Financial Summary & Key Facts
Minara Resources Limited is Australia's second largest nickel producer, and one of the top ten in the world.
Minara owns and operates the Murrin Murrin Nickel Cobalt Joint Venture project (60 percent Minara, 40 percent Glencore International AG). Murrin Murrin is a world class hydrometallurgical project, using sulphuric acid in high temperature, high pressure autoclave vessels to heap leach nickel and cobalt from low grade lateritic (oxidised) ores.
Production at Murrin Murrin in 2008 totalled 30,514 tonnes of nickel (2007: 27,585 tonnes) and 2,018 tonnes of cobalt (2007: 1,884 tonnes). In 2008 Minara recorded a gross profit of $8.4 million, however this reduced to a loss of $19.8 million after tax.
There was no dividend declared or proposed for the financial year ended 31 December 2008.
In response to external market conditions, Minara shifted its business focus in the latter half of 2008 from capital expansion to a "back to basics" philosophy. A new business plan was successfully implemented in the second half of 2008. The new business plan focussed on cost saving initiatives including; reduced capital expenditure, reduction in discretionary expenditure, reduced mining and maintenance costs, a new mine plan focussed on low magnesium ores and a reduction in the number of contractors and employees. Implementation of the new plan was completed by year's end and while considerable cost savings were achieved across the second half of 2008 the full impact of the cost savings are now being realised.
The heap leach project progressed well for the year and operated in line with design capacity. Although the Board approved a major expansion of heap leach activities in early 2008 this was deferred later in the year as a result of cost pressures. Optimisation of the heap leach activities are continuing in 2009 and expansion plans will be continually reviewed in the light of prevailing market conditions.
On 29 October 2008, Minara announced a fully underwritten renounceable pro rata rights issue. 700,670,353 fully paid ordinary shares were taken up by Minara shareholders at an issue price of A$0.30 each. The rights issue raised approximately A$210 million (before costs). The new shares were issued on 5 December 2008. The rights issue was underwritten by Glencore International AG, whose holding following the rights issue is 70.6%. Net proceeds from the rights issue were applied to repay short term debt and to fund committed capital expenditure. The remaining funds provide the company with working capital to underpin ongoing operations.
