mincor steaming ahead

The following article from Kitco basemetals

Mincor Resources NL has forecast a significant increase in nickel production over the next two years after today announcing a 24 percent increase in net annual profit to $11.3 million, enabling it to declare its second successive fully franked 1.5 cents per share dividend.

The Perth-based company also said it was well placed to take advantage of the strong nickel market with its third nickel mine, Redross, commencing production this month and a fourth, Mariners, currently under development and set to start production in January 2005.

The new mines will join Mincor’s successful Miitel and Wannaway Nickel Mines as key profit centres for the company in the Kambalda region of Western Australia, underpinning a forecast 30 percent increase in nickel production for the 2004/05 year.

The strong 2003/04 financial result was based on sales revenues of $85.7 million and was achieved despite foregone revenue estimated at $15 million, the result of now-terminated hedging imposed by Mincor’s original bankers, as well as production constraints during the latter half of the year associated with manpower and end-of-contract issues.

The company’s operations produced 330,000 tonnes of ore for 8,679 tonnes of nickel metal in concentrate for the year, at a cash cost of A$3.99 per pound nickel. At the end of the financial year Mincor was in a strong financial position with cash reserves of $9.2 million and no debt.

Mincor managing director David Moore said the company’s focus was on expanding its production base over the next two years while at the same time pursuing aggressive exploration aimed at doubling its reserves.

"The next two years will see Mincor reap the rewards of its very successful Nickel Expansion Strategy, which will enable us to lift production by up to 76 percent based on our existing reserve base," he said.

"At the same time, we are pursuing an intensive exploration program targeting a doubling of reserves through near-mine exploration and the discovery of a million-tonne high-grade nickel ore body. This will provide the impetus for the next quantum leap in growth for Mincor."

Mincor confirmed its target of a 30 percent increase in nickel production for the 2004/5 financial year, to 11,000 tonnes of nickel metal in concentrate, and a further 36 percent increase for the 2005/6 financial year to 15,000 tonnes.

Commenting on the 2003/04 year, Moore said the strong nickel price had attracted new investors to the sector but the associated mining boom had created its own constraints.

"We went on to the front foot in that regard and made some important operational changes – I believe we are now exceptionally well placed to benefit from the strongest nickel prices we have seen for a generation," he said.

- 25 Aug 2004







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