re: Ann: Market Update - Operations and Produ...
My initial impression was to offload about 2/3 of my holding.
MCR problem for the last year or so is that it isn't producing enough Nickel. This can't help. Nearly 1/4 of last quarter's production was from Otter Juan and it looks to their highest grade. There is a lot of overhead and exploration to cover and they are not producing enough right now to do it.
On the other hand, I think that if they can replace some of their production then the SP is a bit low. Once you take way the cash, the SP is too low if producing 10,000 Tpa and much too low if they eventually return to 15,000+.
And it doesn't look like any of the exploration potential is factored in plus the fact they have enough cash to get new projects into production without having to raise very much (if any) additional cash.
I still value this company and will look to add back to my holding once the dust starts to settle. I think the market will over react and I may be able to buy back in the mid 1.20s. If not, I'd be happy to add back at the current price.
Let's wait and see what the exploration update brings.
MCR Price at posting:
$1.34 Sentiment: None Disclosure: Held
