MRE - Minara Resources

[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

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.