q report, page-4

From Egoli.......

"Unhedged Mincor misses production targets
27/04/04 By: James Seabrook

Mincor Resources NL (MCR) this afternoon announced that nickel production for the three months ended 31 March 2004 had fallen 8% to 2122 tonnes. The decline in production has pushed the mid-cap nickel miner’s cash costs up 12% to approximately $2.87 per pound.

SHAW Stockbroking’s resource analyst, Mr Andrew Richards said that the production was impacted by manpower shortages at their Miitel and Wannaway assets reflecting high levels of mining activity in the Kambalda area.


“Mincor is actively pursuing both short term and long term solutions,” Mr Richards said.

Despite reduced production, cashflows were strong with operating surpluses before tax of $9.5 million, an increase of 1% reflecting the group’s unhedged status.

Regarding other activities, Mincor has announced the commencement of a new $7 million nickel exploration programme. Thus far, the company had said that they have succeeded in finding intersections of 2.6 metres at 5% nickel and 2.8 metres at 3.5% nickel indicating likely extensions to the ore body.

Exploration drilling is now underway or commencing to north and south of Miitel, at Redross, Jeremy Dee and on the new East Widgie tenements.

The company also advised that the Miitel ore body has been extended by an additional 70 metres of mineralised strike encountered at the north end of Miitel, and Redross is on target for first production September.

“Development of the Redross Nickel Mine continued during the quarter.”

“The establishment of surface infrastructure is almost complete, with the mine offices, workshop and power line operational, and the water disposal pipeline to South Lake Eaton almost complete,” the miner explained.

Commenting on corporate activities, Mincor’s managing director Mr David Moore said that during the quarter the company finalised a security trust structure with three banks, providing the Company with competitive discretionary hedging facilities.

“In addition, Mincor obtained a $10 million revolving corporate debt facility. As of the date of this report, the group had not drawn down on this facility,” Mr Moore said.

In line with its strategy of maintaining maximum exposure to the nickel price while securing a minimum level of protection against adverse price movements, Mincor has sold forward 2,088 tonnes of nickel to March 2006, at an average price of $16,459 per tonne.

“These discretionary forward sales make up less than 15% of FY05 production and less than 5% of FY06 production,” SHAW Stockbroking’s Mr Richards explained.

The group has also outlined that it seeks to double existing ore reserves through extensional exploration of existing ore bodies and discover a new million tonne, high-grade nickel ore body through an expanded regional exploration programme.

By 1445 AEST, Mincor shares had dropped 4c to $0.74."