Often the market gets it nearly right whether to the downside or upside, but rarely gets it exact, and over time we see that a stock has been overbought or oversold.
In this case here, are there any positives to help outweigh the major negatives?
We'll, they have circa $80m in the bank, so are not going to fall over tomorrow.
That is a positive to consider.
They are in talks with another suitor for their inventory, one being already the major buyer.
Yes they have had their other major buyer indicate they are pulling the plug in Nov, but can they do a deal with the current large buyer to at least shore up their production going forward?
Its a maybe, but could be a positive if they can get some sort of reasonable terms.
They have I believe to be $16m due in January 2014.
Perhaps they need to produce until end of November, then close down to standby status to reduce overall costs.
If producing is negative, then don't do it until it can be positive.
At a current market cap of under $20m, and $80m cash in the bank, there could be some upside potential, if they can heavily reduce costs until the outlook for Ni prices changes.
The issue then is time decay and cash burn even over time.
They could possibly get the cash into some form of high interest account to at least bring in some form of income.
Im unsure on what terms the $400m debt is under, however the $50m debt at LIBOR plus 6% seems a tad high to me.
Anyhow, there are some small positives to think about when the market is being 99% negative.
I'm by no means saying buy, but its always good to look at all angles before making any choice on what to do.
GL all.
MBN Price at posting:
1.5¢ Sentiment: None Disclosure: Not Held
