Low nickel price - But will it continue to be at these record low, the market analyst don't think so, my view is it wouldn't given if China goes into recession government usually spend on infrastructure and the Chinese government have a lot of capital and cash. There was an article on the market a few weeks ago that said the government got back 1B USD (I think) from the councils because they weren't spending on infrastructure project and another article that says China economy isn't as bad as the market thinks. Plus there is the emergence of India.
No mining licence - They are still mining aren't they and from memory the license has already expired and they got an extension from government, given the state of their economy I doubt they want 600-800 people unemployed.
The mine never produce a profitable qtr since it opening - they did in Q1 (read my other post)
Low grade with probable reserve - But it's a good nickel ratio for producing pig iron, .50% is low but not as low compared to the .2% from the Philippines (which is used in pig iron)
Sovereign risk is high with rapid deterioration of real - REAL devalue has what aided MBN getting their COP including royalty down to 5.23US/lb in Q1 using a REAL exchange of 2.86 to 4.72US/lb in Q2 using a REAL exchange of 3.07. I think this is a very important asset for MBN given the current record low nickel price, there was an article that says the REAL could devalue as close to 6USD, I think that is way overestimate but 4.5USD is more achievable and likely the REAL true baseline value for 2+ years resulting in a total COP of 3-3.5US/lb (having said that it could peak to 6USD.........)
No offtake - None that has been released to the market currently for 2016........
MBN Price at posting:
8.3¢ Sentiment: Hold Disclosure: Held
