PAN is in a strong position, though having fairly average production costs makes it vulnerable. It's not only below NTA now, but below cash and receivables - the market expects it to make a loss in the coming years.
I posted recently as long as nickel is above $5/lb it's all pretty smooth sailing. Nickel prices were at around US$7.50/lb at the time, already at the marginal cost of production for many miners. At $4.20/lb it is well below the cost of production (possibly also for low cost producers). At these levels the loss on production that wasn't hedged begins to eat into profits. Would be nice if they could reduce production to meet hedging commitments only...
It seems many miners are overly resistant to the idea of scaling back operations, they will allow themselves to go to the wall before reducing (or stopping) output. Sure it might cost a lot, but the worst that can happen is prices recover and they miss an opportunity to cash in. The best that can happen is prices remain at these levels, and they live to fight another day.
I think the latest announcement indicated the hedge at $80m in the money.
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