Trouble is EPS means nothing if mine life is very short (and FY19 EPS will suck anyway). If you look with a glass half empty view then you are looking at 2 years reserve life at FF and 5 at SQ based on last years production, and you are going to gain no solace from the fact that neither reserves nor resources at either have had much replacement for years. You are going to look at rising costs, and if you are going to look at a bottom line that over the years has not exactly glowed from having two of the best mines in the industry.
That’s the glass half empty view, and it is valid, but there is another view. I have taken the other view, which has much more focus on Odeysseus, some of the best exploration ground in nickel and quite a lot of undeveloped resources.
If people are focussed on the two current mines then they are not going to pay the same as they did three years ago when they have twice the mine life (on reserves basis), assuming the same pon outlook as then.
I can’t see a better priced nickel producer in Australia.
EL
WSA Price at posting:
$2.47 Sentiment: Buy Disclosure: Held
