MRE - Minara Resources

[wintermute]

ok just did some quick back of the envelope calculations... the massive rights issue (which I was unaware of till tonight) at the end of 2008 changes things significantly IMO... before the rights issue Minara had 467 Million odd shares... after it they had 1.1 Billion odd shares (700 mill issued)...

Quick estimate for profit (which is probably on the high side) for the second half would be $84 million after tax. I have not taken anything other than the increase in cash for the last two quarters into account.

If that figure were in the ballpark, then the eps would be 7c/share. Now I'm not sure what p/e ratios are running at presently but I recon 10 would be on the high side, which would put the sp at 70c...

I'm not so excited anymore... The key with minara is (or at least was) that increasing nickel and cobalt prices = pure profit (once they get past the break even point) if Nickel goes up by $5000 per tonne then minara's pre-tax profit goes up by $5000 per tonne... It's a very simple equation by the looks of things they have also been reducing their running costs which is great, but to me (if my quick and dirty calcs are right) it doesn't look to be anything to get too excited about. But watch that nickel price, if it starts to rise so should MRE's profits, but unfortunately It doesn't look like we will ever see the highs that we once did after the massive dilution from that placement.

Tony.

 

[So_Cynical]

We certainly wont we the SP high broken ever one would think...well Nickel at 99000 a ton mite do it besides the fact that they have a lot more shares than they used to have, what's really changed for MRE? all the positives remain.

• Nickel back near 18000 per ton and trending at that level
• Record production
• Still a top 10 producer
• Still has a 20 year + mine life
• 3 to 4 Mill a week cash positive.
• 240 mill cash on hand

How long will they just keep sitting on cash and not paying a dividend? i imagine its just a matter of time...unless the nickel price tanks :dunno: anyway ill go on the record as saying MRE is good buying at current levels (sub 80 cents) and will bounce.
~

 

[skc]

ok just did some quick back of the envelope calculations... the massive rights issue (which I was unaware of till tonight) at the end of 2008 changes things significantly IMO... before the rights issue Minara had 467 Million odd shares... after it they had 1.1 Billion odd shares (700 mill issued)...

Quick estimate for profit (which is probably on the high side) for the second half would be $84 million after tax. I have not taken anything other than the increase in cash for the last two quarters into account.

If that figure were in the ballpark, then the eps would be 7c/share. Now I'm not sure what p/e ratios are running at presently but I recon 10 would be on the high side, which would put the sp at 70c...

Tony.

They have 21c per share in cash which doesn't attract a PE of 10. If you take cash out of the equation then 7c EPS on a SP at 50c gives a PE ~7x which improves the picture somewhat.

 

[So_Cynical]

Well 7 months later and the MRE SP is back down around 81 cents i reckon it cant last, according to there quarterly report released today, MRE have achieved record levels of production in both Nickel and Cobalt, and are sitting on 247 million in cash

MRE quarterly out today and there's another 27 million in the bank, and that's in a quarter when they do regular shut downs and maintenance...MRE pocketing a little over 2 million cash a week. and now sitting on 274 mill.

The odds of getting a dividend this calendar year now have to be pretty darn good.IMO

http://www.minara.com.au/files/docs/270_March_Quarterly_2010.pdf

 

[tehnoob]

Certainly if no dividend is paid a share buyback would be much appreciated. I guess this would depend on the Ni price not going much lower though.

 

[So_Cynical]

Certainly if no dividend is paid a share buyback would be much appreciated. I guess this would depend on the Ni price not going much lower though.

Yep that's another option...and thinking about it, probably a more likely option, just have to hope the Nickel price holds above 18000...other wise they wont do nothing, but thinking about that they could still afford a dividend coming out of the interest earned on that 300mill just sitting in the bank.

 

[So_Cynical]

I originally bought in at 6.40 then averaged down at 1.50 and finally 30c with an average of 80c.... And I wasn't the only one buying at these prices.

For me it was

• $2.53
• $0.83
• $0.30

I really just need to forget i have this holding and come back in 12 months.

14 months later and ive broken one of my golden rules (well i am a discretionary investor) and taken yet another average down, this time @0.67, and its a big one :bunny: time will tell if its stupidity or sheer genius.

Off the top of my head my average price now should be around 72 cents...so arguably this buy could turn my whole MRE position around pretty quickly...2 years is just to long to be in a trade, really need to wrap this up, as doing nothing was getting me nowhere.

 

[Dono]

Haha I was thinking the same just the other day, probably the only stock I haven't traded through this whole thing, To me it lacks direction... not alot of announcements and still on their "back to basics" strategy. missed out on Ravensthorpe... so what next I say. Anyone know what they are up to?

 

[uahmad]

I did some reading on this company last week, looks very solid.
Cash in the bank and making money.

If/When things turn around this will jump very quickly IMO.

Im in today...

 

[uahmad]

Wow timed my entry to perfection.
MRE just announced a return of 9.5 cents per share to shareholders. Huge announcement!

This really shows the company stregnth

 

[So_Cynical]

January 2010 - How long will they just keep sitting on cash and not paying a dividend? i imagine its just a matter of time

April 2010 - MRE quarterly out today and there's another 27 million in the bank, and that's in a quarter when they do regular shut downs and maintenance...MRE pocketing a little over 2 million cash a week. and now sitting on 274 mill.

The odds of getting a dividend this calendar year now have to be pretty darn good.IMO

14 months later and ive broken one of my golden rules (well i am a discretionary investor) and taken yet another average down, this time @0.67, and its a big one :bunny: time will tell if its stupidity or sheer genius.

LOL i told ya's

Wow timed my entry to perfection.
MRE just announced a return of 9.5 cents per share to shareholders. Huge announcement!

uahmad you prob brought in a cent or so cheaper than my last buy..great timing for the both of us : The SP should see $1 sometime before the record date as the low risk punters jump on for the easy money.

I love the stock market. :grinsking

 

[So_Cynical]

Minara have released a investor presentation today..ill list some highlights and link.

• Financially strong with over A$360 million at bank at 30 June 2010
• Operator and 60% owner of the Murrin Murrin nickel facility
• Committed to shareholder returns, A$110 million capital return in Sept 2010
• Australia‟s 2nd largest nickel Reserve
• Aust's longest life nickel producer +30 years based on current Reserves
• A world top 10 cobalt producer
• 10 years continuous operation and re-investment in the business
• Murrin Murrin replacement value estimated A$3-4 billion

http://www.minara.com.au/files/docs/289_Investor_Presentation_July_2010.pdf

 

[Miner]

I have had burnt my fingers by buying MRE and selling a very discounted prices in recent past. So please consider my thoughts are coming from some one who could not deliver !!

However, I got a hunch that Andrew Forrest with $1b cash may attempt to take over MRE to fulfil his first dream Anaconda Nickel - his once dream (and doomed then) project.

Andrew is more matured now, got enough money and MRE is more established under Peter Johnson.

May be my wild thoughts - but who knows.

 

[So_Cynical]

The 9.5 cents per share capital return is now official the SP behaviour since the announcement on the 7th of July seems to indicate that the market somehow didn't believe it or just wasn't interested in the tax free easy money on offer :dunno: seems amazing to me that people don't seem to be interested in easy money.

Keeping in mind the Nickel price has been over 21K per tonne for quite a while now, meaning Minara is making approximately 2.3 million dollars profit a week. ex date is Aug 25 with a pay date of Sept 6 so by the time its done and dusted MRE will be still sitting on a substantial pile of cash..maybe 300mill.

Having said all that i wont be surprised not to see the SP above 90 cents before the ex date.

http://www.minara.com.au/files/docs/295_Return_of_Capital_Approved_by_Shareholders.pdf
~

 

[Dono]

The 9.5 cents per share capital return is now official the SP behaviour since the announcement on the 7th of July seems to indicate that the market somehow didn't believe it or just wasn't interested in the tax free easy money on offer seems amazing to me that people don't seem to be interested in easy money.

Fair comment and I have seen some really great announcements in a number of my other stocks go seemingly un-noticed as well, sign of the times hard to make money in any market even if you pick a winner. (Unless your the guy collecting my rent here in Hong Kong).

 

[Boggo]

I think Iress may have got this wrong.
My EOD data shows that this closed on $0.84 yesterday so it should be negative.
.

 

[skc]

I think Iress may have got this wrong.
My EOD data shows that this closed on $0.84 yesterday so it should be negative.
.

It goes ex capital return today by 9.5c. So Iress adjust it accordingly.

i.e. It there was no movement the sp should be 74.5c.

And it turned out that So_Cynical was right - it was a bit of free money had you buy yesterday and sell today.

 

[Boggo]

Thanks skc, I just read the report, I should have done that first

(Now I have to make up a few more characters so I can add this reply)

 

[wtang89]

Hi all,

I thought it goes ex capital return on the 25th? Any explanation on the matter is MUCH appreciated.

Cheers all

 

[skc]

Thanks skc, I just read the report, I should have done that first

(Now I have to make up a few more characters so I can add this reply)

One of the better things about Iress imo. They adjust the prices on the chart as well so you see a more true picture.

There would be no adjustment if the money was paid out as special dividend or something like that, although one can argue that the effect on shareholder is the same.

Hi all,

I thought it goes ex capital return on the 25th? Any explanation on the matter is MUCH appreciated.

Cheers all

25th is the record date. T+3 settlement meant that the ex-date is today.