For anyone interested, EUROZ Securities has upgraded its rating on the much maligned ANL saying it could represent a value buying opportunity if its share price dropped to 5 cents.
Euroz values the stock at 5.6 cents, based on an annual production of 40,000 t of nickel and a spot nickel price of around US $3.65 /lb. However the broker still sees risk in Anaconda reaching its 40,000 tpa nickel output given its past failures.
Other issues canvassed by Euroz include a future capital consolidation-post the blow-out in issued capital to 6.9 billion shares following the balance sheet restructure - and Glencore's "likely" creep up Anaconda's registry from its current 46.3% interest.
Euroz also believes Anaconda could receive around $60-100 million from its damages claim against Fluor Corp, and that following debt repayments and capex requirements over the next year , dividend payments may be a possibility.
Another point for potential investors to consider is Anaconda's profit sensitivity to production rates and the nickel price - both of which are high.
For example,should Murrin Murrin achieve only 35,000tpa production of nickel, its profit would be $28 million, as compared compared to $64 million at full 40,000t output - and should nickel prices drop to its long term average of US $3.25 /lb, profit would drop to $28 million at full production. Conversely, it would rise to $86 million if nickel traded at US $4.OO /lb.
