ferrets stock to watch: minara resources ltd

Ferret's Stock to Watch: MINARA RESOURCES LIMITED
08:29, Monday, 15 January 2007

AUSTRALIA'S SECOND BIGGEST NICKEL MINE PRODUCES AS EXPECTED

Sydney - Monday - January 15: (RWE Aust Business News)
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OVERVIEW
********

Shareholders of Minara Resources (ASX:MRE) should have been
delighted by production figures released on Friday for the December
quarter.

Output of 8,262 tonnes of nickel packaged and 616 tonnes of
cobalt packaged was achieved in the last quarter of the calendar year.

The company's share is 60 per cent.

The acid plant shutdown scheduled for April was brought forward
and outstanding maintenance issues were successfully completed over the
12-day shut during the quarter.

With the exception of the shut, a steady production profile of
approximately 100 tonne per day rate was maintained by the plant
throughout the quarter and a record second half production of 17,464
tonnes was achieved.

Production for 2007 has commenced well with no significant
interruptions to plant throughput.

Significant events
******************

* Consistent production of 8,262 tonnes for the quarter;

* Record production for the final six months of 17,464 tonnes;

* Acid plant shutdown brought forward from April and
successfully completed;

* Cash on hand of approximately $310 million;

* Strong nickel market continues;

* Commissioning has commenced for heap leach demonstration
plant.

Contingency measures that have been undertaken over the past two
years meant that heavy rain in early January caused minimal disruption
to mining and had no impact on plant production.

During the quarter mine output remained steady, with a mill feed
of 764,696 tonnes, grading 1.36 per cent Ni.

The production forecast for 2007 is estimated to be in the range
of 32,000 to 35,000 tonnes of nickel.

This takes into account the major planned maintenance shutdown
scheduled for October/November and subsequent start up.

The 12-month rolling average lost time injury frequency rate and
disabling injury frequency rates decreased during the quarter.
Significant management focus has been placed on personal risk assessment
to reduce the injury rate and to improve hazard identification and
control.

There were no significant environmental issues during the
quarter.

However, there was a minor incident involving an acid spill
which was contained on the plant site and subsequently cleaned up.

Minara has joined a number of diverse Australian corporations in
the Australian Government's Greenhouse Challenge Plus program, aimed at
reducing greenhouse gas emissions through improved energy efficiency.

This voluntary commitment encourages industry partners to become
more greenhouse friendly, while making their operations more efficient
through new shared research and development.

On December 14, in an interview with Corporatefile, CEO Peter
Johnston said, "We sometimes forget that Minara has a very large
resource base.

"On Murrin Murrin's existing tenements we have a resource of
over 300 million tonnes of laterites with a further large resource at Mt
Margaret which has not yet been brought into production.

"At the current production levels we have an operating life of
over 30 years.

"If the heap leach program is successful this will enable us
to better utilise the resource base at Murrin Murrin by targeting the
medium and low grade reserves," he said.

"We have three joint venture programs with junior explorers, but
to date we have had limited success.

"We will continue our strategy of partnering junior companies to
explore for both nickel sulphides and laterites.

"We have capacity at the back-end of our plant to treat
sulphides and there are lots of opportunities in this area."

However, nickel exploration takes time and patience and the
company will continue to fund exploration programs into the future, Mr
Johnston declared.

SHARE PRICE MOVEMENTS
*********************

Shares of Minara rose 14c to $5.69 on Friday. Rolling high for
the year is $6.66 and low $1.81. Dividend is 17.5c to yield 3.08 per
cent. EPS is 26.95c while the price/earnings ratio is 21.11. The company
has 465 million shares on issue with a market cap of $2.6 billion.

Back to the latest report, the company said commissioning of the
200,000 tpa heap leach demonstration plant is underway with the
beginning of the ore stacking program.

The company expects the first nickel from its scats stockpile to
return to the process plant in March and the first nickel from nickel ore
in July.

Minara anticipates that, if successful, the demonstration plant
will produce at rates of 2,000 tonnes of nickel metal and 150 tonnes of
cobalt metal per annum by the end of 2007.

The heap leach project delivers a second, independent nickel
stream and will further utilise the plant's refining area.

Minara is currently conducting several feasibility studies to
expand the heap leach plant in the event that the demonstration phase is
successful.

Minara's sales position remains unhedged, which has allowed the
company to take advantage of the ongoing strong nickel market.

As a result, Minara increased its cash on hand at the end of
December, after payment of the September dividend, to approximately $310
million.

Meanwhile on work on the Grey Mare bore field is expected to be
completed in February at a capital cost of $70 million.

This will provide a third water supply source for the Murrin
Murrin operations.

BACKGROUND
**********

Minara Resources Ltd is Western Australia's second largest
nickel producer, and one of the top ten in the world, with headquarters
in Perth.

Incorporated in 1993, Minara Resources (formerly Anaconda Nickel
Ltd) listed on the Australian Stock Exchange in 1994 and operates the
Murrin Murrin nickel cobalt joint venture project (60pc Minara, 40pc
Glencore International AG) near Leonora in Western Australia's historic
northern goldfields region.

Minara Resources employs about 1,000 employees and contractors
at its Murrin Murrin operations, making it one of the largest single
site employers in Western Australia.

The Murrin Murrin nickel-cobalt operation is located between
Leonora and Laverton in the northeastern goldfields of Western
Australia.

It is a joint venture between Murrin Murrin Holdings Pty Ltd, a
wholly owned subsidiary of Minara Resources Ltd (60pc) and Glenmurrin Pty
Ltd, a wholly owned subsidiary of Glencore International AG (40pc).

Operations commenced in 1999 and are based on the mining and
processing of lateritic ore.

Conventional open pit mining techniques are used, followed by
ore processing comprising pressure acid leaching, mixed sulphide
precipitation, cobalt refining and nickel refining.

The production process also produces ammonium sulphate as a
by-product, which is sold to the Western Australian fertiliser market.

Production in 2005 was 28,240 tonnes of nickel and 1,750 tonnes
of cobalt.

At nameplate capacity, Murrin Murrin will produce 40,000 tonnes
per annum of nickel and 2,500 tonnes per annum of cobalt.

At the end of 2005, the Murrin Murrin project had total
resources of 334 million tonnes total reserves of 145 million tonnes.

Based on these estimations, the project has sufficient ore for
the next 40 years of operation.

A business improvement program commenced during 2005, designed
to assist the operations management to focus on safety, production and
costs.

The program continues to show positive benefits including cost
reductions and productivity improvements.

Through its research and development program, Minara aims to use
technological improvements and engineering solutions to improve plant
reliability and throughput and to increase nickel and cobalt production
levels.

This includes a project researching heap leaching technology
that offers the opportunity to exploit low-grade ores in a cost-effective
manner and which will deliver a second, independent nickel stream further
utilising the plant's refining area.

Construction of a 200,000 tonnes per annum heap leach
demonstration has recently been completed.

The company anticipates that when operational it will produce
approximately 2,000 tonnes of nickel metal and 150 tonnes of cobalt metal
per annum by the end of 2007.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.