been watching MCR from afar for over a decade now but always went with other Ni co's - however, been FOMOing with cheap Long buy, BHP deal and each Cassini hit and resource upgrade lately so got in at the Cr price yesterday - happy to be on par with some heavy hitters
Barry Fitzgerald article today -
The notion that the junior mining and exploration sector has lost out to the cannabis and tech sectors in the competition for the speculative investment dollar – and that there is no coming back – has been shot down in recent days.
Big capital raisings in comparison to market caps have been popping up across the junior space and outside of gold, it has been kind of unusual because as yet, there has not been much in the way of support from commodity prices.
But this is not a call that there is a boom on with spec money flooding back in to the junior space as a punt that the cashflow joy being experienced by the major miners from their iron ore heavy portfolios is somehow going to wash down in to the junior space.
It’s not a boom call because the capital raisings that are getting away are doing so because they are for well understood and quality plays where there is a clear expectation of there being leverage to the upside, with or without the help of commodity prices, although that would be nice.
Juniors that can’t tell such stories will continue to struggle, and rightly so.
Making the case this week are three examples across three different commodities in three different parts of the world and at three different scales – Mincor’s (MCR) $35 million raising, ioneer’s (INR) $40m raising, and Meteoric’s $7m raising.
MINCOR (MCR):
Mincor’s lightly discounted 60c-a-share placement was notable on a couple of fronts, not the least of which was Andrew Forrest’s privately-held Minderoo putting up its hand for $7.2m of the stock to take its previously non-disclosed stake to 6.17%.
Independence Group (IGO), which had previously sold the mothballed Long mine at Kambalda to Mincor, put up its hand for $2m of stock, taking it to 4.41%.
The placement is being followed by a $5m share purchase plan, with the $35m in total to fund early work on Mincor re-establishing itself as a producer of sulphide nickel from its portfolio of Kambalda mines/deposits.
The timing of the capital raising was notable too in that instead of waiting as most would have until the release of its definitive feasibility study in the March quarter next year as a prelude to financing talks, Mincor decided to get ahead of the curve.
“We will be able to be in a much stronger position to negotiate a competitive funding package and expect to be in a position to move seamlessly from the DFS through to a formal decision to mine without delay,” Mincor MD David Southam said.
Mincor’s Kambalda portfolio now includes the Cassini discovery where the resource was recently increased to 50,400t of nickel. It’s a lot of high-grade nickel ($A1.04 billion in-situ) and the expectation is that there is a lot more to come.
That in-situ value – which really should be ignored - is based on nickel’s latest price of $US6.49/lb. That is down by 23% from the peak this year of $US8.44/lb in early September.
So clearly, subscribers to the raising, including Forrest, are believers in the thematic that there will be a shortage of the preferred nickel sulphide to meet the growing demand for the increasingly nickel dense lithium-ion batteries needed to power the EV revolution.
Batteries are currently just a sub-set of nickel demand, which stainless steel currently dominates. But the EV revolution and the battery storage of renewable energy is a fast-growing additional market for the metal.
