Signature,Hope you are NOT counting on too much profit atm from...

Signature,

Hope you are NOT counting on too much profit atm from MCR.

With pon hovering around A$9, MCR's cash costs around $6, total probably well over $7/lb I don't see too much margin.

Let's say 20,000 tpa Ni in ore, approx 26 mm lb payable. At A$2/lb margin that is A$36mm pa NPAT, or 18 cps. Considering the risk of that margin being squeezed further I would not get too excited. A $/lb swing in the pon at these levels has huge impact on MCR profitability.

In this market, I prefer the higher margin plays, eg IGO or better WSA if it get's cheap enough.

Warren Buffet looks for sustainable and defendable margins. I am therefore certain that if he was investing in the nickel space he'd be attracted to WSA, but avoid MCR like the plague.

I actually have great respect for Moore, and believe MCR will grow over the years in line with it's track record, however one or two tough years would not suprise me - the price you pay in a downturn for being a high volume, low margin player. MCR will shine again when this market has killed the supply response that should have occurred - I however am not that patient atm.

However please DYOR and ignore me, I have been wrong on nearly every stock I have touched all year.

EL