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Some of the sulphide producers are looking pretty attractive at these levels in my view, so starting to do a bit of homework for the watchlist


The laterite miners with their higher capex & opex should provide a decent buffer for the sulphide producers. Can't see anyone planning a new HPAL at these sort of Ni prices....



MCR, PAN, ALB & IGO are down 70-80% over the last year!


This report makes a good list of the sulphide miners



Just having an initial look, MCR & PAN have about $100M in cash each & market caps not much over $200m

MBN also has a very good deposit, but not in production for another year


Any preferences in terms of the sulphide miners?



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In reply to: 328jet on Tuesday 07/10/08 05:57pm

Hi 328.


That report was worth reading.

Interesting to see MCR included in the possible takeover targets. I'd always assumed that because their production is contracted to BHP, no-one else would be interested in them and that it wasn't "necessary" for BHP to secure the metal via takeover. Thinking through it, though, I guess MCR becomes attractive to a number of companies, if it becomes cheap enough.

I'm holding MCR and PAN and have been tempted to add some more, recently. I'm put off by the price of Ni, the world economic situation and the bear market generally. I'm still tempted but don't see any hurry to buy unless/until we see signs of corporate activity.







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In reply to: macduffy on Wednesday 08/10/08 05:51am

Am watching Ni with the hope of catching the next uptrend, whenever that might be. This could happen if the current recession doesn't pan out as bad as anticipated and China etc continue to power along at a decent pace. This would lift all boats, i.e both the laterite and sulphide producers you would imagine. However WSA would be my pick.

What are other investors looking at to try and pick the upturn should it occur? LME stocks? They look pretty healthy now from an historical perspective. cheers 2bs


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QUOTE (Twobees @ Wednesday 15/10/08 12:01pm)

Hi Twobees,


WSA looks like a great pick, especially considering the weakness of the Aussie dollar and their monster grades. I'm sticking to the sulphide producers with low cash costs and high grade deposits. A few off the top of my head are MCR, IGO & PAN.


ALB looks especially underpriced to my eyes, but operates in a higher risk environment (producing in Zambia); they seem to have a good mix of production and exploration and are in JV with BHP in Tanzania. They've got very little debt having now closed out their hedgebook, and are still making money over fist with cash costs of $2.50/lb.


I reckon we might see nickel stabilise around the $5/lb mark, which will probably make a few laterite deposits uneconomical to produce; I wouldn't expect a bounce until we start seeing the nickel stock beginning to fall a little from its recent highs.

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In reply to: ead83 on Thursday 16/10/08 04:57pm

ALB: I wonder whether they are more exposed to $USD based costs than a Australian based producer.


Giving their hedging and their extremely good project delivery to date, low cash costs (and good by-product credits) I still like ALB although don't hold.

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In reply to: denpal on Thursday 16/10/08 05:22pm

Hi denpal,


Imho the best pick for Nickel would be WSA who can produce Ni at a cost around the US$1.50/lb and remember WSA in australia with low political risk attached.


Also its a fast growing company with heaps of cash in the bank and will be producing 30000 tonnes by 2010 I think it was.


So do your own research but if you do believe in Ni coming back then WSA is a no brainer. They even talk about paying their first dividend early next year with the current low Ni prices and that should give you enough evidence that we are not talking about a loss making Ni producer.


Good luck



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I've just had a look at a chart comparing the SP's of WSA, MCR and PAN for the last 12 months. On a percentage basis WSA is down 20% but the established, profitable nickel miners MCR and PAN are down around 75%!

I hold both MCR and PAN but they still look like the best Ni buys to me!





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