The company had already scaled back its operations, putting the combined Miitel/Mariners operation onto a single shift basis in the December quarter to produce 739 tonnes of contained nickel, in line with plan.
But given the continued falls in the nickel price, Mincor plans to implement the final phase of its “flexible mining strategy” by winding down operations completely this quarter.
“Mining will cease at the end of January and the mines will be prepared for a period of suspension until the nickel price recovers,” the company said.
Accessible ore at Mariners will be depleted by the end of this month, clouding the future of the mine.
The company said substantial developed ore remained accessible at Miitel, but it was best left there until the price picked up as its “early availability will assist the restart of full-scale mining in due course”.
Mincor posted a half-year operating deficit of $A4.31 million, with direct operating costs coming in at $21.3 million versus revenue of $17.7 million.
GMP Securities analyst Duncan Hughes said while quarterly production was slightly ahead of expectations, the suspension of production would have a negative impact on its valuation as he had assumed a continuation of single-shift mining this quarter.
“However, we had assumed slightly improved nickel prices and that has not happened,” he said.
“As with neighbouring Australian nickel producers Panoramic Resources, Mincor has determined to preserve the value of its nickel reserves until a time of better nickel prices.”
Panoramic suspended its Savannah mine this morning, while Brazilian producers Mirabela Nickel and Votorantim both announced supply cuts in recent days.
The cuts will be music to the ears of Glencore boss Ivan Glasenberg, who last month expressed frustration over the lack of supply cutbacks in the nickel space, despite Glencore’s own Murrin Murrin mine being cash negative.
He warned it was an asset that could be suspended.
Meanwhile, Mincor said it would focus on the definitive feasibility studies for the Burnett and Durkin North projects, with the plan to have them development-ready for when the price recovers.
Mincor had cash at bank of $25.5 million at the end of December and working capital of $20.1 million after redundancy payments of $1.7 million, provisional pricing adjustments of $1.3 million, inventory write-downs of $1.1 million and exploration spend of $390,000.
Like Panoramic, Mincor’s shares slumped by more than 31% to 13c.
