Nickel prices have gone south, and so has Minara
"It's tight now and the miner needs cash.
MINARA Resources - which was trading at $6 a share in May - plunged below $1 yesterday after the nickel laterite miner predicted it would earn between $20 million and $40 million this year.
Lower nickel and higher sulphur prices have placed severe pressure on the miner, which earned $272 million last year at a time of record nickel prices.
Minara produced 7656 tonnes of nickel during the September quarter.
More worrying, despite recently halting all major development projects, the company needs more cash to help alleviate the cost pressures. It has yet to decide on whether to raise debt or equity, but Deutsche Bank recently said it would have an $80 million funding shortfall in the present half.
The volatile state of the debt markets means Deustche analyst Paul Young thinks a rights issue - which could be fully underwritten by Minara's majority shareholder, Swiss commodities trader Glencore, is the most likely option. However, that could place further pressure on Minara's share price."
