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ccdavid

2,524 Posts.

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16/05/22

19:48

Post #: 61439766
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Originally posted by ccdavid: ↑

PAN and MCR are both a buy and under valued even at PoN at US$20K/Ton.
Current Market Price PAN at A$553.7 M MCR at A$1,017M
The main difference between the two is the Annual Production Guidance.
PAN Guidance is around 10KT Nickel /annum while MCR at 16KT Nickel/Annum.
MCR will also have a considerable lower AISC being higher grade(3.3%) and its offtaker is
BHP which owns Kambalda Concentrator where MCR Mined Ore is directly trucked to Kambalda.
Even if we say that both AISC around $A6.00/lb,
EBITDA PAN at PoN US$12.5/lb(A17.8/lb) = 10,000T*($17.8-A$6.00)*2204lb/T = A$261 M/Year (12 Yrs = A$3B)
MCR at 16,000T/Annum = 1.6*A$261 = A$418M/Year (8yrs plus) = A$3.3B
Advantage of MCR over PAN,
3.3% Grade means less ore mine to create the same volume of Nickel than PAN at 1.6%.
Offtaker is LOCAL , BHP Kambalda is just 50km from MCR Mine. Ore Direct Trucking
No offshore Shipping.
MCR will prove by Jun Quarter how much it will produce. Concentrate Production started 6 May 2022.
PAN will have to prove it can Deliver 30 KT Concentrates per Quarter by Sept Quarter.
If both can produce as per their Guidance then PAN Market cap can exceed 1 billion
and MCR Market Cap can be 2 Billion. Just my analysis basing on Guidance and Grades.

Expand

I forgot to show PAN advantage over MCR
PAN has a 1Mton / Annum Concentrator
MCR doesn't have a Concentrator
MCR Milling Cost / lb in 2015 is A$1.16/lb and I'm sure it will be way higher now.
PAN have proven production for 2 Quarters now and has improved.(No surprises here)
MCR still to prove production result this Jun Quarter. Could be good or bad.
So in my opinion, PAN is a better bet at this point in time with the sp way too undervalued.
DYOR

Last edited by ccdavid: 16/05/22

PAN Price at posting: 26.5¢ Sentiment: Buy Disclosure: Held
8 Upvote

1 Great analysis

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