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8.3¢ mirabela nickel limited

Ann: Extension of convening period for creditors' meeting, page-212

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user23

3,914 Posts.

21/01/16

14:08

Post #: 16841995
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Originally posted by tomboy ↑

Q2
BRL of 3.07 COP of 4.49 NP of 5.40

Now
BRL of 4.105 and dropping fast, NP 3.87

gross calculations of COP based on BRL drop which is 95% of all MBN expenses
4.105-3.07 = 1.035/3.07 = 0.3357 - 1 = 66.29%

4.49 x 0.6629 = $2.976 uslb COP now
NP 3.87
On top of this gross COP is the other reductions in expenses
Staff wages slashed 33%, stockpiles usage slashed COP by 50%, admin savings 20%

MBN COP must be around 2.80 right now
MBN using stockpiles rather than new mining, its COP on those stockpiles would drop to 2.07 (posted before) say 30% of production.

In 2000 Sydney Olympics, AUS$ went from 69c to 45c in months to when the Olympics started
Now Brasil Rio Olympics starting June 2016, expect BRL to do the same 4.10 to 4.50 by June.
Brasil central bank is doing QE & not defending the currency, a sure way for further BRL devaluation to 4.50-5.00.

Norilsk is reducing as well, chinese have slashed NPI production. New Caledonia NI ore will reduce as well with less QN refining.

Votorantim is a refinery like at Yabulu of Queensland Nickel, they refine and buy Ni as offtake like they did with MBN which they breached in 2013 that caused the first VA. They then onsell the metal to steel mills like the chinese. They still have an ongoing court case with MBN over their offtake breach so looks like if judgement is given they may have no way of satisfying judgment other than to hand control & the keys over to MBN.

Votorantim shutdown is good for MBN, it competes with MBN for steel mill product, with this competitor gone and Vale shutdown of onca puma, MBN is THE largest NI producer in brasil at the lowest cost globally and the only brasil Ni supplier to steel mills.

Brasil has massive production of IO/steel products through Vale... it cannot do without any Ni in Brasil. Imagine the cost of having to import NI to Brasil!

BRL at 4.105 soon 4.50
MBN COP at 2.80 soon even lower toward 2.50
NP at 3.87 headed to 4.50 again soon
global producers shuttering

MBN doesnt need $1 for 2 years now. VA stated it has "sufficient liquidity for the forseeable future" contradicting the former Board & Griffiths. Its protecting its shares from cheap accumulation and a cheap takeover. It doesnt need funds so it means the COP is much lower than 3.87 to cover all expenses, admin & capex so must be at most 3.00-3.30.

If COP is actually at 2.80 as I predict, then the profit margin has actually increased from 18% at Q2 to now 27% since the VA and has stayed around 25%-30% since the VA.
Otherwise they would need rescue funds & announce that to the ASX which they havent. Not $1 has been needed as stated correctly in August by the VA.

With a BRL of 4.50 , MBN COP drops to 2.40uslb (gross) on my maths but maybe even lower to 2.20.
With BRL of 5.00, MBN COP drops to 1.67! But even lower say 1.50...incredible.
From the highest cost NI production to the lowest cost in the space of 2 years..incredible.

Expand

Have you gone through the substantial holding and all the changes to substantial holding disclosures released to the ASX after the DOCA.....yet?

They only sold some shares so why not relist if their COP including royalty numbers are that low in the 2.8-3US/lb......nickel investor will be scrambling to buy MBN (and those that hold MBN shares will NOT BE SELLING ANY IF THEIR COP IS THAT LOW!!!!!!) so pps will logically go to the 30s and they can sell at breakeven or minimise their losses OR choose to hold.

This means the logical explanation is they don't mind covering the losses POST CAPEX (which I don't think is that much) with the assistance of the receivers.

MBN Price at posting: 8.3¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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