ferrets stock to watch: mincor resources nl

Ferrets Stock to Watch: MINCOR RESOURCES NL
09:17, Monday, 27 November 2006

NICKEL STILL A BOOMING OPERATION IN THE KAMBALDA REGION

Sydney - Monday - November 27: (RWE Aust Business News)
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Many years ago the Ferret went down the first Kambalda mine when
it was the jewel in the crown of Western Mining Corporation.

It was a truly astonishing project which at the time was found
more by luck than scientific geology.

A couple of local prospectors were intrigued by all the grey
slate around and decided to have it checked out - discovering it was
nickel.

WMC grabbed the spot with both hands and the rest was history,
except for nearby Lake Lefroy which moved every time the wind changed.

And the other incidental problem was that the original company
had to move the town because it initially finished over the mine.

Today there are two Kambalda towns in opposite directions.

The area is now known as the Kambalda nickel district in WA.

This is the region where Mincor Resources NL (ASX:MCR)
established its profitable nickel operation.

Mincor was listed on the Australian Stock Exchange in July 1997.

The company's core assets are its mines and tenement holdings in
the Kambalda nickel district, where it has been in production since 2001.

Mincor owns and operates the Miitel, Mariners, Redross and
Wannaway nickel mines - all of which are underground nickel sulphide
operations - and is also active in nickel, gold and base metals
exploration throughout Australia.

Miitel is still by far the most significant producer with around
240,000 tonnes ore per annum at an average grade of 2.7pc nickel.

Redross production began in August 2004 and is currently
proceeding at a production rate of approximately 10,000 tonnes per month
at 3.2pc nickel.

Production from Wannaway is starting to wane but is presently
around 3,000 tonnes of ore per month at an average grade of 2.2pc nickel.

Both Mariners and Redross are increasing.

Mariners began production in early 2005, and is currently
producing at a rate of around 10-15,000 tonnes @ 2.2pc nickel.

Ore from Mincor's nickel mines is toll-treated at BHP Billiton's
(Nickel West) Kambalda nickel operations plant.

The resulting concentrate is sold to BHP Billiton via a long-term
off-take agreement.

Mincor's growth strategy is aimed at the creation of a
diversified mining house through a strong focus on growing the company's
successful nickel business while simultaneously expanding its interests
across a wider range of mineral commodities.

As part of this focus, Mincor announced a new growth and
diversification strategy earlier this year designed to broaden its
exploration portfolio and asset base into other commodities and
geographic regions outside of Kambalda, leveraging off the strong cash
flow of its core nickel operations.

Several projects, including gold, copper-gold, tungsten and
uranium prospects, have been acquired and exploration is gathering
momentum, adding further appeal to the company's growth portfolio.

In a visit to the mine last week, chief operating officer Steven
Cowle disclosed the company had $70 million cash in the bank and would
spend more than $12 million in exploration in the current year.

Reinvestment has enabled the company to grow its business which
is a key strategy.

The company has excellent exploration results at Carnilya Hill.

SHARE PRICE MOVEMENTS
*********************

Shares of Mincor rose 9c to $1.95 on Friday. Rolling high for the
year has been $2.40 and low 61.5c, Dividend is 5c and yield 2.56 per
cent. Earnings per share is 15.1c and p/e ratio 12.91. The company has
195 million shares on issue with a market cap of $380.7 million.

At the annual meeting earlier this month, chairman David Humann
told shareholders "the market has not yet fully valued our success to
date and does not appear to recognise the annual increases in our
reserves and resources".

He said that the company met its production targets in 2006 and
in the last three months, with the high spot price for nickel producing
the outstanding results seen in the annual report.

Net profit climbed to $29.3 million for the year to September 30.

The company achieved a strong production record of 3,612 tonnes
of nickel in concentrate in the three months; a record quarterly
operating surplus of $38 million; cash and receivables after allowing for
trade creditors of $69 million; and continuation of its no-debt position.

"I am of the view that total shareholder returns have been
excellent - with more to come," Mr Humann said.

"Further, we are funding out of operating cash flows a truly
impressive mine development and near mine, brownfields and greenfields
exploration program."

He attributed skilled management and execution of mining plans
at Miitel, Redross, Mariners and Wannaway with excellent production
results.

The company has achieved strong regional exploration success
including the potential to replicate an ore body similar to the original
high grade Carnilya Hill orebody.

There is likely to be possible extensions of the Wannaway and
Redross Mines.

And a further re-emphasised Australia-wide gold and base metals
exploration program.

Prospects include tungsten, gold, copper, uranium and zinc.

Mincor's exploration budget has been raised 50 per cent to $12
million in the current financial year, from $8 million in 2005.

"After more than five years of mining, we have a substantially
stronger overall Reserves and Resources position than when we first
started operations," Mr Humann told shareholders.

"In a snapshot, total mineral reserves are now 2,016,000 tonnes
at 3.8pc nickel for 75,830 tonnes of nickel metal - up 15pc. And in
addition, total ore reserves are now 1,668,000 tonnes at 2.7pc nickel
for 44,690 tonnes of nickel metal.

"Our exploration and mine extension program (including the
approved South Miitel extension) is designed to continually replace
and hopefully expand our total resources and reserves," the chairman
declared.

BACKGROUND
**********

Nickel prices have increased dramatically in recent months.

In September 2005 the LME spot price was $US15,000 per tonne of
nickel metal (approximately $18,000), in March 2006 it was slightly
higher but between June and October 31 it increased to $US33,000 per
tonne (approximately $44,000).

The spot price has remained strong to this date and the chairman
believes that it will continue to be strong.

Nickel stockpiles are low, production has risen and demand
remains high.

This represents a new plateau of price and demand.

It is not a boom in the sense of last century's boom-and-bust
cycle.

The world has never been more prosperous and products
containing nickel comprise essential elements of the durable goods
markets - that is, all things made of steel.

Mincor receives 65 per cent of the metal value from its
processing arrangements with BHP Billiton, which provide an essential
service in concentrating and smelting our ore.

The residential camp at Lake Eaton near the mine is a new
first-class facility and includes an excellent standard of accommodation,
cuisine and a range of sporting facilities.

The company has donated a total of $800,000 towards the
construction of a new civic centre in Kambalda and other civic
improvements.

ENDS

Copyright © 2006 RWE Australian Business News. All rights reserved.