MRE - Minara Resources

[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 !!!


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 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 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