Australia's largest stock trading and investment forum Australia's #1 stock forum

MCR

Click for more information

0.52%

96.5¢ mincor resources nl

" With all of the nickel mines allowed to flood in the Kambalda...

First 13 Last

Share
Profile

Follow
groundzero

29,081 Posts.

45

08/05/17

22:33

Post #: 24555549
Share

Originally posted by Hugoagogo16 ↑

Hi Kip

From Mincors latest presentation they have defined a gold resource of some say 800,000 oz of gold on their Widgiemootha ground. According to Mincor they need to open up multiple pits with an average grade of over 2g/t. The PFS suggests the max cash drawdown is $7M. They have $13M in the bank and no debt as far as I know. The cash costs are estimated at $1120/oz and has an NPV of $25M. A favourable ROI. They don't plan to install a plant so you will find they have their ore toll treated. There are a couple of places I am aware of the FMR mill up the road and SKM which Royal Nickel just did a deal with. I think there is another mill down the road but I forget the name. The problem with toll treatment is if the mill is full they only pay you on a displaced recovered gold head grade.

I guess they are focussed on gold because the nickel market remains depressed. As I understand they have stopped dewatering and allowed their nickel mines to flood due to the cost of dewatering from over 1100m below surface.

Mincor historically has been a pure nickel play and have an operating history. Even with their focus turning to gold I still see them as a nickel company. My point is with Long closing the Kambalda concentrator owned and operated by BHP has no or little feed. Unless someone else comes on line it will be forced to shutdown and go into care and maintenance. With all of the nickel mines allowed to flood in the Kambalda region turning the mines back on is not a simple process. It will take time and money. If the nickel market remains depressed what will the future of Kambalda look like? There are clearly all sorts of possibilities BHP may reinvent the concentrator as a gold processing facility however that will take a capital injection and is therefore unlikely. BHP could to sell the concentrator but because it is so strategic that is also unlikely.

I guess the likely outcome is more of the same which is they go C&M the mines stay flooded and everyone waits for the nickel market to improve. Which sucks really for Kambalda. This is a classic example of where business and governments should get together to work out how to become more profitable in a collaborative way. Personally if the nickel market does not improve soon I think the Australian nickel industry is under threat. Nickel companies on C&M Yabulu, Panoramic, Mincor, Poseidon, Talisman (Sinclair), WSA (Cosmos), RNC or Salt Lake (Beta Hunt). RNO and Murrin must be marginal. Only remaining companies Nova (IGO), WSA and BHP.

With companies talking about cobalt the challenge is most cobalt is a byproduct of nickel and copper. I am trying to keep an open mind on this but I am certainly struggling to understand why the market doesn't get it. Most of the cobalt plays will never get off the ground as they are simply not viable. When you do the maths they look ugly. They are capital intensive have high operating costs and cobalt is a byproduct as nickel or copper are the main metals in most orebodies.

What is interesting is the shift to produce nickel and cobalt salts as they are attracting a premium to the LME. I think WSA hinted they were looking at this as they have their bio tank leach operational. I also think BHP is looking at this as are most of the cobalt hopefuls. Not surprised at $55k/t it is aThis is all driven by the emerging EV market and therefor the need for batteries. Anyway Kip sorry to write such a long response to a very reasonable question.

Expand

" With all of the nickel mines allowed to flood in the Kambalda region turning the mines back on is not a simple process. It will take time and money."

Yes, and no one will start dewatering on a spike in the price of nickel. The price will have to be up and holding, with positive forward price projection for the future.
Its not just the water..... all electrical wiring,lighting, switchboards, timbers, will have to be repaired, plumbing for water, compressed air......gonna cost squillions $$$.
No one will just rush in and commit financial suicide.

GZ

MCR Price at posting: 16.0¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

Reply

Top Stories

AN1

CuFe sells its Crossroads gold royalty to Northern Star for $4M cash; says better than waiting for mine launch

GRL

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

Week 46 Wrap: Copper hits 2mth low as Trump threatens net zero pace; US rally fades; HotCopper’s picks

EDE

NT Gov't delivers environmental approval for Empire Energy's Beetaloo Carpentaria pilot gas play

LYN

InhaleRX gains approval for clinical trial to test non-opioid therapy for cancer pain

ME1

Banshee's historic trenches prove rich in antimony and gold for GDM

BNL

Blue Star Helium sees approval for five more wells at 'Galactica/Pegasus' project in Colorado

HotCopper Highlights: Your most watched stocks for Week 46, 2024

AUN

Cyclone signs MOU with Vale for development of Iron Bear play

BTH

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

There are more pages in this discussion • 78 more messages in this thread...

First 13 Last

Add MCR (ASX) to my watchlist