MCR looking oversold at 70cent sp.My estimate is FY2005 EPS of 10cps-plus based on Dec half eps of 5.2cps(4500 tn Ni in concentrate) and MCR’s forecast FY production of 10000tns Ni metal in concentrate.Additional production from Mariners will more than compensate for lower grades at Miitel.Second half will also benefit from lower costs due to completion of onsite employee accommodation and end of development expenditure phase.Recent broker forecasts of EPS 12 cps use approx US$6 nickel price.Current price US$7.50+.It looks even cheaper at FY2006 production forecast of 15000tns Ni. Market has factored in a significant drop in Ni prices which arguably will not happen because increasing demand from China will compensate for falling demand from Eurozone. Wildcard upside could come from current drilling programme in the form of new Ni/Gold strikes and reserves upgrade.Currently 10mil in the bank and no debt. In this nervous market the stock could easily fall further.Please do your own research.I hold MCR
MCR Price at posting:
0.0¢ Sentiment: None Disclosure: Held
