Where does everybody expect nickel prices to be in 1 or 2 years time?
My guess is $25,000-30,000 per tonne assuming a continued global economic recovery.
The current nickel price is similar to the prices of the 1st half of 2006. In that half year Minara did $100m net profit and gave $0.125 dividend.
Their production is similar to 2006 levels and nickel prices are too, so their revenue should be the same but their cost of production is $200m now vs $150m in 2006, so I guess we can only expect $50m profit compared to $100m in 2006 financial year. However if nickel prices rise to $25k or $30k we could see far higher revenue and profit figures.
If the global economy continues to pick up (and nickel prices) I can see a $400m net profit year not far off, maybe 30 June 2011. And a year like that can bring a $0.40 dividend, along with a $3.00 share price.
That is my prediction, but it relies heavily on countries increasing stainless steel production (to drive up nickel prices), which I assume comes hand in hand with an economic recovery.
Page 5 of their 2006 annual report is interesting, it shows their year on year growth from 2003 to 2006. http://www.minara.com.au/files/docs/157_MINARA_2006_Annual_Report.pdf
If anything sounds wrong or right, do mention it.
MRE Price at posting:
71.0¢ Sentiment: Buy Disclosure: Held
