entered at $2.22 today but now lack full conviction as further reading alerted concerns i wasn't aware of. Here's some pros and cons:
ARC : Company Profile - WSA
Bulls Say
Bears Say
- • Grades at Flying Fox and Spotted Quoll are spectacular, and will underpin low costs and industry-leading margins.
- • Western Areas is leveraged to exploration upside via large acreage in the prospective Forrestania nickel belt. Exploration is likely to make sizeable resource additions and new discoveries.
- • The banning of ore exports from Indonesia means that ore stockpiled for nickel pig iron production in China will rapidly deplete, and a key source of supply, which has been a force for lower prices, will start to decline.
- • Nickel is strongly leveraged to growth in the developing world. China and India will continue to move towards first-world economic standards.
- • Nickel prices will remain at unfavourable levels because of the poor global economic outlook. We think that the best of the China commodity boom has passed.
- • The Chinese supply of nickel pig iron has been a fundamental change for the market, resulting in a virtually unlimited supply of marginal-cost nickel. Nickel pig iron represents a significant, low-capital new source of supply. It caps upside in the nickel price. Western Areas is a single-commodity miner.
- • Cash costs will rise as mined grades decline towards the approximately 4% reserve grade. Increasing mining depth with time is also a force for higher unit costs.
- • Reserve life is relatively short, at about seven years. This means the company's cost position is unsustainable, and with the clock ticking on reserves, management may be pressured into a mistake in capital allocation.
- • Conversion of resources to reserves carries some risk, as does the requirement to make new discoveries as the high-grade Flying Fox and Spotted Quoll mines deplete.
- Forums
- ASX - By Stock
- WSA
- Stock Levels
Stock Levels, page-37
-
- There are more pages in this discussion • 14 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add WSA (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
LPM
LITHIUM PLUS MINERALS LTD.
Simon Kidston, Non--Executive Director
Simon Kidston
Non--Executive Director
SPONSORED BY The Market Online