Minara Resources (MRE) Shares Recommendation

Minara Resources (MRE) have a maintained Buy shares recommendation and a share price target of $6.14 (was $6.07) from share analyst Citigroup Research Equities (CIR). The analyst notes that the Minara Resources December quarter nickel production of 8,262t was slightly lower than CIR expected but cobalt output of 616t was a record. The 10% QoQ decline was due to the 12 day shut down in November to refurbish the acid plant. Since the restart the plant has been performing close to the 100tpd rate. Production guidance of 32-35,000t for CY07 was provided that allows for some second half output from the heap leach and the planned 28 day shut down in October/November'07. Our forecast of 34,200t includes 875t of leach product. The record second half production coincided with record nickel prices (average of US$15/lb for the final quarter) resulting in cash of $310m. Capex over the next six months is limited to ~$21m for completion of the new water bore system (MRE share ~$12m) and SIB expenditure (~$9m). Likely sustained high nickel prices and thus ongoing margins of ~US$10-$11/lb could enable the company to pay more generous dividends. CIR’s next 12 month dividend forecast (includes CY06 final) has been increased to $1.06/share, a yield of ~19%. Minara Resources was a Loser of the Week in the first week of 2007. A previous MRE stock recommendation from July 2006.

Minara Resources Limited is listed on the Australian Stock Exchange (ASX) under stock code MRE. You can view their investor website here. Peter Johnston is the CEO or Minara Resources and James Campbell the Chairman. MRE was listed on the ASX on 17 March, 1994. The resources company is involved in nickel and cobalt mining and metal production as well as the exploration for nickel. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MRE. Check your charts and good luck with your share trading!