30k over coming months there is little doubt their earnings will be substantially higher, their dividends increased, and the share price re-rated.

As for the matter of "ins" that MS harps on about, these need to be seen in the context of backwardation. Backwardation is a market mechanism that attracts metal to the spot market by ensuring a higher price is received. MS should, however, take care to post tables that do not shoot his thesis down, as copper, nickel and zinc are all shown to be in the red - meaning that outflows were greater than inflows.
In any event, we should not make too much of daily movements in isolation. We need to concentrate on the underlying trends. In the case of nickel, despite backwardation in excess of $3000/tonne over the preceding month, and as high as $5000/tonne, we still see LME warehouses with less than a day's supply.
Don't expect nickel prices to collapse any time soon unless the numbers shift dramatically overnight.

[porkpie324]

its certainly confusing for the average investor to figure out future earnings of mining cos, i noticed on the latest Mincor res Miitel upgrade that they base earnings on nickel 2008 at us$4.00 per pound, that figure comes from RBC capitol mkts 'nickel market outlook', thats about us$10.00 less than present.
I think that brokers just don't like mining companies, perhaps they (brokers) deem them unsofisticated, brokers would rather you put your hard earned cash into a company that just dreamt up a way for curing cancer using tadpole sperm, or a telco surfing the net using two baked bean tins and a piece of string.
If i had listened to brokers i would not have cashed up my stocks prior to the 1987 crash, would have invested more prior to the 2001 tech crash and would certainly not have taken early retirement and can now concentrate more on the goodlife.porkpie

[johnmwu3]

Remember tomorow Sep.8 is MRE dividend record date.
Anyone know MRE Nickle mine reserve or mine life ?
Cheers,
John3

[rederob]

Remember tomorow Sep.8 is MRE dividend record date.
Anyone know MRE Nickle mine reserve or mine life ?
Cheers,
John3
40 years @ 40,000 tonnes per year

[johnmwu3]

40 years @ 40,000 tonnes per year
Thanks,Rederob!
First I compared MCR and MRE, so in mine reserve MRE is better.Although MCR got some high grade Nickle mine, but only produce concetrates, and got some products hedged, only make part advantage of the raising nickle price.

[johnmwu3]

Citigroup think MRE will be the standout of 2007, which will up 67%( after 39% increase in 2006).
Nickle average price will up 35.7% in 2006 to 970 USc/lb, and up 26% in 2007 to 950 USc/lb.

[michael_selway]

Thanks,Rederob!
First I compared MCR and MRE, so in mine reserve MRE is better.Although MCR got some high grade Nickle mine, but only produce concetrates, and got some products hedged, only make part advantage of the raising nickle price.

MCR has a mine life of 4 yrs i think i heard before

yeah very low, but MRE with 40 yrs is very good

thx

MS

[rederob]

MCR has a mine life of 4 yrs i think i heard before

yeah very low, but MRE with 40 yrs is very good

thx

MS
Mincor has resources of about 76,000 tonnes which mostly will translate to reserves.
This gives a mine life of about 6 years at 13,000 tonnes pa (last year mined 13,000 tonnes, and 10,000 in the year prior).

[alankew]

What are peoples opinions as to a possible slight retracement in current price-missed the rise on this and would like to get on it but not sure if it gone too high too fast

[johnmwu3]

Nickel Rises Most Since December 2004 as Global Supply Dwindles

By Chanyaporn Chanjaroen

Sept. 12 (Bloomberg) -- Nickel prices surged the most since December 2004 as declining inventories renewed speculation that demand for the metal from makers of stainless steel will exceed supplies this year.

Stockpiles tracked by the London Metal Exchange have plunged 80 percent this year to less than two days of global consumption, and prices have more than doubled. Demand will climb about 10 percent this year and 7 percent in 2007, forcing manufacturers to deplete inventories, Citigroup Inc. analysts Alan Heap and Thomas Price said in a report last week.

``The market is genuinely tight,'' said Mo Ahmadzadeh, president of Mitsui Bussan Commodities Ltd. in New York. Prices will keep rising until makers of stainless steel begin to cut production, he said.

Nickel for delivery in three months jumped $1,795, or 6.5 percent, to $29,295 a metric ton on the London Metal Exchange, marking the biggest percentage gain since Dec. 20, 2004. Prices reached $29,950 on Aug. 22, the highest since at least 1987.

Inventories dropped 0.9 percent in the past two days after rising for six sessions. The stockpile decline this year occurred as demand increased from stainless-steel makers in China.

Most buyers today were trading companies, Ahmadzadeh said.

[Realist]

Who is still holding?

I am, and $3.82 today. The PER is still so low, and they have so much cash and are still making so much cash - over $200M per year it could just keep going up as Nickle keeps going up...

Then they'll takeover some other miners with all their cash - reckon.

[rederob]

1st-September-2006, 11:09 AM
Thanks rederob,
You hold MRE, you'll continue to hold I take it?
I will.... :)
I did not sell MRE as it missed my price target from 1 September.
I will "hold" a bit longer as I can see $4.50 being reached in a few months.
Nickel inventories remain very tight and the $30k figure that used to be seen as a bogey, is now just seen as "fair".
Stainless producers have ramped up prices throughout this year, meaning the extra premium on nickel purchases is gradually being accommodated.

[Realist]

$3.93 now, I've made about 70% in 3 months wow. :eek:

The rumour is Glencore a Pommy company who own 40% of MRE are thinking of taking over the rest of MRE - hence the price keeps going up.

MRE is trading at a PER of 12 to FY07 earnings. Which is higher than competitors who are tradign at 10.

Future earnings are predictions and as such are just as likely to be wrong as they are right. MRE has alot of cash, is well run, over most of its problems, Nickle is strong and staying strong, and the current earnings of $200M+ per year is phenomenal. And the current PER is low.

I see no reason to sell yet.

[canaussieuck]

To me, MRE looks to be a very strong uptrend and starting another wave up. I can see you making allot more on this one Realist.

If metals continue strong then it will do well. I would still expect some corrective move in October though.

Cheers,

[michael_selway]

$3.93 now, I've made about 70% in 3 months wow. :eek:

The rumour is Glencore a Pommy company who own 40% of MRE are thinking of taking over the rest of MRE - hence the price keeps going up.

MRE is trading at a PER of 12 to FY07 earnings. Which is higher than competitors who are tradign at 10.

Future earnings are predictions and as such are just as likely to be wrong as they are right. MRE has alot of cash, is well run, over most of its problems, Nickle is strong and staying strong, and the current earnings of $200M+ per year is phenomenal. And the current PER is low.

I see no reason to sell yet.

Well it is the best leveraged Nickel play imo


Price is more than right for Minara

Date: 5/9/2006
Author: Jo Clarke
Source: The Australian Financial Review --- Page: 20

The performance of Australian nickel miner, Minara Resources, in the 2006 first half far exceeded expectations. It reported a net profit for the six months of $A100.7 million. This compares with just $A16.5 million for the same period the previous year. Minara's only asset is the Murrin Murrin nickel laterite project, which has been problematic and remains risky. The sole reason for its stellar result is the rising price of nickel. It reached $US3,000 a tonne in late August. Analysts expect the price to continue to rise unless there is a slowdown in the global economy

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 56.8 39.3 28.4
DPS 10.0 26.3 20.0 12.0

EPS(c) PE Growth
Year Ending 30-12-06 56.8 6.7 343.8%
Year Ending 30-12-07 39.3 9.7 -30.8%

thx

MS

[rederob]

To me, MRE looks to be a very strong uptrend and starting another wave up. I can see you making allot more on this one Realist.

If metals continue strong then it will do well. I would still expect some corrective move in October though.

Cheers,
Profit takers moved in and sold this stock down in recent days.
Get ready to jump back on for next ride north.
Almost hit first line of support at $3.81 but bounced at $3.82 instead.
I have a bid to buy more at $3.50 and do not intend to chase it at a higher price (just yet).
My firm view is that in 2007 MRE will be unlikely to trade below $4 - principally because it will have a dividend that keeps it higher for longer.

[rederob]

MRE announced cash on hand at $177m at end of quarter, and record output from Murrin Murrin.
The next dividend is looking to be much greater than the 12.5cents (total of $58m) paid on 22 Sept to stock holders.

[Realist]

MRE has now more than doubled since I bought it, someone please convince me not to sell, I am getting more and more tempted... :o

[johnmwu3]

China stainless steel production up 40% compared to same time last year, and more project are being in construction.
So Ni will be very tight next year.

[canaussieuck]

MRE has now more than doubled since I bought it, someone please convince me not to sell, I am getting more and more tempted... :o
I still reckon its got more upside yet. Into its third wave up now, may see a pause again soon Realist but if i had it, i'd be tempted to hold onto it at least until you saw the trend reverse.

Good luck.

[rederob]

I did not sell MRE as it missed my price target from 1 September.
I will "hold" a bit longer as I can see $4.50 being reached in a few months.
Nickel inventories remain very tight and the $30k figure that used to be seen as a bogey, is now just seen as "fair".
Stainless producers have ramped up prices throughout this year, meaning the extra premium on nickel purchases is gradually being accommodated.
Looks like I was too conservative again!
$6 now looking increasingly more obvious as the days roll on.
One I will sit back and relax on rather than try and time a sale as who knows where nickel is headed in coming months - new record highs already broken this month.

[Freeballinginawetsuit]

Looks like I was too conservative again!
$6 now looking increasingly more obvious as the days roll on.
One I will sit back and relax on rather than try and time a sale as who knows where nickel is headed in coming months - new record highs already broken this month.

Maybe it could be time to take your profits, seems overpriced at the moment considering its peers.
MRE still has a history of problems with the Murin Murin Plant, top heavy on costs and totally unhedged. Lots of maybe's and its not exactly as if their history wasn't with out hiccups.
Its not a Spec, its a producer,you can't predict the future but MRE has doubled in SP in recent months, thats a great return for a midcap miner!.

[rederob]

Maybe it could be time to take your profits, seems overpriced at the moment considering its peers.
MRE still has a history of problems with the Murin Murin Plant, top heavy on costs and totally unhedged. Lots of maybe's and its not exactly as if their history wasn't with out hiccups.
Its not a Spec, its a producer,you can't predict the future but MRE has doubled in SP in recent months, thats a great return for a midcap miner!.
Profit of around $20,000 per tonne at moment, with annual output over 30,000 (conservatively). And with only 465 shares on issue.
Do the maths - scary eh!
I'll hold, thanks.

[porkpie324]

I closed my MRE CFD pos on friday there up .38c today, and just look at MCR today up 20c thats 13.5%, also closed that CFD pos on friday, still not to bothered both wetre good earners.porkpie

[Realist]

The thing is I am making so much from this I wanna reduce tax by holding it over a year. The next dividends may be very large as well.

I'll hold and forget about it I think, until I've hit the one year mark anyway.

[porkpie324]

Being a new zealand trader we don't have capitol gains tax so that position is not an issue, but I guess you have to try and work if to take a profit or hold and hope that the shares don't drop to far. porkpie

[moses]

so you all want to hold at this price...but would you buy?

[porkpie324]

Thats the question I always ask myself when I'm considering selling or closing a CFD position, thats why I closed my CFD positions on Friday, no I wuold'nt buy at the moment. porkpie

[Freeballinginawetsuit]

The thing is I am making so much from this I wanna reduce tax by holding it over a year. The next dividends may be very large as well.

I'll hold and forget about it I think, until I've hit the one year mark anyway.


Just a thought Realist, but your profits on MRE are only based on their current SP who knows what it will be in the future, seems overweight at the moment though!.
Why not realize your profits on MRE, and put them into a fair valued mid cap 'soon to be' that maybe having a few teething problems, but once overcome might really boom in SP (BDG comes to mind).
A soon to be miner in the 'U' sector that has stable commodity prices for the future and the only new 'U' miner for yonks, PDN.
Or the trusty KZL for its future mine potential on its reserves in Zinc and Copper.
All of these seem like pretty good long termers that will no doubt be paying dividends etc, all the stuff your into!.

I just wouldn't consider MRE a long termer, too many if's/bad plant history not enough positives on the exploration side etc. KZL seems to have all of the aforementioned on the postive side and IMHO Zinc has some upside to come, where as Nickle will probably soften up in the near term.

[Realist]

Say I've made 130% now.

If I sell now after holding less than 1 year at 50% tax I've made only 65%.

If I hold for 1 year I've made 97.5%.

The stock would have to fall 40% frome here for me to lose out. And I will get dividends before the year is up so it'd need to drop nearly 45% , and if I sell now I miss the potential for MRE to go up further.

Has it topped? is it overvalued? I doubt it, and they have so much cash they can takeover other companies if they want.

I see no reason to sell.

[Freeballinginawetsuit]

Say I've made 130% now.

If I sell now after holding less than 1 year at 50% tax I've made only 65%.

If I hold for 1 year I've made 97.5%.

The stock would have to fall 40% frome here for me to lose out. And I will get dividends before the year is up so it'd need to drop nearly 45% , and if I sell now I miss the potential for MRE to go up further.

Has it topped? is it overvalued? I doubt it, and they have so much cash they can takeover other companies if they want.

I see no reason to sell.


No probs, each to their own.

Not sure on your income, employee position etc but if youre fully into the shares maybe you should seek some tax advice as to a financial set up that minimizes your tax exposure on your share transactions. 50% tax is heaps!.

[Realist]

No probs, each to their own.

Not sure on your income, employee position etc but if youre fully into the shares maybe you should seek some tax advice as to a financial set up that minimizes your tax exposure on your share transactions. 50% tax is heaps!.


Agreed. 50% is a killer. :mad:

[tech/a]

If I sell now after holding less than 1 year at 50% tax I've made only 65%.

So you'll have no losses through out the year to offset?
Staregy is buy and hold for 12 mths regardless of intermediatary profit.

Good god


Its the years profit not a single trade.
When I see posts like this I really have my doubts about the majority of claims I see posted.

Its simple business practice.

[Realist]

So you'll have no losses through out the year to offset?


Nope, the only losses I've made this year are JPR $800 and FDL $300. And I still hold them. No losses realised yet - although PMH may get me still.. ;)

The other 28 shares I've bought are all winners. Made some big money on the Nasdaq, And I've made a few thousand in dividends. I need to reduce tax now.


Staregy is buy and hold for 12 mths regardless of intermediatary profit.


Yeah pretty much. I'll hold unless a share becomes clearly overvalued (The only one I've sold this year is AMC for $7.58.


Its the years profit not a single trade.

Not really, I've no losses to offset - I am better holding.


When I see posts like this I really have my doubts about the majority of claims I see posted.

What do you doubt exactly?

And what is wrong with holding MRE for a year to reduce tax?

Others considered selling it a month ago, it has gone up 40% since then.

[tech/a]

Hmm 28 positions.All winners.
All long term holds.
Not long ago I remember you were saving for an opportunity to purchase a house when prices crash.

28 holds at say $8000 each (Just guessing from the amounts you seem to talk about when you do.)Thats $220k. Plus play money you seem to find endlessly---say $50K.

From the way you write and the way you trade I have my doubts.
Anyone who claims no losers and 28 holds would have me doubting them.

Nothing is wrong with holding for years I hold quite a few 12 mths or more.
However not at the cost of profit.
Tax is a cost of doing business and if you do business correctly you can and should reduce your tax.

[Realist]

LOOK EM UP MATE..

AMC (sold last week), BHP, BSL, CAQ, CBA, CBH, CQT, DRT, EVE, FBU, FDL (loser), FGL, FUN, GHG, HCY, IAG, JPR (loser), MRE, MTN, NEL, PMH, PRG, RIN, RIO, USA (lists Wed), WDC, WDCNB. As well as some Nasdaq shares..

Some trading punts were for less than $2000 FDL, JPR, CBH, HCY, EVE.

[Realist]

Not long ago I remember you were saving for an opportunity to purchase a house when prices crash.

The average house price in my suburb is $1.9M.

If I had a $800K deposit (which I don't) it is a drop in the ocean. :(

[tech/a]

Yeh right do you want my list of 28 winners as well!
Both losers on the lesser trade size---strange that.

Buy in a cheaper suburb.
Or is it a matter of keeping up with the Jones's?

What sort of rent do you pay for a $1.9 million house--or is the one your in the worst house in the street?

[Realist]

Yeh right do you want my list of 28 winners as well!
Both losers on the lesser trade size---strange that.

Buy in a cheaper suburb.
Or is it a matter of keeping up with the Jones's?

What sort of rent do you pay for a $1.9 million house--or is the one your in the worst house in the street?

Check all those threads, I posted in virtually all of them well before they went up.

My investments are bigger than my trades, no losers on investments yet.. And usually I get good dividends.

I'm glad you do not believe how well I am doing, makes me feel as if I am outperforming! :D

We can look at these a year later and see how they do...

I live in an apartment worth about $700K. It is nothing to write home about, cheap rent though! Gives me more money to invest..

[Realist]

Buy in a cheaper suburb.
Or is it a matter of keeping up with the Jones's?


Why buy - houses aint going up, it'd be a silly investment. I make far more renting and investing in shares.

I like where I live, why live somewhere I don't like? it is wiser to pay cheap rent in a good suburb at the moment anyway.

[tech/a]

We can look at these a year later and see how they do...

..

OK bet they wont all be above todays close.
Infact I'll bet you dont nett 20%.Before tax on todays prices.

Just a little side bet a carton of your favorite beer.

[michael_selway]

OK bet they wont all be above todays close.
Infact I'll bet you dont nett 20%.Before tax on todays prices.

Just a little side bet a carton of your favorite beer.

MRE a lear later, more likely to be lower than higher than now imo

its just in the ST MRE can get really higher

thx

MS

[Realist]

OK bet they wont all be above todays close.
Infact I'll bet you dont nett 20%.Before tax on todays prices.

Just a little side bet a carton of your favorite beer.

Okay you're on, but lets go for 12% including dividends. (my aim stated earlier this year)

Afterall 20% is a big ask when I've already made good money on some like MRE that if they drop 10% in the next 9 months I'm still up by more than 100% and my tax is reduced. Jsut holding for another 8 months saves me tax.

So the bet is 12% average overall including dividends.

1 case of beer... :) October 16 5pm 2007 is the close date.

[rederob]

MRE a lear later, more likely to be lower than higher than now imo
its just in the ST MRE can get really higher
thx
MS
We will know in a year's time.
Just remember that free cash flow provides great opportunities for MRE to advance its productivity improvement strategies and get close to nameplate capacity of 40,000 tonnes/year.
MRE's HPAL process is relatively fixed cost, so adding another 8,000 tonnes to its production is akin to adding it to its bottom line profit.
Then, if the heap leach process tosses in another 2000 tonnes/year at minimal cost, MRE could become a volume success story as distinct from its present price success.
My view is if prices settle a bit over $20k/tonne in 2007 then a $6 price tag on MRE would be quite reasonable.

[Realist]

MRE hit a shark bar today. Up about 19c at open, then down 18c by lunch.

Interesting, obviously there's concern it is overvalued now.

[johnmwu3]

Nickel Gains to Highest Since 1987 as Demand Beats Supplies

By Chanyaporn Chanjaroen

Oct. 20 (Bloomberg) -- Nickel surged, reaching the highest price since at least 1987, as supplies lag behind demand from makers of stainless steel, the biggest users of the metal.

The price of nickel, used as alloy in stainless steel production, has more than doubled this year as inventories monitored by the London Metal Exchange plunged 86 percent. Mine output fell short of demand by 70,000 metric tons in the first eight months of 2006, the World Bureau of Metal Statistics said.

``When things become short, and there's not much visible inventory, people have to have them,'' Sean Corrigan, chief investment strategist at London- and Lausanne-based Diapason Commodities Management, said today in an interview from London. ``There's not enough of the stockpiles to see people through.''

Nickel for delivery in three months soared $525, or 1.7 percent, to $32,200 a ton at 4:28 p.m. on the London Metal Exchange, the highest in at least 19 years. Prices are up 4.7 percent since Oct. 13, the fifth straight weekly gain.

The Lisbon-based International Nickel Study Group has forecast a 10 percent jump in demand this year to 1.37 million metric tons. Stockpiles in warehouses monitored by the LME dropped 96 tons, or 2 percent, to 4,836 tons, the exchange said today in a daily report. Inventories are equal to less than two days of global consumption.

The shortfall of metal sent nickel for immediate delivery to $33,800 a ton as of yesterday, or $2,125 above the benchmark three-month contract. The premium for spot supplies over later deliveries is known as backwardation. In a market with ample supplies, prices of longer-dated contracts are higher than nearby ones to reflect storage and interest costs.

Producers of the metal have benefited from the price rally. Inco Ltd., the world's second-largest nickel producer, said today third-quarter profit soared to a record $701 million as prices jumped 85 percent during the period. Russia's OAO GMK Norilsk Nickel is the world's largest producer by 2005 output.

Nickel output at Inco increased 13 percent during the period, after the company began operations at its Voisey's Bay mine in Labrador and increased production at its Manitoba plant, the company said today.

[Brasidas]

Maybe nickel stocks ahve topped out for the time being? MRE gets a mention in this week's Minesite weekly roundup which is here

That Was The Week That Was … In Australia

By Our Man In Oz

Minews. Good morning Australia, another week, another record?

Oz. It certainly was for some stocks, especially those selling zinc and nickel to the steel industry. You probably saw the same reports we did down this way, that the world has almost run out of zinc, and the nickel price is showing no sign of retreating from its astonishingly high levels. The end result, naturally, is that zinc stocks such as Zinifex (ZFX), Perilya (PEM), CBH (CBH), Kagara (KZL) and Terramin (TZN) have moved into the stratosphere, joining the nickel brigade who where already up there.

Minews. A few price examples please?

Oz. Zinifex hit a 12-month high of A$15.05 during Friday trade, before settling back to close the week at A$14.65, a gain of A$1.14 (8.4 per cent), Perilya was up A70 cents (20.8 per cent) to A$4.05, down a fraction on its 12-month high of A$4.10 reached on Thursday and Friday. Kagara also set a 12-month high on Friday of A$7.34, before easing back to A$7.21, still up A82 cents (12.8 per cent). CBH, which received a severe setback at this time last year with a stope collapse in its Endeavour mine, was up A5.5 cents (8.8 per cent) to A67.5 cents, also a modest retreat from its high of A73.5 cents set on Thursday. Terramin, which is developing a small zinc mine close to Adelaide in South Australia, was up A14 cents (8.9 per cent) to A$1.70, down from a Thursday high of A$1.75.

Minews. And the nickel sector was strong again?

Oz. Yes, but not to the same extent as the zincs. Jubilee (JBM), which held its annual meeting during the week and said takeovers were off its agenda, was up a modest A20 cents (1.6 per cent) to A$12.60, down on its cracking start to the week when the stock hit a 12-month high of A$12.98. Western Areas (WSA) put on A25 cents (7.4 per cent) to close the week at A$3.64, also down from its 12-month high of A$3.79 set on Tuesday, and Minara (MRE) was up A11 cents (2.2 per cent) to A$5.20, which was some distance behind its 12-month high of A$5.55 set last week. .. more ..


http://www.minesite.com/storyFull5.php?storySeq=3894

[Sweet Synergy]

Looks like it's breaking resistance / consolidation today

[Fab]

I am looking at the following MRE warrant MREIOK issued by Citibank. Looks very interesting to play the continuing upward trend of this stock. I am interested to hear from people who have been following this stock for a while to see what their thoughts are on MRE and its potential .

Thanks :)

[kennas]

Quite possibly the best looking chart on the ASX. Cleared a little resistance at $5.50. Just what will stop this? Can't see anything. (don't hold - unfortunately :( )

[Fab]

Thanks Kennas,

I might get this warrant then. Do you know much about what is coming up with regards to this company. Annoucement, results ...

[kennas]

Thanks Kennas,

I might get this warrant then. Do you know much about what is coming up with regards to this company. Annoucement, results ...

Fab, I haven't invested in it because I thought it was running too hard and I'd get caught without a chair. That was when it was under $4.00....

Average broker recommendations with date of reco and 12 mth price target:

Aspect Huntley 17-Oct-06 Downgrade to Sell from Reduce
SB Citigroup 10-Oct-06 Upgrade to Buy, High Risk from Hold, Speculative Risk $4.82 (- 12.8%)
Merrill Lynch 10-Oct-06 Buy, High Risk $5.15 (- 6.9%)
Macquarie 24-Apr-06 Underperform $1.50 (- 72.9%)

I haven't checked its fundamentals, sorry. Not sure what sort of value it's representing.

[Fab]

Thanks Kennas for the feedback. I am still tempted to invest in this warrant as it expires in 11/07 and it could be a good mid term type of investment in a resource stock that like ZFX keeps going up up and up.
WOuld you know where to find this warrant general information from Citibank website (I mean delta and so on info).

Cheers

[kennas]

Thanks Kennas for the feedback. I am still tempted to invest in this warrant as it expires in 11/07 and it could be a good mid term type of investment in a resource stock that like ZFX keeps going up up and up.
WOuld you know where to find this warrant general information from Citibank website (I mean delta and so on info).

Cheers

No, I don't do Warrants. It's on the list of things to study.

[Freeballinginawetsuit]

MRE is outperforming the market as usual, 15 percent up in a couple of days, Fundamentals should see this profit take action over, and it pushing new highs again IMHO :D .

[Freeballinginawetsuit]

A nice strong run through $6 with volume today for MRE :D. All time highs

Some consolidation at these levels and a run to the mid $7's wouldn't be out of the question before Xmas.

MRE's profits will be outstanding for the last half of 06, full plant output and sustained record nickle prices (a great combination) for an unhedged large producer.

Nearly 40 percent up since November's pullback, a nice bounce indeed!. :D

[michael_selway]

A nice strong run through $6 with volume today for MRE :D. All time highs

Some consolidation at these levels and a run to the mid $7's wouldn't be out of the question before Xmas.

MRE's profits will be outstanding for the last half of 06, full plant output and sustained record nickle prices (a great combination) for an unhedged large producer.

Nearly 40 percent up since November's pullback, a nice bounce indeed!. :D

A monster MRE is!

EPS(c) PE Growth
Year Ending 30-12-06 66.6 8.9 420.3%
Year Ending 30-12-07 55.8 10.7 -16.2%

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2009
EPS 12.8 66.6 55.8 41.2
DPS 10.0 29.8 26.0 16.6

thx

MS

[traderandy]

MRE opened quite strongly (about 2-3%) but is now being sold hard - 2.8% down on such a positive morning for the rest of the ASX.

Any clues on what is going on?

[Freeballinginawetsuit]

As simple as profit takers, their are certainly plenty of them!.

[rederob]

MRE announced cash on hand at $177m at end of quarter, and record output from Murrin Murrin.
The next dividend is looking to be much greater than the 12.5cents (total of $58m) paid on 22 Sept to stock holders.
Has about $310m cash on hand at end December, so the next dividend should be a good deal more than 12.5 cents.
Furthermore, nickel prices appear to be stuck over $30/k/tonne which might just double MRE's cash on hand by end of financial year.
MRE has about 465m shares on issue, so the eps multiple for this stock might get lower as the year draws on.
I think it's a bit undervalued, but clearly has never been a market darling.

[wintermute]

I've had a personal target of $7.30 on MRE for quite a while... could have made a killing if I'd sold at the high points and bought back in on the drops, but I'm content that I bought in at $2.55 and sold half at $5.25 :)

I posted this back on 13/10/2006 on sharecafe, note one mistake edited (changed quarter to month), which explains my target of $7.30... Now I haven't re-visited this calculation in light of the latest qurterly report, but considering they paid out over $50 million in dividends in Sep, I think I may be in the ballpark ;)

I've had another look at the profit that MRE is currently making and have another forecast of $7.30 per share by maybe April or May next year... This of course depends completely on the Nickel price staying around the $30,000 US / tonne, and that MRE's costs remain constant, and they don't spend any large chunks of cash on upgrades/ unplanned maintenance, etc...

Based on some quick calcs from the 3rd quarter report it looks like MRE is making about $41 Million a month at the moment in profit. if you multiply that by 6 (for the remaining six months of the calendar year from June) you get a whopping $246 million.... if you add the $100 million from the first half you get $346 million full year profit. divide that by the number of shares on issue and you get an eps of 73cps based on a low industry standard P/E of 10 that equates to $7.30 per share.

As always I urge you to do your own calculations, as I have made mistakes in the past! and also remind that the murrin murrin plant has had breakdowns in the past, and is not immune from future problems. But I think that this should show that the sp climb isn't over yet.


My only regret is that I didn't buy more!!! :)

Tony.

link to original post (http://www.sharecafe.com.au/board_postview.asp?a=PVS&postID=449178&boardID=2223&sym=MRE)

[Reefer]

I guess you guys are keeping an eye on reports from the other nickel producers but a look at the Lionore announcements (LIM) gives a pretty good idea where Minara might be heading. In LIM's ann of their Q3 2006 results, production was similar to Q3 2005 but Net Earnings Q3 2006 were $148m compared with $7.9M (Q3 2005), and EPS up from 4 cents in 2005 to a massive 68c for the same quarter 2006. May be some containment of costs involved but the average price of nickel in 2005 was $6.68lb and for Q3 2006 was $13.24 lb. So you would expect the half yearly's for MRE to be showing some pretty good figures as well. MRE don't tend to release as much good information into the market as LIM which may be why the shares are a bit volatile. I agree there is plenty of upside in the SP yet, IMO.

[PeterPan]

Hi guys,
I’m new of the forum and of share investing/trading. However I’m quite passionate about it and have a couple of questions for you on Minara/Sally.

I’m using Andrew West as broker and their website is quite full of info and financial details. I have some shares in Minara but I’m interested in Sally as well.

Here’s my questions:

1) My broker rates Minara as Higher Risk whereas Sally as Average Risk. However if I look at their risk indicators Minara looks pretty solid (current ratio 2.88, quick ratio 1.96, debt/equity ratio 7%). Sally, on the other hand has current ratio 0.64, quick ratio 0.55, debt/equity ratio 98.3% !! How come that Minara is considered riskier than Sally????

2) Valuation of Minara and Sally. According to my broker website Minara should be at around $9 and Sally at around $10. However, Wintermute says that Minara’s value should be around $7.30 and Feballer says that Sally at $3 is already pretty valued!!!

Could you please help me understand what calculation / reasoning you guys adopt to value the price of these two shares?? :confused:

Many thanks for your help.
PeterPan

[rederob]

Hi guys,
I’m new of the forum and of share investing/trading. However I’m quite passionate about it and have a couple of questions for you on Minara/Sally.

I’m using Andrew West as broker and their website is quite full of info and financial details. I have some shares in Minara but I’m interested in Sally as well.

Here’s my questions:

1) My broker rates Minara as Higher Risk whereas Sally as Average Risk. However if I look at their risk indicators Minara looks pretty solid (current ratio 2.88, quick ratio 1.96, debt/equity ratio 7%). Sally, on the other hand has current ratio 0.64, quick ratio 0.55, debt/equity ratio 98.3% !! How come that Minara is considered riskier than Sally????

2) Valuation of Minara and Sally. According to my broker website Minara should be at around $9 and Sally at around $10. However, Wintermute says that Minara’s value should be around $7.30 and Feballer says that Sally at $3 is already pretty valued!!!

Could you please help me understand what calculation / reasoning you guys adopt to value the price of these two shares?? :confused:

Many thanks for your help.
PeterPan
When in doubt, remove it by buying both.
Or sell both and gamble your savings on the dogs.

Sally has gained a good run due to excellent exploration results. It will be years before these results are translated into production and real $$s

Minara is totally unhedged and knocking out about 600tonnes a week (of which 60% is theirs), worth almost $15m per week (less cost of production).

SMY will deliver about 50% of their production in 2006/7 into hedges averaging under US$10,000/tonne: SMY will produce less than half the amount of nickel that MRE "claims" this year (40% of MRE total output [of 600tonnes/week] is "owned" by Glencore).

My personal view is that SMY will get severely punished by investors when they put out their 6 month and annual reports as their "profits" will not reflect the prevailing high spot price, and be further impacted by very high treatment and refining costs. I cannot argue with the price action of SMY, as it is spectacular. But on fundamental grounds I will not look at it until its hedge book is cleared and it gets a better offtake deal with Jinchuan.

[wintermute]

Hi PeterPan, first I'm no expert at valuing companies :) , second, my valuation is (I think) very conservative (and simplistic) as that figure is based on a nickel price of US $30,000/tonne, and what I predict their profit is going to be... no ROE, futre prospects, risk weightings, just simple p/e.... Now part of the simplistic nature of that is that it was only based on 6 months worth of results (which are due soon) at the high nickel prices... the first half year had much lower profits than what I expect for the second half... and a P/e of 10 (when the sector generally trades at a p/e of maybe 14 or 16)

The fact that the nickel price has shot up even more means that potentially the eps will be higher (and certainly for the second half of 06/07 financial year it should).

MRE will be earning a lot more than that for the 07 calendar year if nickel prices remain high, so based on the next 12 months profit if we assume nickel will stay at over US $30,000/tonne MRE will have even bigger profits.... thinking about it I should have bought more when they dropped back to around $5.50 doh.. ;)

One thing that to me makes MRE a bit easier to put a value on is the fact that they have a 30 year mine life.... so earnings will be coming for a long time.. a lot of mines have a life of 5 years or shorter, making reliance on (successful) exploration much more important.

MRE has a bad track record for reliability, It looks to me that they have finally overcome that, but a lot of brokers still factor it in to the risk side of things (huntly's when I bought in back in August had them rated as sub investment grade).

I don't know much about SMY, I only just had a brief look at them this morning, I'm looking to get some more nickel exposure before 1/2 yearly / final results come out. The quick look I did have didn't leave me particularly enthused (I really should take notes because I don't remember why now), I'm also looking at MCR (which I don't hold... main downside with them (from memory) seems to be short mine life) and CSM (who I hold and would like some more of, but nickel is only a small part of their overall revenue at present).

Finally I no longer trust brokers recommendations, half the time I think I'd be better doing the opposite of what they say!! When I bought MRE most brokers had a sell or hold (polite way of saying sell) recco on it. it was $2.55 at the time... I did my own profit forecast and thought Hmmmm they can reach $5 before the end of the year so I bought them, I did the second valuation once they went past my $5 in record time!! I worked it out purely based on how much they money they had to be making based on information supplied in quarterly reports, wasn't that hard :) the brokers had eps estimates a fraction of what I came up with!! in the end MRE announced a 500% increase in revenue, and well here we are today :) The thing is, the highest price they received for Nickel in that first half year was US $20,000 / tone, and there was only one month at that price!! that's why my forecast for the full year profit is higher :) note it was rough calcs so it could be out either way (I could be too high, or too low).

Tony.

[rederob]

September-2006, 01:00 AM
haemitite
Re: MRE - Minara Resources

--------------------------------------------------------------------------


Quote:
Originally Posted by rederob
MS
Please use your brain when you post Comsec forecasts, unless you have the sums to back them up.
The 2007 forecast is based on a lower average nickel price than in 2006.
I personally cannot see that happening, can you?

Yes

Just wondering about that view now?

[markrmau]

The metals market is a perfect example of what Richard Farleigh talks about in "Taming the Lion".

Basically RF said that the market was actually pretty inefficient, and that the trend will be continually ignored with market participants always thinking that the price had run too far already.

He says in the end, the peak price paid will surprise all those involved.

So I still maintain, especially for copper right now....people should think about the underlying macroeconomic factors that are present in the world now...

(ie. go long if I am being too obtuse)

[michael_selway]

Just wondering about that view now?

Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 71.4 63.9 60.3
DPS 10.0 37.5 38.0 31.0

EPS(c) PE Growth
Year Ending 30-06-07 33.4 9.1 175.6%
Year Ending 30-06-08 63.9 4.8 91.3%

thx

MS

[rederob]

MS
The Comsec forecasts that you originally posted (below) for this year - based on Comsec - has now been revised upwards by almost 100%, based on your above post.
Moreover, their 2008 forecast has been revised upwards by over 200%.
Earnings and Dividends Forecast (cents per share)
2005 2006 2007 2008
EPS 12.8 46.9 33.2 20.8
DPS 10.0 25.5 18.0 11.4
I caution people to be very wary of forecasts - mine included - where the track record is consistently poor.
The question going begging is "why" they continue to err so badly.
The answer on the lips of many bulls is that mainstream economists persistently place the US at the centre of the universe and neglect the role of emerging economies; not just China.
The "stronger for longer" bull camp has a simple view that we cannot curtail the desire of non-Westernised nations to aspire to our living style.
And with a continuing transfer of wealth from the west to "exporting" (eg China) and service provider (eg India) nations, the trend has a long way to run.

[PeterPan]

Thanks a lot Wintermute and all you guys. I've been away for work and could not post.
I see your point Wintermute (and I do hope you're right!!). However, I'm not quite sure I have understood the p/e thing. You say that MRE's eps should be around 73c (I agree) and that considering a p/e of 10 this transalates to a price of $7.30. But the p/e is a consequence of the current price, not the other way around. I mean, there are some companies that trade at very low p/e because the market believes they're no good. Why should the market start paying MRE on a p/e of 10 all of the sudden (when they are considering it only to be worth a 8.8 p/e share)? I hope it's clear (sorry guys but English is unfortunately not my first language!).
Thanks again for any light Wintermute and you guys might want to shed on this.
Cheers
PeterPan

[wintermute]

Hi PeterPan, I can't remember if at the time I originally did the calculations whether MRE was trading with a p/e of 10 or not... I don't think I just pulled the figure out of the air, but I might have! It could have been high 9's... this is where I should write things down!!! Commsec is currently showing them as having a p/e of 8.86 which I assume is based on their forecasted 71.1c eps....

Also according to commsec their eps for 2005 was 12.8c but at the end of 2005 they were trading at about $1.70 so their p/e then would have been about 13 and that was when they were still having a lot of problems...

Tony.

[PeterPan]

Hi guys
Here again to bother you with my questions :)
Question 1:
You said that Sally’s book is hedged and Minara’s book is not, and I understand that it’s better not being hedged. But, what does it mean that the book (or the production) is hedged?

Question 2:
I’ve always thought that demand drives price (high demand-high price). However, yesterday looking at Minara there were buyers willing to buy 300,000 shares and sellers willing to sell 600,000 and still Minara gained more than 1%!!!!! How does it work?? Shouldn’t have lost???

Thanks a lot for sharing your thoughts with me.

Cheers
Andrea

[wintermute]

basically if production is hedged the company has agreed to sell a certain percentage of their production at not higher (or lower) than a certain price... this gives them some confidence that they have a minimum price they will receive should the price of their commodity drop... when prices are going up, this is bad because even though the current price might be say 35,000 / tonne, they may have agreed to sell it for a maximum of 17,000 / tonne... of course companies at the moment would probably be wise to be hedging some of their production at say 32,000 / tonne because they are making huge profits at this level, and even though the price may keep going up, it could also drop down.

So hedging is basically just a way to ensure some stability in a companies earnings (it can be a lot more complex than what I have said).

on point 2, yes supply and demand does generally drive the price, but perceived value does as well, there is also a lot of game playing done with market depths... someone might put a large bid in on the sell side to give the impression that there is a lot of supply, but should that bid look like getting filled then they may pull it (the might also have a bid on the buy side)... It's a bit like an auction, people don't always let on what they are thinking... often there will be a couple of bidders who are bringing the price up, and out of the blue a new bidder will appear when the others look like they have exhausted their range.. people don't always show they want to buy or sell, they can be just sitting their ready to place a bid when the price reaches the level they want :)

Tony.

[wintermute]

I sold today at 6.27. Not because I think there is anything wrong with MRE, but to lock in my profit (140%) because I'm concerned about a market correction in general, which I think we will see in the next couple of weeks, I could of course be wrong, and will miss out on a fairly substantial dividend I suspect. But I decided to follow my gut feeling, because in the past when I haven't I have regretted it...

Will sit out for a few weeks and see how things go :)

Tony.

[Halba]

wintermute! MRE is the cheapest nickel producer on the mkt, especially considerings its low $1000/t EV/T.

[wintermute]

ahhh well... I bought them at 2.55 so I have had a good run :) I'll certainly be buying back in when I'm feeling comfortable to do so again... I just hope they don't take off too much after the yearly report is released.... As I said nothing to do with MRE as a stock, just my personal feelings about where the Market is headed in the short term.... (which could be completely wrong).

Tony.

[Freeballinginawetsuit]

Should have been announced yesterday, MRE end of year results till 31/12, not to mention the first 2 months of 07 at record Nickle prices. Nice Divy announced:D


Minara Resources
12 months ended 31 December




2006 /2005 Revenue:

($m) 751.9 361.4


Pre-tax profit

$402.1 67.4

Net profit after tax
$338.7 43.0

EPS (c) 72.83 9.25

Dividend (c) 57.5 10.0

[Freeballinginawetsuit]

Nice open:D

[chops_a_must]

Screw ZFX. Strip the dividend from this one.

[Freeballinginawetsuit]

It is probably a better divvy than ZFX per SP price, for sure. Yet we all new it was coming a while back and their SP was stagnant and yesterday it was dumped hard.

I sold out of it weeks back at 6.50 out of sheer frustration, yesterdays action was a bonus.

Holding on for the divvy in the current market may see its worth stripped from you......seen that one happen before.

Todays trade is over for me, happy with the return in a day....right price I'd look at them again:D .

[Duckman#72]

Holding on for the divvy in the current market may see its worth stripped from you......seen that one happen before.

Yes it is a danger. But if your buying in the name of a superfund - the rate of return and franking credits are very tempting. It is around $6.70 this morning and going ex div (45c - 100% franking) tomorrow.

"Will it get savaged tomorrow?" is the big question.

Duckman

[Duckman#72]

So far so good. SP has settled at around $6.10 which is theoretically almost the exact "book" value after going ex div. What will nickel do from here?

Looking at the broker recommendations - they are all over the place. A few broking houses have them rated as a Strong Buy while a couple have them rated as a Strong Sell with the remainder spread in between. Someone's wrong!!!

Duckman

[Freeballinginawetsuit]

End of Today Ducy isn't it, holding at close>get divvy

[Freeballinginawetsuit]

[QUOTE=Duckman#72]So far so good. SP has settled at around $6.10 which is theoretically almost the exact



LOL, still no reply Duck. Well I took up a new entry in MRE today.....:)



The fact of the matter is if you enter MRE today.....you get the Dividend on a T3 basis.

Seems like youre logic was followed by the flock today........

[Out Too Soon]

End of Today Ducy isn't it, holding at close>get divvy

I dont know abt that freeball, ASX sight calls it XD already. IF it's not I've got abt 20 minutes to get in. :eek7:

PS What's a T3 basis? :confused:

[Freeballinginawetsuit]

I've already explained it OTS, those buying days back paid to much for the dividend IMO, price action today confirms this:D .

But dont take my word for it........ give the share registry or Minara a quick buzz.

[Out Too Soon]

Gotcha, thanks Freeball :) I don't normally chase divs but it's easy to get caught up in others enthusiasm. ;)

[Duckman#72]

End of Today Ducy isn't it, holding at close>get divvy
Hi Freeball

I rang Minara - ex div today. Yesterday was the day

Duckman

[Freeballinginawetsuit]

Hi Ducks,

Great that you called Minara, what did you say to the lady from customer relations.........?.

"Hi my market depth shows XD but can I still get your dividends by record date on today's punt". I'm an experienced ASF punter so I'm just checking up on some info!.


Nice close for MRE with most of the volume above $6.15.:)

[Duckman#72]

Hi Ducks,

Great that you called Minara, what did you say to the lady from customer relations.........?.
:)

Please tell me you're joking FreeBall!!!! :D

That's excellent that you picked up the dividends!!

In the future I will remember that you are able to buy shares that have gone ex div on the market as if they are cum div. Might get you to get them for me.

Duckman

[Freeballinginawetsuit]

Ducks.....nothing wrong with a bit off piss taking occasionaly:D .....you seem to have missed the humor from the get go!.....

Back to MRE, pricey IMO short or long ATM.......but yep I will be getting some dividends.

This ones a bit like ZFX and others..... a big picture for many is coming to fruition, lost in the noise of the moment:2twocents.

Cheers

[Kauri]

Minara shrugs off talk of next Xstrata target


28th March 2007, 9:15 WST





Minara Resources boss Peter Johnston played down talk yesterday that the WA nickel miner was next on Xstrata’s hitlist after its $5 billion friendly bid for LionOre Mining, as investors bet on a new wave of takeovers.


Minara led nickel stocks higher in the wake of Xstrata’s bid for the Canada-based miner, surging 36¢ to a record close of $7.33, which valued the former Anaconda Nickel at just over $3.4 billion.

Fellow WA producer Jubilee Mines also retouched its record high of $17.70 before closing 98¢ up at $17.32, while Kambalda miners Sally Malay Mining, Independence Group and Mincor Resources all posted solid gains.

LionOre’s Australian shares also rocketed $2.46 to $20.50 as investors speculated that Xstrata may still be trumped by a bigger rival such as BHP Billiton or Brazil’s CVRD. In Canada, LionOre last traded at $C19.28, a four per cent premium to Xstrata’s $C18.50 offer.

Analysts have long painted Minara as a logical target for Xstrata given the company is already 51 per centowned by Glencore International, the secretive Swiss trading house which floated Xstrata in 2002 and retains almost 40 per cent.

Glencore also owns a direct 40 per cent stake in Minara’s big Murrin Murrin nickel mine near Leonora, and markets all production from the mine.

Speaking from New Caledonia — where senior executives from most of the world’s nickel companies have gathered for the industry’s biggest annual conference — Mr Johnston refused to speculate on Glencore’s plans for its stake in Minara.

He also said there had been no recent contact between Minara and Xstrata. “None whatsoever — no contact, no talking,” Mr Johnston said.

“Obviously we have ongoing dialogue with Glencore … but I can’t comment on (Glencore’s intentions). That’s for others to speculate on.”

Mr Johnston said Glencore had supported Murrin Murrin for nine tough years, demonstrating the strength of the relationship between the two companies.

Now, after years of problems and debilitating losses, the mine is reaping windfall returns on the back of near record nickel prices above $US45,000 a tonne.

Minara booked a staggering profit of $388 million in calendar 2006 even though Murrin Murrin is still well below its nameplate capacity of 40,000 tonnes a year.

Mr Johnston said he expected the good times to continue.

Demand was showing no sign of slowing, while supplies would remain tight at least until 2009 when both the big Goro mine in New Caledonia and BHP’s Ravensthorpe mine should be onstream.

But even then, Goro would take at least three years to hit full steam.

“Chinese demand has not slowed … and there’s a definite supply side issue,” he said.

Hartleys’ analyst Andrew Rowell said he did not believe Xstrata’s bid for LionOre signalled that a fresh round of consolidation was imminent.

But investors were starting to realise “just how strong the (nickel) price is”.

“I think people are generally waking up to the fact that there’s going to be a lot of cash flow generated, especially in this quarter,” he said.

Mr Rowell said he would like to see more consolidation, but believed bidders would be reluctant to move while share prices were so high.
JOHN PHACEAS

[Freeballinginawetsuit]

Rederob,

I quite like quotes 40/41 on this thread :D. Wether youve simply held MRE as an investment.............or traded it on the pulbacks, its a cash cow!.
Bring on the first halfs dividend after 4 months of record Nickle prices.

Excuse me for my excitment but its past 8 bucks today:D ..

[michael_selway]

Rederob,

I quite like quotes 40/41 on this thread :D. Wether youve simply held MRE as an investment.............or traded it on the pulbacks, its a cash cow!.
Bring on the first halfs dividend after 4 months of record Nickle prices.

Excuse me for my excitment but its past 8 bucks today:D ..

Carzy stuff MRE, and nice divi!

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 72.5 74.3 69.6 53.8
DPS 57.5 45.0 40.0 24.6

thx

MS

[rederob]

Carzy stuff MRE, and nice divi!

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 72.5 74.3 69.6 53.8
DPS 57.5 45.0 40.0 24.6

thx

MS

MS
If you go back to post 49 you will see I forecast within 5 cents of the 45cent div, and you will see I also have regularly cautioned your trotting out Comsec as some form of corroboration of your views.
Both you and haematite did not believe nickel would sustain an average price that was higher in 2007 than 2006.
I understand that we can't always be right, but my analysis is based not just on what's happening now, but also on a forward view of events that affect the metals market.
Note that the BIG PICTURE for metals remains very much intact.
Although nickel remains at a ridiculously high price, its market tightness means that manipulators are playing an extremely dangerous game wherein a plus20% price decline is possible any time soon.
On the positive side of the equation, even serious and expert metals analysts are now reckoning that nickel regaining $50k/tonne is a reasonable probability: So price weakness will be heavily bought into.

In relation to the above Comsec dividend forecast, notice that they have not factored in another dividend for 2007: Are the stupid or simply forgetful?
Speaking of which, MRE will come close to achieving Comsec's annual earnings forecast within the first half of 2007, and won't need the rest of the year to make up the difference.
Again, I caution you not to place in faith in the Comsec data you habitually trot out.

[rederob]

.... MRE will come close to achieving Comsec's annual earnings forecast within the first half of 2007, and won't need the rest of the year to make up the difference.

With nickel habitually around $50k and showing no real weakness, Comsec's forecast is already dead in the water.
I anticipate MRE's next dividend will be over 80cents.
Should $50k nickel hold out this quarter, I anticipate MRE will be trading over $10 in the second half.
Downside risk was recently an overbought nickel market.
However, with an RSI of about 60points I expect nickel prices will favour upside in near term rather than downside.
This is also consistent with warehouse inventory tightness and minimal stock inflows over a significant period.

[Freeballinginawetsuit]

BGI have now taken up a substantial holding. MRE's issued capital is now over 90 percent held by substantial holders :eek:.

[Freeballinginawetsuit]

MRE's running on wide spreads, not much resistance at all................rare for a semi blue chip. Bugger all sellers left :D

Low volume run though, the sellers will come (just holding back ATM,)!

[rocka1]

MRE Its getting hammered today down 7% percent might think about buying , would like members thoughts on stock price cheers rocka

[Ken]

MRE.

good value again?

how sustainable is this dividend?

IS THIS ANOTHER ZFX on a different time line?

[rederob]

MRE.

good value again?

how sustainable is this dividend?

IS THIS ANOTHER ZFX on a different time line?
Ken
When I posted in April MRE was holding its price on fundamental grounds.
Since then the tide has well and truly turned.
I expect it will continue to ebb for many weeks to come - maybe months.
Although MRE is presently making strong profits on good margins, I believe it will suffer further price weakness as nickel inventories continue to build.
Perhaps when it announces it next results its price will stabilise.
I am a long term holder, and believe another price cycle is ahead, perhaps nearer year-end.
But for now the carnival is over.

[Trader Paul]

:)

Hi folks,

MRE ..... should also be BOOMING over the next week or so,
from 05-12102007 and especially on 09102007 ... but, next
negative cycle is due on 08112007 ... :)

happy days

paul

:)

=====

[Miner]

Dear Paul

Would you please put more details behind your brief analysis on MInara.
They will have a major shutdown which means no nickel for three months from the plant.
How your historical analysis will adjust with this phenomenon?

Regards

[rederob]

Dear Paul

Would you please put more details behind your brief analysis on MInara.
They will have a major shutdown which means no nickel for three months from the plant.
How your historical analysis will adjust with this phenomenon?

Regards
Miner
It's not 3 months:

CEO Peter Johnston
The objectives of the shutdown are three-fold. Firstly, it is to complete our normal
statutory requirements such as the inspection of pressure vessels and the
replacement of catalyst in the acid plant. The second is to repair and replace
items, particularly in the acid plant and the H2S plant, and thirdly, to increase
capacity in the acid plant.
Most importantly, in the acid plant the operation of the superheater has been our
most serious ongoing maintenance issue. The superheater is the last of the major
design legacy issues and has caused a large amount of downtime, particularly over
the last two and a half years. Acid availability has been the major cause for plant
down time over this period. During the shut we will replace it at an approximate
capital cost of $15 million. When the replacement superheater is operational, the
plant will be unconstrained for acid production for the first time.
The shut down commences in October and will finish in mid-November. There
are several parts to the shut. The first part commences on 1 October and covers
the H2S plant and the replacement of the H2S reactors. To mitigate the downtime
caused by the H2S reactor replacement, we have developed a backup system using
2
sodium hydrosulphide and that will enable us to continue running the rest of the
plant while the H2S plant work is completed.
The shut of the entire plant commences on approximately 21 October and will
finish on approximately 18 November. We have adopted a different operating
philosophy during this shut by focussing the major work predominantly in the
utilities area, thereby enabling large sections of the plant to continue normal
operations for substantial periods during the shut.
Once the plant is up and running after the shut, we expect it to operate at around
3,000 tonnes of nickel metal per month for the following six months. That will
enable the plant to achieve a stable production profile from which we can build on.
And this addition should satisfy the stupid 100 character rule that Joe insists on, regardless of content.

[Out Too Soon]

Miner
It's not 3 months:

And this addition should satisfy the stupid 100 character rule that Joe insists on, regardless of content.

Thanks Paul, that's much more informative, Joes rules make us come clean on our methods of analysis, your initial post could have been based on anything. :) (Astrology?) ;)
One thing that makes me hold onto my MRE holding is the dividends, unusual for a miner, does anyone know the expected mine life for MRE?

[michael_selway]

Miner
It's not 3 months:

And this addition should satisfy the stupid 100 character rule that Joe insists on, regardless of content.

Heres where comsec forecasts come in handy :)

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 72.5 73.2 62.8 60.5
DPS 57.5 42.0 34.9 23.6

thx

MS

[Miner]

Dear Rederob

Sorry I did not follow MRE thread and noticed you responded on 1 Oct with adetailed note. Thanks a lot for the update and apology for not acknowledging any earlier.
Any plant having a shut is going to affect the profit line.
I understand from company's communication that during this time they have engaged their best manager of maintenance to look after the shut and hired a new manager to look after day to day maintenance. Which demonstrates their seriousness to make the shut successful.
Probably making the long strategies more successful MRE is having an ambitious expansion plan. Peter Johnson ex WMC has turned around the operation and if every thing goes well then the expansion is going to make the profit line much higher. Another thing is here that the current GM Operations is to look after teh expansion projects as well. Everything is fine strategically but please do not ignore the weakness that with two new senior managers for the operating plant there will be many recreation of wheels- HIGh risk on short term.

Regards

[sydney_trader]

I've made a little research: since 13th of September the directors of MRE has bought the company's shares exceeding 50 million dollars...

[nikkothescorpio]

I think if you check again you will find that its not actually the directors buying - but rather that Glencore Intl AG is buying and the directors are ALSO directors of Glencore - hence they have to issue an indirect interest disclosure.

Glencore own about 52% of MRE.

I own MRE myself.

[wombo]

News just in. The shutdown has been going very well ahead of schedule. Also the shutdown manager has been promoted to General Manager of the Mine.

[chops_a_must]

MRE appears to be looking quite good at this moment. Quite possibly a strong break out after long consolidation, with nice tightening. A nice breakout target as well.

[kerosam]

saw the triangle bought in on tuesday... then came the two bearish days... looks like it might be a false breakout :(.... sigh....

[McNovice]

Hi All,

I have some MRE shares which I am slightly in front on at the Mo. However as I am a complete Novice I wondered if anyone can give me their views on a couple of matters

- I notice that 3 directors in the past 2 weeks have purchased a large amount of shares. What does this mean in the short term? and how long are we talking?
- Do we think they will go near their $9 high anytime soon?

I have bought some NAB & WBC shares also at low prices and my theory (and I could be totally off) is that MRE have gone up despite the Market being down, when the market goes up the banks will go up and MRE will go even higher?

Your views would be appreciated as I am starting to house hunt and not sure wether to stick and hold off purchasing or sell.

Cheers

McNovice

[nick2fish]

MRE is a solid play in these dour times, due to it being oversold due to the plant shutdown and 100mil spent on modification. Share price recovery ongoing but in these times all time highs are a pipe dream. Banks... well if you say you have physic abililties...who knows when this ones gonna bottom out. This economic downturn could be still talked about in a hundred years and the only thing I be doing with banks at the moment is...:) deposit:)

[Miner]

It is interesting to see MRE share values

It dipped from $5.36 on 26 May to $4.76 on 30 May about 11.3% @ in 4 days.

Earnings lowered 1% for FY 08e and 4% for FY 09e - which is not so severe considering dollar exchange rate and nickel price in world market.

Normally you would expect the directors know their business better and show the strength of their investment

Between 11 March to 12 April 08 two non executive directors have invested more than $51 millions to buy MRE between $5.87 to $5.96. Were they nut to see their investment to go down more than 20% in one month or does MRE down turn giving some opportunities ? Please see the attachment.

Did I see or read some thing wrong,

What is written in the wall considering JBM went so well and MRE just completed $100 M expansion ?

Any thoughts on nickel and MRE researchers ?

[urgalzmine]

It is interesting to see MRE share values

It dipped from $5.36 on 26 May to $4.76 on 30 May about 11.3% @ in 4 days.

Earnings lowered 1% for FY 08e and 4% for FY 09e - which is not so severe considering dollar exchange rate and nickel price in world market.

Normally you would expect the directors know their business better and show the strength of their investment

Between 11 March to 12 April 08 two non executive directors have invested more than $51 millions to buy MRE between $5.87 to $5.96. Were they nut to see their investment to go down more than 20% in one month or does MRE down turn giving some opportunities ? Please see the attachment.

Did I see or read some thing wrong,

What is written in the wall considering JBM went so well and MRE just completed $100 M expansion ?

Any thoughts on nickel and MRE researchers ?

Well Miner,

If I am not mistaken MRE is the 2nd largest Nickel capacity to produce 40k tonnes per year ( Xstrata 50k tonnes with several mines compares to MRe with only one mine)


If you read Smart Investor the march 2008 edition there is an interview with Peter Jonston he advised " if Nickel price stays range between $25k and $35k per tonne over the next few years, you can make very solid returns"

They also have revamped their refinery and have a successful heal leach plant to treat low Grade Nickel, will reduce the cost unit price.

So if you believe and you believe in the big boys who have the interest in this stock:
Barclays Group 7.43%
JP Morgan 7.69%

and also what wise owl is saying in todays edition:

The wise word

Late in the week we witnessed some minor, yet notable wobbles in commodity prices, which had thus far been stand out performers throughout 2008. Commodities are renowned for their price volatility, and intraweek movements are not normally worthy of closer inspection, however some interesting themes were behind this week’s activity.

Base metals and oil were the affected markets, where prices pulled back in response to some minor grumblings from the US Dollar. We have mentioned many a time that weakness in the US Dollar was promoting higher commodity prices. With these goods priced in US Dollars, they need to rise as the greenback declines in order retain their ‘real value’ and purchasing power.

Therefore we may expect any strength in the US Dollar to have the opposite impact on commodity prices, assuming constant supply and demand. Short term confidence in the greenback was boosted by an unexpected upward revision to US GDP figures during the week. For the first quarter of 2008, US GDP growth is now estimated to have been 0.9%, up from 0.6%. Our views on the figures remain unchanged from when they were initially released – although this rate of growth is nothing spectacular in itself, it is quite solid in light of the dour economic context which the US is currently viewed.

Despite the sub prime crisis, the ensuing credit crunch, an equity market correction, falling house prices, rising inflation and unemployment – the US economy has still managed to expand over the last two quarters. A growing number of optimists are now asking whether the US is running out of time to have a recession?

How does this affect the US Dollar?

Stronger than expected growth may prompt the Federal Reserve to increase interest rates to control inflation. As we have seen with our own currency, rising interest rates can stoke currency appreciation from yield hungry investors. Whether these short term rumblings exert a prolonged impact remains to be seen, as the US Dollar has been in a firm downward trend since the start of this decade, as measured by the US Dollar Index.

However the prospect of a Dollar rally, regardless of its odds, has prompted us to take a close look at some key commodities to consider which prices could be at greatest risk in the near term. While a comprehensive base metals review is more suited for a lengthier forum such as our Pearl report, we have enough space here to consider the recent action in nickel. After a bubble in nickel prices burst mid way through last year, the price of the metal embarked on an encouraging consolidation pattern above $US25,000/t. However in recent trading the price has broken below short term support levels formed during this consolidation. The metal's long term uptrend remains intact, and we suspect that rising inventories, a supply indictor, are partly to blame for this bout of short term weakness. After building throughout the second half of last year, LME nickel inventories have now reached their highest levels since 1999! However at current levels around $22,000/t, nickel prices remain around double their 1999 levels.

In the context of the commodities bull market, this recent inventory build could represent another wave in what has been a cyclical pattern of rises and falls over recent years. Hence the increased supply and inherent price weakness could just be a short term phenomena in an ongoing bull market. The recent spate of corporate takeovers in the sector, and a strong push by the majors to increase their exposure to the metal is a testament to its longer term prospects, which are closely linked to steel production. But it is important to consider all possibilities, and we will be monitoring the nickel market with a very keen eye.

[rederob]

I bought 3k MRE today.
I had a conditional order from last week and frankly did not expect a fall greater than 10% to be hit within a day.
I will bid again at $2.80 which is where there is very good long term support.
I held MRE for many years and picked up every dividend they have ever paid until selling the stock last year.
It could be a while before MRE is over $6 again, but the company has been able to manage the production woes of Murrin Murrin to eke out over 30k tonnes a year through HPAL. And with the leaching process ramping up over the next few years MRE will remain a very low cash cost nickel company: It has no hedging, no debt, good cash reserves and a handy exploration regime.
This will be another 5 year hold - maybe more.....

[So_Cynical]

Surly theres room for some consolidation in the Aussie Nickel industry
MRE, MCR and IGO all cashed up..falling SP's and good production
rates and reserves.

surely theres 1 to many.:dunno:

[McNovice]

In reference to Miners post. I too have been looking closely at the directors purchasing a hell of a lot of shares over the previous couple of months.

Being a complete Novice- I took this as they may know something we don't or simply have a strong belief in their company.

I have tried to get some advice off a friend in reference to the directors purchasing shares in their own company with a view to making a load of money. What is the story here? He mentioned there would be a minimum time period that a director could purchase shares in their own company if there was a potential change to the company about to occur.

Can someone explain in laymans terms this for me please?

I had bought some at $7 previously, but then bought some more at $3.9 and $4.5 to bring the average price down.

Someone please advise

[rx1]

Anyone know why the SP is being hammered?

also:

CGM: Capital Raising to Accelerate Project Development

what relation does CGM have with MRE?

Since the start of June the SP is down by around 40%

Any insights and comments would be good.

Thanks

[gfresh]

You must have missed the whole WA gas explosion that has crippled some parts of the WA mining industry, and that has been all over the news. Minara relies on the power that has been lost, and as a result production is expected to be down 8% on the year. Could be months before full supplies are restored.

This should fill you in: http://www.theaustralian.news.com.au/story/0,25197,23850377-601,00.html

[Miner]

You must have missed the whole WA gas explosion that has crippled some parts of the WA mining industry, and that has been all over the news. Minara relies on the power that has been lost, and as a result production is expected to be down 8% on the year. Could be months before full supplies are restored.

This should fill you in: http://www.theaustralian.news.com.au/story/0,25197,23850377-601,00.html

To add MRE bought gas at a very high price. High cost of capital project recently finished will give bearing on bottom line. So as a cumulative effect of very high gas price, lower rate of production, depreciation cost to already lagging plant made profitability index much lower. Never mind one director bought MRE at early $5 about couple of weeks back (before the gas explosion) and think of his investment being so close to those who know all as well.:confused:

The technical strength and fundamentals are good with MRE and this is a temporary phase. It is a bUY by Bell any way.

I took an opportunity to buy MRE today at $2.88 . Hopefully first time lucky me :)

[So_Cynical]

I took an opportunity to buy MRE today at $2.88 . Hopefully first time lucky me :)
Well done...MRE just have to be good buying at under 2.90 IMO, hopefully i can get in
at around the same level later this week....hate it when stocks i want get to my buy
zone and im just not ready.:mad:

Just so many positives for MRE.

[urgalzmine]

To add MRE bought gas at a very high price. High cost of capital project recently finished will give bearing on bottom line. So as a cumulative effect of very high gas price, lower rate of production, depreciation cost to already lagging plant made profitability index much lower. Never mind one director bought MRE at early $5 about couple of weeks back (before the gas explosion) and think of his investment being so close to those who know all as well.:confused:

The technical strength and fundamentals are good with MRE and this is a temporary phase. It is a bUY by Bell any way.

I took an opportunity to buy MRE today at $2.88 . Hopefully first time lucky me :)

I tend to agree with u, i mean BHP closing their nickel mine to focus on maintenance and also to increase capacity and MRE being the 2nd biggest nickel producer in OZ just behind xtrata.

Risks i suppose is lower nickel prices, only having one mine and this WA power shortage...hmm maybe i am thinking to have 2nd thoughts...

[Chief Wigam]

Miner you really picked the bottom.;)
Good on you.

I bought in a tad too early at 3.50 but about to break even now.

Looks like the an uptrend has commenced after a few reversal patterns, need confirmation though.

I actually I hold an earlier smaller parcel i got at 5.88, so overall down a bit.

The divi's at this level are very attractive though at around 10%.

[Miner]

Miner you really picked the bottom.;)
Good on you.

I bought in a tad too early at 3.50 but about to break even now.

Looks like the an uptrend has commenced after a few reversal patterns, need confirmation though.

I actually I hold an earlier smaller parcel i got at 5.88, so overall down a bit.

The divi's at this level are very attractive though at around 10%.


Thanks Chief W, first time lucky I was:)
I am the same person who bought GCR at 4.8 cents and ANZ at $25 and still holding them :banghead:

I honestly believe MRE will rise to its good level
Only recently the directors bought them at $5.75 before gas breakdown

Regards

[So_Cynical]

MRE closed a little weak yesterday, Nickel price down a little tonight and the dow looking weak
and euro markets hit down around 2%...ill try and get into MRE today at under miners buy in.

see how i go? :casanova:

[roland]

MRE got stock pick of the week by "The Inside Trader":


Each week we profile a stock that we believe as a great chance to increase in the medium term (3 - 6mths).

These stocks are chosen by using a mix or our own reseach tools including Directors activity, the Nielsen Supply/Demand Indicator and broker consensus data.

These picks are designed as a starting point for you to investigate further if you wish. Make sure you come back each week to see what we have found.



Symbol / Company
MRE / MINARA RESOURCES LIMITED
Date Picked
24-06-2008
Price When Picked
$3.520
Company Overview
We picked Minara recently and it has seen a sharp sell of due mainly to concerns about its gas supply to continue normal operations following the recent gas crisis in WA.

Directors have continued buying just recently showing a great sign of confidence. It is also currently paying an 11.3% dividend and has a low PE ratio of 6. Worth a look if you want a solid company that appears to be oversold. Keep an eye on the nickel price and the gas concerns.


Must admit though, Comsec don't have it too highly rated, but the dividend return is looking very nice if it is held. Currently at around 10% fully franked.

I don't have any yet, but will see how it goes on Monday

[roland]

I'm not sure if you guys had seen this, but I thought I would post her up - just in case... (posted 12/6/2008)


BHP Billiton has closed a nickel refinery in Western Australia for about four months while it rebuilds a smelter furnace, cutting sales by about 28,000 tonnes and sending the price of the metal soaring.

BHP said today it had to bring forward a planned rebuilding of the furnace at its Kalgoorlie nickel smelter by nearly a year because it had become unsafe to run.

The closure would halt production at its Kwinana refinery and cut global supply by almost 2%.

It estimated the shutdown of Kwinana would cut nickel sales by 25,000 tonnes in its financial year to June 2009, and by 3000 tonnes for the current year to end-June. Total sales in the year to June 2007 were about 101,000 tonnes.

Its shares fell 3.8%, or $1.64, to close at $41.80, while nickel prices jumped $US625, or 2.7%, to a high of $US23,825 a tonne.


http://business.theage.com.au/bhp-shuts-nickel-plant-price-soars-20080612-2pbo.html


Now, I am getting anxious about having missed the bottom

[So_Cynical]

Now, I am getting anxious about having missed the bottom

Yep me 2...maybe Monday will be our last chance.

I keep hoping it will go under 3.00 again...im too cheap sometimes.:rolleyes:

[roland]

adding to my previous post, here is a chart of the directors buying activity. Seems that they were certainly buying in at around the $6 mark. Shows confidence even at that SP level.

[roland]

I've held off buying MRE - just as well as it's dropped a bit this morning.

I guess there are still some worries:

- nickel prices decliningh
- gas supplies still an issue
- SP was in decline already, prior to the gas disruption
- single mine risks

Still, looking for a bounce would be nice, but where to find an entry point ?

[rx1]

Quite a fair drop this morning... i thought they've secured gas and production volume will not be affected...??? down like 10%... does anyone one know any reason, other than outlined by roland previously?

thanks

[So_Cynical]

Closed at $2.51 down 15.8% for the day.

I got in very late in the day @ $2.53 so happy to beat miners entry of a few weeks ago. :)



I took an opportunity to buy MRE today at $2.88 . Hopefully first time lucky me :)

MRE just cant fall much further....with the last dividend at 25 cents its a 10% return
at this price, assuming the dividend holds. :dunno:

[Miner]

Closed at $2.51 down 15.8% for the day.

I got in very late in the day @ $2.53 so happy to beat miners entry of a few weeks ago. :)



MRE just cant fall much further....with the last dividend at 25 cents its a 10% return
at this price, assuming the dividend holds. :dunno:


Yes So Cynical you have beaten me and a healthy competition is good.

To be honest when I saw the price today and put a buy at $2.5 too ambitiously which did not happen. I really thought over you at that time to buy this stock at bargain and getting your mail

I was correct in my hunch and see your joyful smile:)

I am sure market will up and MRE has gone its bottommost point today


Be a winner and keep smiling

[reece55]

Closed at $2.51 down 15.8% for the day.

I got in very late in the day @ $2.53 so happy to beat miners entry of a few weeks ago. :)



MRE just cant fall much further....with the last dividend at 25 cents its a 10% return
at this price, assuming the dividend holds. :dunno:

Famous last words So_Cynical........

Brand new low today again, it's been a ride since the highs of $9.00.

But I don't think the divy will be maintained @ 25 cents with the decline in the price of nickel.....

Best of luck with the purchase..........

Cheers
Reece

[So_Cynical]

^^^^

Time will tell.....its a punt on the Nickel price for sure, im assuming the
market is over doing it, factoring in the downside.

Time will tell....im not in a hurry.:)

[Miner]

lOOKS LIKE Bell Pottter guys are reading our thread[/B]:)

Today (I did not read earlier) they have recommended MRE as a buy.

So Cynical - your turn to make money now !!!:D


Following is extract from Bell Potter Research within copy right allowance


M ajor downgrades across the board�� Gas and sulphur drive up costs

A combination of the recent WA gas crisis and rampant sulphur price inflation has resulted in significant cost pressure on MRE’s Murrin Murrin operation.

At current nickel prices, cash generation has almost stalled to the stage where additional bank funding may be required to finance the potential heap leach expansion.

�� Production downgraded

Production forecasts have been downgraded to 31kt, at the bottom end of the recent company guidance range of 31 – 35kt. Based on the lower production levels cash costs for CY08e are forecast to be approximately US$7.75/lb.

�� Additional downside risks from commodity prices

Despite savage downgrades, further downside risk is possible from weakening
commodity prices. Spot Ni is now around the US$9.50/lb level versus our H2
forecast price of US$14/lb and our CY09 forecast price of US$15/lb.

Subsequently, our Buy rating is a low conviction call.�� Earnings, NPV and Target Price slashed, CY08 dividend disappears

Earnings from CY08 through to CY10 have been downgraded by 54%, 24% and 31% respectively. Our NPV has been lowered 33% to approximately $4.00/share and the target price downgraded to $3.70, based on a PE multiple of 7x CY09 EPS of 53¢. Our previously forecast dividend of 29¢ has been eliminated.

[boombubble]

The main reason it seems that MRE is getting thumped is because of Sulphur.
They import 450,000 tons at $100 a ton and this can go to $600 a ton.

In an article in the following link they menion spot cargo prices at $700 a ton!
http://royaldutchshellplc.com/2008/05/27/sulphur-price-soars-on-fertiliser-demand/

MRE say they buy sulphur in long term contracts but at what price and how long do the contracts last for? Because with fertilizer shortage and new mines like BHP's online and others coming online i can't see the sulphur price dropping for a while , like one year or more perhaps.

Hard to know the impact without understanding MRE's sulphur buy price but surely it will have a dramatic effect on cost and potentially yield.

On top of that you have Nickel price declining still. It doesn't seem to have based yet. Zinc has had more time to drop and consolidate. I guess with Sulphur being factored into Nickel, the price cant keep too low for too long. The positive of all this i guess.

any other thoughts on this ?

[renim]

does ravensthorpe now swallow up all the local sulphur?
i guess that would hurt minara if so.
this stock hurt and i don't see much recovery coming.

[roland]

today's response to the rumours of refinancing was worded in a manner that didn't instill a lot of confidence in my view.

they hastily rejected talk of refinancing but left open the issues of possible money tightness.

I am still on the sidelines and wanted to get in, but it's all still looking a little negative to me.

[Garpal Gumnut]

^^^^

Time will tell.....its a punt on the Nickel price for sure, im assuming the
market is over doing it, factoring in the downside.

Time will tell....im not in a hurry.:)

MRE have been on my watch list recently as a play on the low nickel price. This is the first time I've had a close look at their chart.

Its not a pretty sight.

The weekly is in a hell of a downtrend and has broken through the previous resistance at 2.75 back in mid 2006. I would have thought that if it were to have gone back up this would have been a support level.

On the daily its trending sideways just below this level (2.75)

Its still way below the 21 day MA in red.

Perhaps a break north of the downtrend line and the 21 dma on higher volume might be an entry point.

If it continued south an exit could be either at the level of the lows of this past week (2.41) or the old support level from 2006 of 1.60 depending on whether one is a short or long term trader.

gg

[Paladin]

Hey all. Complete newbie here - and glad to have found these forums!

I was quite happy buying in at MRE at 3.20 a few weeks ago. Who'da thunk it would have tanked almost 30% since then. Now I have to make the call about whether to try and buy more now to dollar cost average, or just hold. I'm also getting the strong feeling from their recent announcement that their financials must be tight - having virtually admitted that they're looking into bank finance. This was a spec buy at 3.20 as far as I was concerned, and we're talking low quantities, but I'm pretty much starting out and it still hurt! I'm trying to value invest medium-term, learning as I go, and I do see value here in the 5 year term. Happy to be talked out of my stupidity, though! So, to DCE or to hold? Should I wait to see a northward wander, as Carpal suggests (but I'm not a day trader, and given the volatility here am worried a northward spike might be rapid and I might miss it - still if I do, I guess I've only lost opportunity costs)? Is it rude to just wander in here and ask random questions? If the latter - mea culpa.

I dunno. My thinking was that this was a good way of exposure to nickel, and Aspect Huntley still has their underlying value at $4.85. It seemed like a good balance sheet, and although a higher cost producer, the debt-free status was appealing. Maybe I should be playing it both ways and buying something sulphur related?

EDIT: Roland, maybe I'm pesimistic, but I'm pretty much reading "investigating standby banking facilities" as "investigating finance" - 'cause who knows how long the prevailing market conditions will continue? Maybe I'm wrong on that, though.

[So_Cynical]

Hey Paladin

I was a little stunned at the banking facilities ann the other day, and have to say im nowhere near as upbeat as i was....maybe all this negativity is getting to me :rolleyes: anyway its fair to say u payed a bit much now...with hindsight.

But only time will tell if your buy in price was good value....big picture.

In general no one on this forum can give specific advice....just there opinion.:)

[Paladin]

Hey Paladin

I was a little stunned at the banking facilities ann the other day, and have to say im nowhere near as upbeat as i was....maybe all this negativity is getting to me :rolleyes: anyway its fair to say u payed a bit much now...with hindsight.

But only time will tell if your buy in price was good value....big picture.

In general no one on this forum can give specific advice....just there opinion.:)

Ha! Well, it's all good. Chalking it up to experience and big picture is definately where I'm at. My gut tells me this is still a good company with good management going through an appalling time (another one - how unlucky can one company be? And does anyone have details about what their business insurance application over the gas pipe shutdown is all about - I'm betting on it not really affecting the balance sheet) which is long term exactly the kind of stock I'm after for a spec buy. It does seem like they've finally got the mine design issues largely resolved. It does seem like they're well positioned, esp with their cobalt stream and being debt free, long term (albeit less well positioned than a lower cost producer, and so much hangs on where sulphur is going and if the current Nickel glut resolves and if China wants to keep making stainless steel etc).

One thing I'm already learning about myself as an investor is how disciplined I'm going to have to be in this market about firmly sticking to stop loss positions. That said, have decided to forget about DCE this stock at the moment, hold, ride the bear and have my learning cap on. On the upside - thank Jahweh I didn't buy six months ago, eh? And if nothing else, googling the code led me to these forums, which I feel is already paying good dividends ;)

[Paladin]

MRE have taken a hit today - to a low (thusfar) of 1.970. Ouch. Has there been some press I've missed?

[oldblue]

MRE have taken a hit today - to a low (thusfar) of 1.970. Ouch. Has there been some press I've missed?

I don't think you've missed anything. MRE has a few hits against it at the moment apart from the generally precarious state of the market; lower production due to the gas problem, the Price of Nickel, a couple of broker downgrades, question mark over financing, just to name a few.
I like to think that I'm a value investor too but one of the lessons I've learnt the hard way is not to buy a share in a downtrend, however good you think the "value" is. We're not all Benjamin Graham/Warren Buffets so it's more difficult for us ( or at least, me ) to gauge that all important " margin of safety" with accuracy. So much better to let someone else buy at the bottom and wait until an uptrend is established.
So I like MRE but won't be buying it just yet.

;)

[Paladin]

I don't think you've missed anything. MRE has a few hits against it at the moment apart from the generally precarious state of the market; lower production due to the gas problem, the Price of Nickel, a couple of broker downgrades, question mark over financing, just to name a few.
I like to think that I'm a value investor too but one of the lessons I've learnt the hard way is not to buy a share in a downtrend, however good you think the "value" is. We're not all Benjamin Graham/Warren Buffets so it's more difficult for us ( or at least, me ) to gauge that all important " margin of safety" with accuracy. So much better to let someone else buy at the bottom and wait until an uptrend is established.
So I like MRE but won't be buying it just yet.

;)

Thanks Oldblue. Very sound advice. Gotta say, I'm having heaps of fun trying to get my head around this stuff. I've actually just sold out of MRE, and will keep it on a watchlist to perhaps buy back into when things smooth out. Might be heading to its old support of $1.60 ish? Fortunately I'm playing with pennies at the moment, and on a deal where I have free brokerage for about another month, so am happy to take these little hits. I'm actually in the green for the most part.

[oldblue]

Thanks Oldblue. Very sound advice. Gotta say, I'm having heaps of fun trying to get my head around this stuff. I've actually just sold out of MRE, and will keep it on a watchlist to perhaps buy back into when things smooth out. Might be heading to its old support of $1.60 ish? Fortunately I'm playing with pennies at the moment, and on a deal where I have free brokerage for about another month, so am happy to take these little hits. I'm actually in the green for the most part.

Good luck!
But take care not to treat the market like a poker machine. Especially a big, bad bear market such as at present.

;)

[Caliente]

DO NOT TOUCH MINARA RESOURCES RIGHT NOW.

Minara is into Lateralite - some of the most expensive s**** to pull out of the ground and are only just back online with some extremely expensive gas. I don't even know if Minara is actually making any money atm?!

As tempting as it is, stay out for now.

[GREENS]

DO NOT TOUCH MINARA RESOURCES RIGHT NOW.

Minara is into Lateralite - some of the most expensive s**** to pull out of the ground and are only just back online with some extremely expensive gas. I don't even know if Minara is actually making any money atm?!

As tempting as it is, stay out for now.

Have to agree with you there. High cost miners = High risk! It is as simple as that.




I like to think that I'm a value investor too but one of the lessons I've learnt the hard way is not to buy a share in a downtrend, however good you think the "value" is. We're not all Benjamin Graham/Warren Buffets so it's more difficult for us ( or at least, me ) to gauge that all important " margin of safety" with accuracy. So much better to let someone else buy at the bottom and wait until an uptrend is established.
So I like MRE but won't be buying it just yet.

;)


Old Blue, I don’t think Buffet or Graham would go near the high costs producers when there are some great low cost nickel sulphide miners out there, however many of them are trading with a premium in them at the moment. I was listening to a presentation by WSA and they were saying that at prices <$10/lb, laterite ore becomes increasingly uneconomical. However if you’re a long term bull on nickel and see sustainable prices in the future considerably above current levels then MRE could present some value.

[Miner]

DO NOT TOUCH MINARA RESOURCES RIGHT NOW.

Minara is into Lateralite - some of the most expensive s**** to pull out of the ground and are only just back online with some extremely expensive gas. I don't even know if Minara is actually making any money atm?!

As tempting as it is, stay out for now.


Very interesting post

MRE is not the only company using laterite and if that is the consideration to stay out then I do not know

Yes, high gas price current level and pernenial maintenanec issues to increase availability has been an issue with MRE

However that is a temporary issue gving us opportunities

General trend is bad and that is why even BHP FMG took a down turn. Iron ore and nickel are closely related with steel demand and price. So again the down turn of MRE is an opportunity IMO and a temporary phase

DYOR but I will be reluctant to make a judgeement to call it STAY OUT. The directors have invested millions recently and I hope they are not just dumb people to do so

Cheers

[Miner]

I believe MRE has bottomed now .

Why : Look at Barclay's investment recently on average price of $3.2 or so
At least they are supposed to know more with research : Not universal true considering ANZ and NAB slump. Still considering on face value

I think Monday market will bounce back

Let us wait and see

[salpal]

Nickel has fallen again over night so I don't think there will too much change in the price for Minara shares for a while - Mincor also had a slump yesteday.

[Miner]

I believe MRE has bottomed now .

Why : Look at Barclay's investment recently on average price of $3.2 or so
At least they are supposed to know more with research : Not universal true considering ANZ and NAB slump. Still considering on face value

I think Monday market will bounce back

Let us wait and see

How wrong I was looking at MRE crash today at 10% and there are more sellers at teh end of day to sell at a lower price than the buyers are prepared to pay. Must be some bad news coming soon:banghead:

[tulasi74]

I chose today of all days to start buying MRE. Oh boy! Bought at the open and kept buying up thinking they were a strong buy. Sold some at a loss at the end. Average cost still about 1.90 so hoping it will bounce back up soon.

[JTLP]

MRE fall = Nickel got smashed to lowest prices in a long time on Friday night.

Seems the old nickel can't take a trick at the moment...hence MRE's considerable downtrend.

[oldblue]

I chose today of all days to start buying MRE. Oh boy! Bought at the open and kept buying up thinking they were a strong buy. Sold some at a loss at the end. Average cost still about 1.90 so hoping it will bounce back up soon.

MRE has been in a consistent downtrend since early May. Definitely not a Buy yet in my book, however attractive the company may appear to be.

:cool:

[McNovice]

Well I am still a novice, but since my first post on here a few months ago have been doing a lot of reading and research, especially into MRE as I bought a few at some high prices.

Best thing I have learnt and it has been enforced in this postings is DON'T buy on the downward spiral just thinking these prices can't get any lower. I thought that when I bought at $3.50 and $4.00. Call me a sucker but I do want to get some more of this share as I do think mid next year it may push the 5-6 figure. As mentioned Sulphur prices which they use to mine the Nickel is about 8 times the price it was last year. They expect these prices to drop next year and by December the Gas issues will have sorted them selves out.

I am still a complete Novice, but as said will wait for it to rise as I would prefer to but 5% higher than the bottom than 50% higher than the bottom when hoping it will stabilise.

Have also been using SMA charting on Yahoo interactive to give an indication when to get in.

1 thing I am looking for guys- Can anyone recommend good software for tracking your shares? I have just entered the amounts on an EXCEL sheet, but I'm not the best with EXCEL, so it's very basic.

As Paladin said something like- I am very happy to have found this forum, I have been given some very good tips and advice off folk here.

My portfolio is still very down since the Gas explosion, but I am confident it will come good in just over 6 months.

Call me McNovicehopeful

[So_Cynical]

How wrong I was looking at MRE crash today at 10% and there are more sellers at teh end of day to sell at a lower price than the buyers are prepared to pay. Must be some bad news coming soon:banghead:

Ok so i wont even look at where MRE ended today.

Of all the stocks i was watching MRE is the 1 i brought and its the only one to fall.:rolleyes:

[roland]

mmm, I am really having trouble here why anyone would consider buying into MRE - just look at the chart.....

Personally, I think, that unless your are knife catching, then MRE's trend line should tell all.

Why must we try and get the absolute bottom when the bottom is so uncertain?

[subaru69]

mmm, I am really having trouble here why anyone would consider buying into MRE - just look at the chart.....

Personally, I think, that unless your are knife catching, then MRE's trend line should tell all.

Why must we try and get the absolute bottom when the bottom is so uncertain?

I've watched the price dropping too, so I thought I should look up the fundamentals. :confused:

Nickel price has halved this year but has a P/E of ~4 and dividend of ~10% and compared to peers doing OK; so seems like IF it can find a bottom then MIGHT be good. :sly:

http://www.investsmart.com.au/company_profile/summary/default.asp?SecurityID=MRE&ExchangeID=ASX

Peer Comparison
P/E (x) EPS Change (%) Dividend Yield (%)
Company Code Last Price Mkt Cap 06A 07F 06A 07F 06A 07F
BHP Billiton Limited BHP $36.92 $208,007M 12.2361 7.7258 4.8539 58.3796 2.2075 3.4921
Rio Tinto RIO $113.80 $146,317M 10.8894 8.9751 54.9274 21.3286 2.2988 2.7832
Fortescue Metals FMG $8.10 $23,653M -43.8174 11.3606 n/a n/a 0.3086 2.6543
OZ Minerals Limited OZL $1.97 $6,524M 11.7224 6.1763 -12.4897 89.7977 4.0609 4.0609
Minara Resources MRE $1.93 $957M 4.6299 4.3064 -33.9245 7.5126 10.9091 11.6883

[roland]

I've watched the price dropping too, so I thought I should look up the fundamentals. :confused:

Nickel price has halved this year but has a P/E of ~4 and dividend of ~10% and compared to peers doing OK; so seems like IF it can find a bottom then MIGHT be good. :sly:

http://www.investsmart.com.au/company_profile/summary/default.asp?SecurityID=MRE&ExchangeID=ASX

Peer Comparison
P/E (x) EPS Change (%) Dividend Yield (%)
Company Code Last Price Mkt Cap 06A 07F 06A 07F 06A 07F
BHP Billiton Limited BHP $36.92 $208,007M 12.2361 7.7258 4.8539 58.3796 2.2075 3.4921
Rio Tinto RIO $113.80 $146,317M 10.8894 8.9751 54.9274 21.3286 2.2988 2.7832
Fortescue Metals FMG $8.10 $23,653M -43.8174 11.3606 n/a n/a 0.3086 2.6543
OZ Minerals Limited OZL $1.97 $6,524M 11.7224 6.1763 -12.4897 89.7977 4.0609 4.0609
Minara Resources MRE $1.93 $957M 4.6299 4.3064 -33.9245 7.5126 10.9091 11.6883

The problem is that the fundamentals are based on historic returns and SP values. I wouldn't read too much into the % dividend return since it is extrapolated from a higher SP value - i.e. the last dividend price as a percentage of a historic and much higher SP.

To preserve capital MRE may not even pay a dividend the next go around.

[nick2fish]

Peer Comparison
P/E (x) EPS Change (%) Dividend Yield (%)
Company Code Last Price Mkt Cap 06A 07F 06A 07F 06A 07F
BHP Billiton Limited BHP $36.92 $208,007M 12.2361 7.7258 4.8539 58.3796 2.2075 3.4921
Rio Tinto RIO $113.80 $146,317M 10.8894 8.9751 54.9274 21.3286 2.2988 2.7832
Fortescue Metals FMG $8.10 $23,653M -43.8174 11.3606 n/a n/a 0.3086 2.6543
OZ Minerals Limited OZL $1.97 $6,524M 11.7224 6.1763 -12.4897 89.7977 4.0609 4.0609
Minara Resources MRE $1.93 $957M 4.6299 4.3064 -33.9245 7.5126 10.9091 11.6883
All except FMG are diversified miners and FMG is selling the flavour of the month/year. Perhaps a better comparison would be looking at other sole nickel producing companies such as IGO or MCR.
IGO has dropped 64% since FEB and still tanking

[So_Cynical]

mmm, I am really having trouble here why anyone would consider buying into MRE - just look at the chart.....

Personally, I think, that unless your are knife catching, then MRE's trend line should tell all.

Why must we try and get the absolute bottom when the bottom is so uncertain?
And i can post 4 charts that look similar and yet they all bounced.

Why is the MRE bottom so uncertain..im certain we are alot closer to the bottom now than we are to the old top.:rolleyes:

[jman2007]

Murrin Murrin laid off about 400 people on or about the 18th of July. They were mostly contractors, and two charter flights were arranged to fly them out almost immediately. This probably corresponds to the MRE release on the 18th re scaled back operations due to gas supply constraints and the potential difficulty(?) in ordering in sufficient quantities of sulfur.

Beyond this I'm unsure what's happening up there atm, although they sound confident in returning to full production after securing addtional gas supplies.

jman

[Miner]

thanks folks for your recent touch on MRE. Probably we have to wait and see and as Alan Kohler said in Eureka report that it is market for bears. One needs high cash volume to make the right killing - who gets killed who bought the overpriced shares like me :)

In compare shares this mob after few glasses of 40% scotch wrote this

"STEVEN HING
NOVUS CAPITALBUY RECOMMENDATION

Minara Resources (MRE)

The nickel miner has fallen from $6.57 in March to around $2 on July 25. It appears to have been over-sold in the current market despite the switch away from resources in recent weeks. The moving averages on the chart suggest a potential bottoming out, with a move back to $4 a strong possibility."

Bottomed out - when ? I am sure tomorrow the same mob will write another article in his magazine MRE Hold and then after 6 months depending on how market is going he will have head he wins, tail you loose = I TOLD YOU :D

Any way, probably I am dishing out my frustration thinking I made a killing in MRE Ha Ha .

[tech/a]

Talusi has requested this wave count from another thread.

This is an AGET or Algorithmic count.
While it doesnt conform to a classic count it certainly shows this is in a long term bear trend.
I agree difficult to count--there would be many variations.
Even so correctness of count isnt as important as where the stock is in this move.

[Miner]

Talusi has requested this wave count from another thread.

This is an AGET or Algorithmic count.
While it doesnt conform to a classic count it certainly shows this is in a long term bear trend.
I agree difficult to count--there would be many variations.
Even so correctness of count isnt as important as where the stock is in this move.

HI Tech A
Thanks for posting it

Could you please enlighten the chart so that non chartists like me probably understand what are you trying to convey ?

Are you saying MRE will fall further - Gosh it (and my investment in shares and super) is only following Newton''s law of moment of intertia then :)

[eskimo2708]

Hey Miner,

Thanks for your posting.
I assume you are a guru and get none of your trades wrong.
Whilst the price has gone down since I posted the particular recommendation on compare shares, I still think that the company has something.
I am happy to be proved wrong, but I am also happy to stick my neck on the chopping block.
I gave no timeframes on compare shares and i am not asked to.In the current market volatility you are right for about 5 minutes. I am sure that even you would not have predicted the banks to fall this sharply and would have tried to have picked the bottom at much higher levels.
Good luck making money, but next time keep the criticisms to yourself.

[kennas]

Hey Miner,

Thanks for your posting.
I assume you are a guru and get none of your trades wrong.
Whilst the price has gone down since I posted the particular recommendation on compare shares, I still think that the company has something.
I am happy to be proved wrong, but I am also happy to stick my neck on the chopping block.
I gave no timeframes on compare shares and i am not asked to.In the current market volatility you are right for about 5 minutes. I am sure that even you would not have predicted the banks to fall this sharply and would have tried to have picked the bottom at much higher levels.
Good luck making money, but next time keep the criticisms to yourself.Criticism is part of the game here when it's fair and warranted. Miner may have been venting some frustration, but if you get something wrong you have to accept it, or return fire with your justification.

Anyone who makes a call puts their reputation on the line.

If you can't accept that, then don't make any recommendations.

If it turns around at some point, you can say I told you so.

Hard to call a true bottom on a lot of stocks but technically this is hitting some very long term support. But S&R hasn't helped a lot of stocks recently.

[Miner]

Hey Miner,

Thanks for your posting.
I assume you are a guru and get none of your trades wrong.
Whilst the price has gone down since I posted the particular recommendation on compare shares, I still think that the company has something.
I am happy to be proved wrong, but I am also happy to stick my neck on the chopping block.
I gave no timeframes on compare shares and i am not asked to.In the current market volatility you are right for about 5 minutes. I am sure that even you would not have predicted the banks to fall this sharply and would have tried to have picked the bottom at much higher levels.
Good luck making money, but next time keep the criticisms to yourself.


Hi Eskimo

First of all I am not a guru in finance and never can be. I do have lot of deficiencies and lot to learn. Honestly I am learning as fast I can from this forum and own research. I respect most of the postings from many knowledgable personalities like Hangseng, YT, Jman, Kennas, Grace, MS, and many more.

I have been more wrong in my speculations than right so still in RED in my portfolio.

So with this back ground I can not criticise any one because I am not competent to pretend as an expert with my shallow knowledge in stock market and security analysis. So I am unsure how you picked up that I was criticising some one.


What Kennas has rightly said I was trying to vent my frustration on myself.

Truly after having invested on MRE twice at $2.82 and then $2.50 thinking it was very cheap to see the SP is going south indefinitely. I personally thought MRE was good and still think so. But there is no market support and it is okay in this game.

This is a forum shared by people of different knowledge base and that is acceptable (by me at least).

I do however try to post common sense knowledge and information available from public forums to share with others considering I have worked in gold, iron ore, alumina, steel and coal for a large number of years with some of the big producers and consultants. At least by doing that I do not become a passive participant making this forum one way traffic.

I hope to have explained my stand clearly and let us move on doing business.

[Thrive]

Hi,

As an investor in MRE I'm interested in the following:

1. MRE's ability to produce nickel
2. How it's produced and at what cost
3. Demand v supply
4. LME price of nickel
5. Those interested in MRE

1/ MRE has had a history of problems getting to its nameplate production of 40,000t of nickel and the recent WA gas issue has not helped. However the gas issue is short term and production is now at full capacity with the increase in energy cost hopefully short term so nameplate production is still a realistic short term target (24k nickel MRE).

2/ From what I can gather sulphide nickel is cheapest and is best positioned on current nickel prices however its becoming more rare. Nickel pig iron is becoming more common however it has a big demand on energy making it not cheap to produce ($18kpt sounds close to production cost). Lateritic nickel (MRE) is more common however sulphur is needed and sulphur prices have soared putting LME nickel prices close to production costs.

3/ LME nickel stocks are high and metal producers are saying there is less demand as they move toward stainless steel products requiring less nickel. However LME nickel stocks have fallen from 48k to 43k in the last two months.

4/ Current LME nickel prices would be hurting producers with increased sulphur and energy costs (lateritic and pig iron) however I believe this is a dramatic fall from unrealistic prices of $30-55kpt seen in the second half of last year. You would think the cost of production would create some bottom to LME nickel prices and I think we're there heading towards a balance around $22kpt.

5/ Director increasing his interest @ $5.85 in May, $3.30 and $3.00 in June and Barclays recently increasing their interest to 8.45% at an average price of $3.62 gives me some confidence.

Summary: MRE has a massive resource and its heap leach project providing it works and within costs will reduce its production costs and increase production. Glencore has a massive interest in Murrin Murrin with a 40% interest in project and another 53% in MRE which is almost a 72% interest in Murrin Murrin.

Lets not forget that cobalt prices are still around 90kpt and MRE produced 300t last quarter.

Whilst I think MRE is hurting at the moment I think it is short term hoping LME nickel prices improve, AUD/USD hits 90c, heap leach project works and sulphur prices retreat.

Assuming Glencore sees future value in nickel they must be thinking now is a good time to move on the remaining 28% interest in Murrin Murrin (maybe what Barclays is thinking).

IMO MRE's SP has bottomed assuming the LME nickel price finds support and sulphur prices retreat.

MRE market cap is now just over $800m making the 28% of Murrin Murrin not owned by Glencore only $376m.

Please advise if I have an of this information wrong as this is what I'm basing my hold decision on.

[Miner]

Hi,

As an investor in MRE I'm interested in the following:

1. MRE's ability to produce nickel
2. How it's produced and at what cost
3. Demand v supply
4. LME price of nickel
5. Those interested in MRE

1/ MRE has had a history of problems getting to its nameplate production of 40,000t of nickel and the recent WA gas issue has not helped. However the gas issue is short term and production is now at full capacity with the increase in energy cost hopefully short term so nameplate production is still a realistic short term target (24k nickel MRE).

2/ From what I can gather sulphide nickel is cheapest and is best positioned on current nickel prices however its becoming more rare. Nickel pig iron is becoming more common however it has a big demand on energy making it not cheap to produce ($18kpt sounds close to production cost). Lateritic nickel (MRE) is more common however sulphur is needed and sulphur prices have soared putting LME nickel prices close to production costs.

3/ LME nickel stocks are high and metal producers are saying there is less demand as they move toward stainless steel products requiring less nickel. However LME nickel stocks have fallen from 48k to 43k in the last two months.

4/ Current LME nickel prices would be hurting producers with increased sulphur and energy costs (lateritic and pig iron) however I believe this is a dramatic fall from unrealistic prices of $30-55kpt seen in the second half of last year. You would think the cost of production would create some bottom to LME nickel prices and I think we're there heading towards a balance around $22kpt.

5/ Director increasing his interest @ $5.85 in May, $3.30 and $3.00 in June and Barclays recently increasing their interest to 8.45% at an average price of $3.62 gives me some confidence.

Summary: MRE has a massive resource and its heap leach project providing it works and within costs will reduce its production costs and increase production. Glencore has a massive interest in Murrin Murrin with a 40% interest in project and another 53% in MRE which is almost a 72% interest in Murrin Murrin.

Lets not forget that cobalt prices are still around 90kpt and MRE produced 300t last quarter.

Whilst I think MRE is hurting at the moment I think it is short term hoping LME nickel prices improve, AUD/USD hits 90c, heap leach project works and sulphur prices retreat.

Assuming Glencore sees future value in nickel they must be thinking now is a good time to move on the remaining 28% interest in Murrin Murrin (maybe what Barclays is thinking).

IMO MRE's SP has bottomed assuming the LME nickel price finds support and sulphur prices retreat.

MRE market cap is now just over $800m making the 28% of Murrin Murrin not owned by Glencore only $376m.

Please advise if I have an of this information wrong as this is what I'm basing my hold decision on.

Dear Thrive

First of all thanks for putting such a comprehensive true picture on MRE and NIckel Market.

I believe all you said is correct and meaningful.

I did not realise one of my colleagues has actually worked in Murin Murin plant for few years and that person confirmed me today about the name plate issue. Ironically I saw your posting tonight and your query on name plate capacity.

Yes, achieving production as per name plate is a long standing issue for MRE. However from Andrew Nickel Plant to current stage has seen a lot of improvement. I believe from discussions with ex MRE personnel that once gas comes back unless Ni demand drastically falls, it will be in black. Th massive investment in major maintenance program will also see the benefits.

So I am keeping my eyes open to see for come November.

Thanks again for your posting

[So_Cynical]

Nice Post Thrive

And well summed up...other factors in MRE's favor are the credit crunch
combined with low nickel prices, will delay development of other Lateritic
deposits (reducing future world supply) and the fact that MRE actually
produces Nickel Briquettes, a finished product...unlike MCR and IGO

40 year mine life, and world top 10 producer status means MRE is Australia's
premier Nickel play....and that's gota be worth something....well more than
the current SP...long term.

:2twocents

IMO

[oldblue]

Yes, good post, Thrive.
Pretty well sums things up as far as my limited knowledge goes.
I'm not really a techie as such, but I'd be waiting to see a bit of strength in the SP before buying. On the other hand I'd be prepared to hang on to an existing holding.

Disc: Not a holder but have positions in MCR and PAN.

:)

[McNovice]

I'm thinking this baby is on it's way back up.

Some good previous posts, and with Sulphur on a high which should be sorted mid next year they say, The Gas problem soon to be sorted and not having to pay large prices for replacement Gas, I think give this one 6 months and it will be back near it's price prior to the explosion, it has taken one hell of a beating.

Hoping again

[renim]

one other name to consider - voisey bay
a decade ago it was the great northern monster that would reduce ni cost base by 25%, but it died....
recently i heard that its now into initial production.

[So_Cynical]

one other name to consider - voisey bay
a decade ago it was the great northern monster that would reduce ni cost base by 25%, but it died....
recently i heard that its now into initial production.

Seems to be so.

http://vinl.valeinco.com/

Its a big sulphide type deposit in Canada...full production in 2011, its developing underground
and would be producing at a similar cost to similar Aussie operations.

[So_Cynical]

31/07/08 I'm thinking this baby is on it's way back up. :sheep:

Today's 20% fall on no announcement or news has to be some sort of a record for
an ASX100 miner....i would think its unprecedented.:dunno:

Anyway ive been reading old ann's...going back to 2003 when nickel and cobalt prices
were substantially lower than they are now (even with the recent cobalt drop) and back
then MRE was profitable.

I just cant see why they wouldn't be now.:dunno:

I think ill average down tomorrow.:dunno::bonk:

[tulasi74]

:sheep:

Today's 20% fall on no announcement or news has to be some sort of a record for
an ASX100 miner....i would think its unprecedented.:dunno:

Anyway ive been reading old ann's...going back to 2003 when nickel and cobalt prices
were substantially lower than they are now (even with the recent cobalt drop) and back
then MRE was profitable.

I just cant see why they wouldn't be now.:dunno:

I think ill average down tomorrow.:dunno::bonk:

Are MRE still profitable? I read something that talked about rising sulfur prices having a huge impact on their costs and MRE laying off staff to combat that?

I guess all commodity prices have gone down recently because there are fears that demand will slow down and there is excess supply. All this will do is drive some small producers out of business through which supply will be eased and once again there will be equilibrium.

I think it was last Feb when there was a huge correction in commodities based on demand fears from China which was later unproven.

The market always overreacts on the downside very quickly but slowly corrects. So in time the price will be back up. Huntley's on Etrade are recommending this stock for trading only and I tend to agree.

[colin065]

Hi all:

hope we all make profit in MRE in the long run.

A friend of mine is running a factory producing sulphuric acid, he has just had this industry seminar based in China. people in the seminar all rekon that the sulphur price is going to drop in the next half year, mainly because china is going to decrease the amont of fertilizer produced aiming environmental improvement. this will drag down the sulphur price.

just wondering why there is almost nothing about MRE on AFR? and since Barclays has increased holding in MRE again, there must be a strategic reason to invest more in MRE. personally i am willing to hold MRE for long term investment, but i think in short term my account is going to be in red....

Half year report is due 20/08/08, hope it will impress us.

Happy trading to you all

[Thrive]

Thanks Colin065

Sulphuric acid has been a difficult one for me to understand:

Where it comes from and how it's produced
Who needs/uses it (I know Minara needs it)
Why has the cost increased so quickly (no doubt supply/demand related)
When will it ease and why

I hope your friend is right - do they get a staff discount? Minara might be interested :D

The half year report will be interesting (cant say I'm not nervous). A 20% fall in one day makes buyers and holders worried especially with no recent news.

I'm now trying to determine bad v good news. Half year profit is no doubt going to be less than $184m (thats half last years) but hey at the current market cap it should be.

At the current $1.49 SP to achieve a 10%pa EPS we're looking at 7.5c or $35m before tax profit for the half (I think thats right). Is this fair before outlook consideration?

$35m and a positive outlook will be enough for me to hold unless convinced otherwise.

Nickel continues to fall however the AUD has also dropped to 91.5c

Cons - Nickel continues to fall and it is said demand is weak
Pros - AUD is now down to 91.5c softening the fall in Nickel prices, Colin065 gives me hope on the high cost of sulphuric acid and Newcrest (NCM) announced today they are now using Apache's gas (albeit 50%) so MRE might also revert back to a cheaper supply of energy.

Outlook - a cheaper energy supply by mid August, increase in production, increase in demand (hopefully) due to seasonal low, lower sulphuric acid costs.

Lets say you were Glencore and things do start to improve for Nickel what would you do? Shareholders could lose out big on a Glencore takeover bid at these levels.

Nameplate production + 22kpt US Nickel price + 90c AUD + cheaper sulphuric acid + cheaper energy = happy Thrive MRE investor.

Sorry for the ramble.

Thrive

[So_Cynical]

MRE is also a top 5 world Cobalt producer and Cobalt prices have come off there
highs in the last few weeks, and that added to the current SP woes.

On the brite side Cobalt is a rare metal and demand will grow as its a key component
in the manufacture of Hybrid and electric car batteries.:)

As for the half year report...i figure all the downside is factored in...considering the
80% (approx) fall in the share price since Mar/Apr 2007

I'm holding.

[tulasi74]

I too thought the report was due 20 August. Imagine my surprise when I saw it out today.

Am also surprised there is no commentary on the report.

I am only a new investor in MRE so have been reading all the posts as part of my research.

Can anyone who has been following the company for a while make some comments on their half year accounts please?

Tulasi

[Thrive]

Agree Tulasi, where did that come from?

Visit Minara's home page and it states half year report out 27 August and the E*Trade market calendar states 22 August - whilst a few different dates today was a surprise.

Report was better than I was prepared for, mind you not much emotion in it as far as outlook, and Nickel prices have taken a big hit since 30 June which is probably why I expected it to be worse.

No dividend and expansion of heap leach project put on hold is not a surprise and no doubt supported by shareholders.

$5.24lpUS cost to produce, again better than I had expected - I thought margins would have been tighter.

Report obviously not better than the market had expected with SP largely unchanged.

Minara's focus now appears to be on reducing cost rather than the heap leach project expansion. Maybe a close link between this and the 400 odd laid off previously advised by Jman on the 28 July. Prefer to make a profit on less, than a loss on more - sounds reasonable to me.

AUD still falling and Nickel up just now over 5% on reports of Industrial Metallurgical Holding, based in Moscow considering production cuts. Canceled warrants also back over 2,000t.

Assuming no scary stuff tonight I think we're in for a good day tomorrow - better say why:

Results to sink in.
Nickel up.
Canceled warrants up.
AUD down.

Like Tulasi, I'm also interested to hear thoughts on half year results and why it came out today.

Thrive

[So_Cynical]

No dividend :(


Minara recorded a net profit after tax for the half year to 30 June 2008 of $50.9 million (2007: $245.9 million).
The company recorded a gross profit of $82.3 million for the six months to 30 June 2008.
At 30 June 2008, cash on hand totalled $66.0 million.
The company remained debt free with a strong balance sheet.
Minara has experienced a range of cost pressures including escalating prices of inputs such as sulphur and gas, a decline in the nickel price and a very strong Australian dollar.
the Board has taken a conservative financial management approach and has not declared a dividend for the period.


http://www.minara.com.au/files/docs/163_Half_Yearly_Results.pdf

[So_Cynical]

Today Ann...Open Briefing, Minara. MD on Profit & Outlook.

http://www.minara.com.au/files/docs/164_Open_Briefing_-_Minara_MD_on_Profit_and_Outlook.pdf




At current nickel prices, we remain competitive and the focus going forward is to improve our production profile, reduce our costs and deliver a stronger operating margin.

There is enormous potential for profit in MRE @ $1.60, considering the 2007 high of over $9.60.
all things being equal, if nickel prices ever got back to the record high of 2006 then MRE would
also (theoretically) revisit the recent SP highs and represent a profit of over 600%.:eek:

[Miner]

No dividend :(


Minara recorded a net profit after tax for the half year to 30 June 2008 of $50.9 million (2007: $245.9 million).
The company recorded a gross profit of $82.3 million for the six months to 30 June 2008.
At 30 June 2008, cash on hand totalled $66.0 million.
The company remained debt free with a strong balance sheet.
Minara has experienced a range of cost pressures including escalating prices of inputs such as sulphur and gas, a decline in the nickel price and a very strong Australian dollar.
the Board has taken a conservative financial management approach and has not declared a dividend for the period.



http://www.minara.com.au/files/docs/163_Half_Yearly_Results.pdf


It is so sarsastically ironic to read the MRE report that Directors are PLEASED to report bla bla for a profit reduced by 80%. Why they were pleased ?

They should cry and shed crocodiles tears like politicians. How dare they to insult the share holders stating the report was their pleasure :mad:

Surprisingly the SP went up today. What goes with market who knows

Regards

[Chief Wigam]

At least all the bad news is out now. I expect to see sp back over $2 early next week, expecially as AUD continues to tank.

[Mr Peaman]

TAKEOVER ON HANDS!!!!

http://uk.reuters.com/article/oilRpt/idUKSYD10935320080810



"--The nickel division of Swiss-based diversified miner Xstrata (XTA.L: Quote, Profile, Research) has flagged more acquisitions in the sector as the price of the metal continues to decline. Xstrata Nickel this year bought West Australian (WA) nickel producer Jubilee Mines for A$3.1 billion. "We've seen some almost distressed situations which represent good value," Xstrata chief financial officer Shaun Usmar said last week. Observers suggested Australian nickel miners on Xstrata's radar may include WA-based Minara Resources (MRE.AX: Quote, Profile, Research). Page 17."


No Brainer at these levels

[tulasi74]

The SP action today doesn't smack of takeover speculations. Down 23.5 cents or 15 percent on double the normal volume. I am really hoping this is capitulation by the fearful and the stock might rally tomorrow. No better time than now for someone to make a move.

What might count against Minara is that they are a very high cost producer and their Heap Leach project is yet unproven.

Tulasi

[tulasi74]

Low of $1.16 today. Does anyone know why share price has been hammered last two days?

Anyone think its close to bottom yet?

Tulasi

[gxshen]

Someone tries to push the price down. Block it to be below 1.20$. I guess they just want to wash people to panically sell. They are too greedy and ridiculous. The price has been so low, while the company is making money and of value. Let them play the "dirty" game. Ignore them!

Luckily see some force jumped in to buy.

[tulasi74]

Apparently UBS put out a note saying that their cost of producing nickel could rise to 8.00/lb of nickel which would effectively have them making a loss next year. I agree that its probably panic selling but volume once again is high which is not good.

Tulasi

[So_Cynical]

I would think that with today's low, MRE is considered to be at risk of running
out of money and producing at a loss...or worse in the longer term.

if PON continues at current levels for more than 12 months, 1 or 2 of the top 20
world producers would probably stop production, as it would be uneconomical to
continue at a loss.

Unfortunately MRE sticks out like a sore thumb as a major producer with nothing
behind it...compared to BHP, Vale Inco and Norilsk.

:dunno:

Having said that...ill top buying more tomorrow.

[Miner]

:confused::mad:
I would think that with today's low, MRE is considered to be at risk of running
out of money and producing at a loss...or worse in the longer term.

if PON continues at current levels for more than 12 months, 1 or 2 of the top 20
world producers would probably stop production, as it would be uneconomical to
continue at a loss.

Unfortunately MRE sticks out like a sore thumb as a major producer with nothing
behind it...compared to BHP, Vale Inco and Norilsk.

:dunno:


Having said that...ill top buying more tomorrow.

So Cynical in true form you are :)

If I can swap the role with you and become a cynical now or superstitious looks like this nickel plant has a jinx.

When it was Anaconda Nickel with our Andrew Forest it was jinxed with production loss, lack of name plate capacity and share price crumbled.

Now Minara was behaving good for some time and looked okay. But again the jinx has overpowered and it is going down like a speculative explorer than a producer. :mad:

Probably Mr Peter Johnson's past politics or vendetta to sack his ex WMC colleague (He is now in Rio ) is turning the circle. Probably the place needs some Feng Shui to get over the bad omen ?


Disclosure : I am still holding MRE bought at $2.8 and $2.5 and will dispose at pepper corn value !!!!

[Whiskers]

:confused::mad:

So Cynical in true form you are :)

If I can swap the role with you and become a cynical now or superstitious looks like this nickel plant has a jinx.

When it was Anaconda Nickel with our Andrew Forest it was jinxed with production loss, lack of name plate capacity and share price crumbled.

Now Minara was behaving good for some time and looked okay. But again the jinx has overpowered and it is going down like a speculative explorer than a producer. :mad:

Probably Mr Peter Johnson's past politics or vendetta to sack his ex WMC colleague (He is now in Rio ) is turning the circle. Probably the place needs some Feng Shui to get over the bad omen ?


Disclosure : I am still holding MRE bought at $2.8 and $2.5 and will dispose at pepper corn value !!!!

I'm looking closely at getting into MRE at these prices, but as you say, miner, bad karma tends to dog enterprises and so far I haven't got that irresistible urge to buy... rather the bad feeling in the gut urge to be patient.

[Mr Peaman]

AUD down and nickel price slightly up. Lets hope the trend reverses today and shorters get squeesed.:) then again. I'm hoping for $1 so i can get some more!:)

[So_Cynical]

I'm hoping for $1 so i can get some more!:)

And i thought i was being cheeky @ $1.09...i just missed out today.:rolleyes:

Anyway today i was wondering what the real value of the Minara was..?
considering the 560million odd market cap. (yesterday)

Whats the replacement value of the plant?

Murrin Murrin 340mt @ 0.99% Ni
Deposit Targets
Marshall Pool 321mt @ 0.69% Ni
Weld Range 329mt @ 0.75% Ni

I'm very bad at maths, but figure that's close to 8 million tonnes of nickel
with a current ridiculous low price around 18000 USD a tonne, so about

144000 million :eek: is that 144 billion? or ?

http://www.minara.com.au/files/docs/107_Presentation_to_Investors_-_29_February_2008b.pdf

[prawn_86]

Murrin Murrin 340mt @ 0.99% Ni
Deposit Targets
Marshall Pool 321mt @ 0.69% Ni
Weld Range 329mt @ 0.75% Ni

I'm very bad at maths, but figure that's close to 8 million tonnes of nickel
with a current ridiculous low price around 18000 USD a tonne, so about

144000 million :eek: is that 144 billion? or ?

http://www.minara.com.au/files/docs/107_Presentation_to_Investors_-_29_February_2008b.pdf

Yep it is 144 billion :)

But if it cant be extracted/produced at a profit then it is virtually useless.

I dont follow these guys, but if the Ni price keeps falling they will need to cut costs or figure out a better extraction method

[Whiskers]

Yep it is 144 billion :)

But if it cant be extracted/produced at a profit then it is virtually useless.

I dont follow these guys, but if the Ni price keeps falling they will need to cut costs or figure out a better extraction method

I'm working on the nickel price from an EW perspective. At this stage I think it may have to bottom around 7.4 US cents/lb.

The good news though is I think this correction is going to be pretty sharp compared to the last of the same degree... ie was about 12 years through the 80's and 90's. So I'm working my ass off to make sure of the larger cycle situation, cos if my inital sums are correct, it will rebound as quick as a flash once it hits the low.

This one is possibly shaping up to be a good canidate to pay the purchase price in dividends, within a year or two, if it takes a few more weeks to hit it's low and the price breaks under the dollar. :sly: