Mincor Resources' share price hit a near 10-month high yesterday, breathing new life into WA's much-maligned nickel sector, which has borne the brunt of lagging prices.
Mincor closed at 80¢, a 41.5 per cent jump from its close a week ago, providing hope for other WA producers that the metal has bottomed out and officially turned the corner.
After slumping to $US15,250 ($14,614) a tonne last month, the lowest for more than three years, nickel on the London Metal Exchange yesterday had recovered to $US16,650/t, or $US7.55 a pound.
Analyst views on the outlook for the nickel price remain mixed, not helped by the collapse in the iron ore price because of the bearish outlook on steel demand in China and Europe. Nickel is a key ingredient in stainless steel.
The Australian Securities Exchange issued a "please explain" to Mincor on Wednesday because of the rally in its share price but Mincor responded that it had no explanation for the sudden interest from investors.
Shares in the Kambalda nickel miner jumped a further 6¢ to 80¢ yesterday, compared with 56.5¢ last week.
Managing director David Moore yesterday pointed to what he described as "undervalued stock" and the resurgent nickel price.
"The company's deeply undervalued, I've been saying that for nine months and now maybe someone's actually listening," he said.
France's biggest bank BNP Paribas this week predicted a rise in the nickel price to $US8.30/lb by 2013.
Mr Moore was more optimistic.
"I see it getting back of $US10 to $US11," he said.
"There's been two years of a dropping nickel price, two years when there's really been no new investment in new production. And I think it's possible we could run into a supply crunch."
Mr Moore laughed off a suggestion that Mincor's rising share price was because of an impending takeover bid for the company.
Peter Harold, managing director of fellow WA nickel producer Panoramic Resources, said he was hopeful the worst was over.
"But you just never know with nickel," he said.
Panoramic, which last week dropped out of the S&P-ASX 200 after hitting nine-year share price lows, jumped 3.5¢ yesterday to close at 52.5¢. Last week the company's share price was 44.5¢.
Mr Harold said the miner had hit "the perfect storm" over the past six months, created by Magma Metals shareholders selling their inherited scrip, the falling nickel price and the cull from the S&P-ASX 200.The share prices of Independence Group (despite yesterday easing 4¢ to $3.76) and Western Areas (which fell 8¢ to $4.12) appear to be on an upward trajectory after plunging as low as $2.96 and $3.50, respectively, in July.
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