The Kambalda nickel camp is stirring again some 53 years after WMC (acquired by BHP in 2005) drilled the KD1 discovery hole, with Mincor boss David Southam positioning the company to be in the thick of things.
Further drill results suggest the Cassini deposit is getting wider and revealing higher grade at depth. Macquarie is encouraged by the news as, while further drilling is needed to confirm its potential, the mine could be in production within two years.
Mincor’s Sep Q nickel production beat the broker by 8%, largely due to a better performance at Mittel. Cash costs improved but cash flow was only breakeven, and news on exploration was mixed, the broker notes. The cost of MCR’s fleet replacement program is taking its toll.
Mincor has cash in the bank and a highly regarded management team, but the nickel producer also has limited life span, comment UBS analysts in their maiden research report on the company. The latter means the company’s future is very much dependent on further exploration success. That and there’s, of course, the cash that can be used to purchase growth through acquisitions.