Gonna put my 10c into the ring Yes 2012 will see supply outstrip demand by 10000t But the three big projects that come on line Vales Giro Mine in New Caledonia, Sherritts Ambatovy project in madagascar and the sumitomos phillipines project to the western japan projects All touted for mid 2013 but all have been plagued with delays and the dates are not guaranteed. Ask Lynas about delays, they have one after the other. Remember a lot can happen till 2018, if they can generate $6 -12 per pound profit after operating costs based on a pure nickel average of approx 5000t, per quarter. Its 66 million per quarter. Even if they use 30million of this profit, they would have this debt paid off in 12 - 13 quarter. Tighter operations, better budget constaints and consistent supply to clients this company will achieve better results.
It is a high yield mine where they have to shift lots of dirt to find the nickel but it is processed and shiped all from brazil reducing logistics. It is an established mine and is still developing its operations. It still is techniqually in its infancy. This year it will amp up full operations, where they will benefit and have buyers of their mineral. I can understand why this company may be a target, and everyday it goes cheaper it becomes more inticing to players wanting to buy an established operation with continued mineral for the next 22 years. Whether todays levels is a good buy will be based on the full general market sentiment especially as the euro problems get into full swing. The funding will prepare the through the tough period that might happen this year. there cash position is still satisfactory but possibly next year a cap raise may be needed but by that point it could be back above $2. Why would they have a cap raise as these levels, especially considering that they have good gearing position to weather the debt storm of 2012. I can appreciate everyone's losses. In fact I was surprised that it went even lower from a buy of 1.10s. But I believe that Mbn is oversold at this point in time. Nickel is still a good price, they have a reasonably good financial position and there have been rumours of interested parties. I can also understand your frustration but you simply need patience. Things will work out. Just me thinking out loud.
MBN Price at posting:
$1.01 Sentiment: Hold Disclosure: Held
