JBM

Market analyst Macquarie Research Equities have released an Australian nickel sector update: Swiss-based mining powerhouse Xstrata PLC said on Monday it had successfully negotiated a cash bid to buy LionOre Mining in a merger value at C$4.6 billion (AUD$4.9 billion). The proposed deal would further consolidate Xstrata's position in the nickel sector following last year's Falconbridge acquisition, placing it close to the world's third-largest nickel producer. In terms of assessing the potential likelihood of a bid for one of the Australian nickel plays in light of this deal, the market analyst believes two key points must be borne in mind:
(1) There are clear vertical integration synergies between LionOre's mining portfolio and Xstrata's downstream processing facilities; and
(2) By virtue of its production base and reserve/resource size), LionOre presents a meaningful acquisition for a major global nickel producer such as Xstrata.

The analyst believes the two most likely Australian nickel takeover candidates in the short-term are Jubilee (JBM) (effectively uncontracted concentrate and strong growth profile) and Sally Malay (SMY) (strong growth profile and only partially exposed to BHP concentrator off take agreements). The analyst has put an Outperform recommendation for JBM with a 12 month price target of $17.50 pr share. Jubilee Mines is the only major nickel concentrate producer with uncontracted concentrate stream in the medium and longer term (current off take deal with CVRDInco expires in October 2007). Plus, JBM's Cosmos mine produces one of the world's best nickel concentrates that is ideal for blending with lower quality concentrates. The analyst highlights that JBM’s high operating margins, healthy dividend yield and first class exploration track record set it apart from the other producers. While trading multiples remain stretched, this valuation differential is quickly closed with the anticipated discovery of a further 50 thousand plus tonnes of high-grade nickel deposits.

Jubilee Mines (JBM) have an Outperform shares recommendation and a share price target of $14.50 from stock analyst Macquarie Research Equities (MRE). The analyst continue to be medium and long term resource bulls. However MRE are increasingly of the view that the short term outlook for the various commodities is more clouded than it has been for some time, which is likely to drive increasing volatility and divergent performance across the metals complex. Given MRE's stainless steel driven view that nickel prices should edge back towards US$10/lb in 1H07 (a significant drop from the current US$15.60/lb spot price!), and in spite of the corporate activity we have witnessed at the top end of the global nickel sector, MRE have decided to reconsider their recommendations for the nickel space. Jubilee Mines remains a high quality, high growth investment in nickel assets that are expected to yield significant exploration success over the coming 12 months. A previous Jubilee Mines (JBL) stock recommendation.

Interesting news... an Australian court has awarded a shareholder compensation as a result of actions by an ASX listed company...

Imagine getting compensation for the lack of disclosure by a company listed on a public stock exchange. That's what happened on the 6th of September 2006 with Jubilee Mines (JBM), a Western Australia nickel miner.

Read the rest of "Compensation for the Lack of Disclosure"...

Macquarie Research Equities (MRE) have maintained their outperform recommendation for the Jubilee Mines NL (JBM) stock with a share price target of $10. JBM is the stock analyst's preferred nickel exposure due to the company's "high operating margins, healthy dividend yield and first class exploration track record leveraged into an aggressive drilling programme." "MRE see further share price catalysts to include further high-grade exploration success around Cosmos combined with an expected expansion to 17–20ktpa nickel in high-grade concentrate."

A compilation of updates by brokers:

If you wish to use these broker recommendations for trading shares listed on the Australian Stock Exchange, it is highly recommended that you back up your analysis using fundamental or technical analysis or a combination of both before investing in any company.

UBS has a Neutral 2 recommendation for National Australia Bank (NAB) with a target of $35 per share.