excellent buying opportunity!, page-5

macquarie view Nickel Production Downgrade For Mincor
June 14 2005 - Australasian Investment Review – (AIR)

Mincor Resources NL (MCR) has downgraded its FY06 nickel-in-concentrate production forecast by 2kt to 13kt nickel.


Macquarie analysts suggest the downgrade is a result of difficult ground conditions at the Mariners operation which will affect lower than expected production over the next six months, and more generally that management are slowly realising their FY06 15kt forecast would mean stretching the Miitel and Mariners operations for most of the year.

If this were to occur, cost efficiencies achieved over the past 12 months will potentially be lost, Macquarie suggests.

While management is happy its previously downgraded FY05 target of 10kt will be met, Macquarie has responded to the FY06 downgrade by reducing its FY06 earnings forecast by 25%. The 12 month price target falls from 75c to 70c.

Near mine exploration will be a key price determinant for the rest of the year, and the analysts have maintained a Neutral recommendation, but they prefer Jubilee Mines (JBM) for nickel exposure.