What will IGO do re the MCR takeoever bid?, page-18

Bluesky

No sure you”ll regret.

I had a knee jerk impulse to top up heavily on PAN after the AF action at MCR on account it was probably the next best thing in nickel, but I am still wary. It has a very long road to go with the ramp up, and unless the nickel price lifts greatly again will still be struggling for at least the rest of this CY to make any meaningful headway with debt repayment. If the nickel price takes a further tumble or something goes wrong more equity may be needed, as indeed imo if the RCF cannot be extended or replaced. Debt from someone other than Trafigura likely to come with a lot more strings, cost, covenants and/or hedging.

I also don’t see PAN in the same space as MCR. Logistics and the nature of the concentrate (only 7% Ni and being a mixed metal concentrate) means that really the only likely option is continued shipment to Asian smelters. It’s hardly going to be shipped to Kalgoorlie is it? And imho unlikely to be shipped to Kwinana or anywhere for any possible future processing in WA if AF and/or IGO get something new up and running???

In the big picture it seems an isolated standalone operation, with the need for a major nearby discovery to change that.

I am no expert but just my thoughts.

For me to up my stake in PAN I need to see it closer to coming off the cashflow treadmill, FY24 still looks moderately risky for PAN imho.

If both MCR and PAN perform to plan then on a good day I see PAN worth about half what MCR is, and one a really bad day a small fraction of it. In the case MCR this “plan” includes exploration success more than doubling current mining inventory, but this imho is likely from Cassini alone.

EL