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From memory they are tied up pretty heavily with Panoramic in the Savannah mine, which seems to have become a bit of a dog, the push for battery grade nickel might be an issue for some producers?
WSA - Western Areas
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Here's a quick little chart I did by looking at the summary of the last few EOFY announcements. Red dots and blue dots show the guidance range (upper and lower) and the green line shows the actual. The trend is crystal clear- WSA costs are skyrocketing. The new guidance of 3.5 to 4.0 announced yesterday seems far more reasonable. I doubt this is a one off hiccup. May have to call PPT and offer my services!
Would not surprise me if the $30m investment in PAN, and $300 m for the new mine has stretched WSA too thin. Cash balances of $120m + a quarterly operating cashflow of +$10 million does not seem enough to fund the remaining commitments for the next 2-3 years without taking on debt or raising capital. May have to do a little more research on that one. It's easy to bet againt these juniors building mines.
Would not surprise me if the $30m investment in PAN, and $300 m for the new mine has stretched WSA too thin. Cash balances of $120m + a quarterly operating cashflow of +$10 million does not seem enough to fund the remaining commitments for the next 2-3 years without taking on debt or raising capital. May have to do a little more research on that one. It's easy to bet againt these juniors building mines.
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Good summation, well worth researching further IMO.
So_Cynical
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A lot of bottoms around the $1.90 - $2 range - 7 times in 5 years, has been a bad 5 years for nickel though, and now COVID and growth worries.
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Could argue It's been a great 5 years for nickel and a bad 5 years for WSA. Revenue growth for 5 years has not translated in to shareholder returns. I do think there are a lot of people looking at charts seeing that same $2 'floor' and thinking this is a good price. I do not think it's a good price.
$145m - Cash in the bank of EOFY.
$190m - Rough operating cash costs
$170m - Rough Capex for this year
$10m - Rough leases+dividends
Nickel prices need to be +$21,000/t all year to get them to about $270m revenue based on lower guidance of 18kt.
A possible FY21 scenario: $270+$145-($190+$170+$10)=$45m left. And they still have $130 million to spend on odyseus for FY22 plus all their other capital spending. $270+$45-($190+$130+$35+$10)= -$50m shortfall.
If there's a drop in nickel prices, if there is a second guidance downgrade, if their mine project has delays and additional costs, WSA are going to be in a far worse position than above. What will be very interesting is how things go with PAN. PAN spent 12 million last quarter and in 3-6 months may need another cash injection. Will WSA give them more? The only upside in my book is that they are still drilling and exploring. Never know what that can bring.
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As both you and @peter2 have pointed out, the elephant in the room for WSA, is the falling recovery rates increasing underlying costs.
Unless they come up with a new higher Ni content resource to halt the slide, or the price of Ni takes off, things will get progressively tougher.
Good pick up.
I don't hold, am holding MCR and thinking about IGO.
So_Cynical
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The 20 year nickel chart makes the last 5 years look not so good, fair enough that the crazy prices of 2007 and 11 were extreme, 21K - AUD being sustained is not crazy by any stretch, a new 8 year high isn't that far away.
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Some extract
Contrary to market Morning Star and Fat Prophets have maintained their buy ratings.
Could that to take the opportunity to keep the heat on and for them to sell out ?
Morningshar provides a fair value $1.9
DYOR
Contrary to market Morning Star and Fat Prophets have maintained their buy ratings.
Could that to take the opportunity to keep the heat on and for them to sell out ?
Morningshar provides a fair value $1.9
DYOR
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Hi @Miner it is interesting to compare WSA and IGO's quarterly activity statement, both are pretty comprehensive.
Their share prices do seem to reflect where both are at IMO.
Their share prices do seem to reflect where both are at IMO.
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Thanks, mate @sptrawler. good information.
So_Cynical
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Pretty sure they had close to enough money to get the new (old) mine up and running.
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WSA came up on my CAM weekly scan and is travelling well so far.
Looking at the wave count on the weekly chart below for interest, WSA shows some potential upside for the typ. W3 but we will see.
Holding @ 2.77
Looking at the wave count on the weekly chart below for interest, WSA shows some potential upside for the typ. W3 but we will see.
Holding @ 2.77
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I couldn't help my self and added to my position today. SP currently sitting @ $3.02 so hopefully it holds the $3 level.
Dona Ferentes
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• Fully underwritten placement to raise A$85 million @ $2.15 floorprice, with bookbuild
• Non-underwritten Share Purchase Plan available to eligible shareholders to raise up to A$15 million at the same price as the placement
• Proceeds from the placement and Share Purchase Plan will be used to complete the Odysseus development, advance organic growth projects at Forrestania and Cosmos and continue exploration
• Non-underwritten Share Purchase Plan available to eligible shareholders to raise up to A$15 million at the same price as the placement
• Proceeds from the placement and Share Purchase Plan will be used to complete the Odysseus development, advance organic growth projects at Forrestania and Cosmos and continue exploration
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IMVHO another ripoff spp. Price now below the spp price. Retail investors shouldn't lose as much.
The performance of the WSA share price has been a huge disappointment at a time of record nickel prices and the significant underlying demand for more nickel production.
The performance of the WSA share price has been a huge disappointment at a time of record nickel prices and the significant underlying demand for more nickel production.
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Oh my. Begging bowl out again! For all the hard years of being a shareholder one can have the privilege of subscribing to shares at $2.15 - or can buy them on market for $2.05 today.
Nickel has been climbing for 5 years. WSA shareholder value has not. The company needs a clean-out (Despite being being a fantastic short term trading opportunity).
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It will be interesting to see the uptake on the raising, the price of nickel has been falling for the last month, so could be a hard call for WSA.
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@divs4ever . I agree, WSA has been a dog since the GFC. Even for this short term trader it's been a tricky one to trade. It's on my never to be traded list.
Here's monthly chart (a timeframe that I only look at once in a blue moon) showing the disappointing price movement since the GFC.
Here's monthly chart (a timeframe that I only look at once in a blue moon) showing the disappointing price movement since the GFC.
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