Following the latest quarterly update I've done an introductory post on a UK shares board. I'm no mining expert, so I'd be grateful for comments and corrections from other holders.
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I have a small investment in this, and as I know I'm a mining novice I's be grateful for more informed comments. I'm wondering whether to stick or add.
Nickel miner Western Areas has just produced its quarterly activities report. It's not on their website yet - http://www.westernareas.com.au/ - but can be accessed at http://tinyurl.com/yupl3x .
Market cap is shown as A$630m undiluted. The Flying Fox mineral resource is reported as exceeding 90,000 tonnes contained nickel. The indicated mineral resources are c. 77,590 tonnes of nickel, the inferred just under 13,000.
If my sums are right - and that's always worth checking - that's about £2,800 a tonne. Today's FT reports nickel at US$37,400 a tonne even after strike action was averted at Xstrata's Sudbury mine, saying that "price action continues to be dominated by the crucially low level of nickel stocks, down 144 tonnes yesterday".
Taking that price as a snapshot suggests market cap around 15% of resources at Flying Fox, which feels comfortable.
They've started producing there. Only 2,100 tonnes of nickel remain hedged, against 2007-8 production, and the first 6 months' production is unhedged.
At the separate Diggers South deposit the pre-feasibility study is due for completion in April. WSA report that "Diggers South contains approximately 30,500 tonnes of contained nickel with the majority in the high confidence Indicated Mineral Resource category".
There are a couple of other Australian nickel projects, which are at an early stage.
WSA is also quoted but very lightly traded in Canada (TSE:WSA) and has take a 13% stake in Mustang Minerals there. Their inferred mineral resource at Maskwa suggests an inferred mineral resource of 58,000 tonnes of contained nickel plus some copper.
The company seem vigorous. They say they see "a significant opportunity to quickly move up the ranks in the Canadian resources market and within its increasingly international peer group".
Comments welcome.
WSA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
