Chart - MCR, page-861

SB,

The hedges mostly mature over the next couple of quarters, so the natural process will be a fairly quick end to the episode, as discussed in the HY.

The hedges as originally taken might have seemed sensible, as they should have still left some profit, except that the ramp up was late and costs rose dramatically (as the nickel price did but destroying that natural hedge). My disappointment would be that management didn’t reduce/restructure the hedging when they did the CR to restructure/reduce the debt. The former CEO, DS, had a CFO background so easy to see a mining type board chair defer too much to him on financial matters.

Regardless that’s more or less history now. Looking forward I believe MCR is well set up with premier nickel assets to deliver well for a decade plus, and to withstand lower nickel prices than many nickel producers, eg PAN. The nickel price has never been safe to predict, hence my first requirement for a significant nickel investment is a position well down the cost curve. The old MCR mines (that TB bought into going into C&M) would never have attracted my back to MCR, but Cassini does, as does the extension of the lucrative Long complex into the Golden Mile. IGO made so much from the Moran ore body there and through quite modest nickel prices.

EL