Ann: Quarterly Activities Report, page-25

So according to some reports there may be around 40 job losses. Similar to when they went to one shift (40 jobs lost) which racked up $1.8m in redundancy payments. So presumably a similar amount of say $2m.

Wind down of operations will also entail further ongoing operating losses. Total operating deficit was $3m in the last quart for a full quarter. Given a period of no mining whilst they clean up etc, it may come in at around $3m again for the quart.

Head office was $800k last quarter. Expect some job losses there also and reduction in overheads to maybe $500k per quart. Lease payments will stay the same at $1.1m per quart. Exploration and feas studies will probably be around $300k per quart. Add to that the ongoing costs of C&M (skeleton staff, power etc...) and MCR could still be looking at $2.5m-$3m per quart cash outflows whilst in C&M together with one-off costs of $5m or so whilst going into C&M.

No forward contracts to close out that I am aware of.

Anyone got anything to add to this?

Net working capital of $20m at end of the quarter (Dec 31), say $15m if they are lucky after C&M costs.

So enough for 4-5 quarters.

Then there are the restart costs, although one imagines debt will take care of a big chunk of that.

MCR´s proud claim to have only done one cap raising since listing is going to come under serious strain.

MCR´s best hope is to hope that there is a turnaround in the nickel price in the next 6 months and to do a cap raising on the up as interest returns to nickel stocks and propels MCR´s SP back up.

There are not a lot of mid-tiers with the cash on their books that could launch a takeover. A script for script merger with PAN would be horrid given both may not have enough cash to get through the downturn, it would just result in a bigger distressed company.

WSA don´t have a lot of cash, but their script is still up so they could make a move.

I wouldn´t put it past MGX to run the ruler over MCR and PAN. They have loads of cash and iron ore assets that have a very bleak medium term outlook. They have also stated that they are on the hunt for NON iron ore assets.

OZL have $500m+. Not sure MCR is big enough for them, although they may see potential in Savannah North (PAN) which is probably only 20-30% drilled out.

Private equity may soon be making a move back into some resource stocks this year IMO.

PAN would be a priority target over MCR imo given both have similar values at the moment and PAN´s Savannah North (only 30% drilled but already over 100kt Ni) looks to be superior to any of MCR´s deposits. But both are likely to be attractive.

Nickel should rebound this year, even the very bearish MacBank think it will be one of the first to rebound given suppliers are cutting back a lot at the moment. Its a bit of a tightrope until then and MCR (and PAN) are vulnerable fish.

MCR won´t go into admin (no real debt to speak of either). The risk is a dilutionary cap raise, although I have confidence that the Board has the record and strength to avoid such a cap raise and, worse case scenario, they may do a small raise to get through a prolonged downturn and wait for the nickel price to increase, share price to rebound before raising again to restart operations.

The small to no risk of going into admin also means that any acquirer may act sooner rather than later (i.e. if waiting to pick the assets of an administrator is not an option).

Thoughts?