Target $0.60 (was $0.65). June quarter production missed Macquarie by 17%, with poor ore quality impacting on both grades and recoveries. Cash costs did come in a little better than hoped at least.
The result sees some cuts to forecasts, but the Neutral call is otherwise maintained, the broker believing current work to lower mining costs and to improve plant throughput and recoveries should start bearing fruit in the second half of the year, which in turn should see the company cash flow positive again in FY14. In the meantime, leverage to a rising nickel price is significant.
MBN Price at posting:
8.3¢ Sentiment: Buy Disclosure: Held
