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  • Four-mine profile pays off

    MINCOR RESOURCES

    One thing the market andfinanciers love is a proven trackrecord. Not something Mincor Resources

    seemed to care too much about when it battled to scrape together $31.2 million for its share in a $38 million bid for WMC’s Miitel nickel mine near Kambalda in 2000.

    At the time, an 18-month-old Mincor had just $1 million to its name, a market capitalisation of $5 million and no track record in production.

    Only the faith of BankWest and furious last minute scrambling for interested investors by then Hartley Poynton realised the funds required to win the bidding race.

    Six months later, when Mincor was successfully producing from both the Miitel and the separately purchased Wannaway mine, the share price was scaling unfamiliar heights and enjoying newfound market support.

    However when Mincor announced 18 months ago it was going to bring the Mariners and Redross mines into production — two mines that had hung up their boots long ago — the market was again resoundingly indifferent as the stock levelled out, loitering around the 70c mark.

    Once again, Mincor proved it was more than up to the challenge as all four mines produced in chorus for the first time in the June quarter this year, allowing Mincor to announce a $20.3 million after tax profit for the 2004-05 financial year.

    Chief executive and managing director David Moore is now patiently and confidently waiting for the market to get behind the company, which has to this point continually proved itself.

    “The share price has been a bit flat really for the past 18 months and that’s probably, looking back, because the market took the view that we were going to spend a lot of money on these new

    developments with the associated risk, so was waiting to see how it panned out,” he said.

    Moore said the market was starting to realise the four-mine production profile was working and strong nickel prices would further enhance Mincor’s prospects as an investment.

    He also predicted the recently announced financial results from last year would attract further attention from the market.

    “With the major capital development programs behind us, rising production, and a good, expanding reserve base, we can rake in the dollars, spend a fair bit of it on exploration, but also pay it out to shareholders,” Moore said.

    “Certainly given the continuing strong nickel price the company looks well set for the future.”

    During the milestone year, profit fattened by 80% to eclipse the $20 million mark and the dividend paid to shareholders doubled to 3c.

    Redross, Mariners and North Miitel ramped into production at various stages, generating a 15% production hike from 8679 tonnes of nickel concentrate from 330,000t of ore, to 10,028t of nickel concentrate from 419,000t of ore.

    Mincor has budgeted for a 30% production increase this financial year to 13,000t — not bad for a company that five years ago had only a suite of high- cost African gold prospects to its name.

    But it hasn’t all been beer and skittles in recent years, with the industry-wide boom producing its share of problems. As the nickel price improved and more operations came into production, the increased mining activity created a shortage of people and equipment. “To actually grow your operations, develop three new operations (including Miitel North) and man them up in the face of these very tight conditions has really been a major achievement — especially when you think of the number of new

    From a junior gold explorer in Africa in 1999, Mincor Resources has become a West Australian nickel producer with a 2005 profit exceeding $20 million. By Chris Cann

    Mincor chief executive and managing director David Moore:“We’ve been sowing for the last

    18 months and now we can look forward to harvesting some of those efforts”.

    A truck load of ore emerges from Mincor’s flagship mine, Miitel.

    50 RS september/october 2005

    SUN RESOURCES NL

    Flour Bluff Gas Project, South Texas Gulf Coast, USA

     Sun Resources has variable interests (12.5% to 16.67%) in the redevelopment of an Sun Resources has variable interests (12.5% to 16.67%) in the redevelopment of an old south Texas giant gas fi eld complex that has produced to date 1.3 TCFG and 64 old south Texas giant gas fi eld complex that has produced to date 1.3 TCFG and 64 old south Texas giant gas fi eld complex that has produced to date 1.3 TCFG and 64 old south Texas giant gas fi eld complex that has produced to date 1.3 TCFG and 64 old south Texas giant gas fi eld complex that has produced to date 1.3 TCFG and 64 MBBO.

     The project aims to increase production from the current level to 40 MMCFG/day in the The project aims to increase production from the current level to 40 MMCFG/day in the The project aims to increase production from the current level to 40 MMCFG/day in the The project aims to increase production from the current level to 40 MMCFG/day in the The project aims to increase production from the current level to 40 MMCFG/day in the next 12-18 months. next 12-18 months. next 12-18 months.

     Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at Dec 2004 3P reserves of 92.5 BCFG are anticipated to have increased to 143 BCFG at the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut-the end of the current program of 3 new wells and workovers/recompletions of 3 shut- in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour in producers in early October 2005. Potential to 200 BCFG remains in the West Flour Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex. Bluff, East Flour Bluff and Pita Island Gas Fields in the giant fi eld complex.

    Eagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USAEagle Oil Project, San Joaquin Basin, California, , USA

     Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant Sun Resources has a 10% interest in the development of an oil pool in a signifi cant stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 stratigraphic trap with potential of between 13 MMBO + 25 BCFG to 34 MMBO + 58 BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November BCFG through a horizontal lateral test of the host Gatchell sand reservoir in November – December 2005. – December 2005. – December 2005.

    Offshore Carnarvon Basin, Western AustraliaOffshore Carnarvon Basin, Western

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