Marc posts turnaround, nets P267 million in 6 months

MANILA, Philippines – Marcventures Holdings, Inc., a listed nickel mining firm, posted a dramatic turnaround with earnings of P267 million from July to December last year, as it made 12 nickel ore shipments after it started exporting ore last August, to buck the P10 million loss it posted for the same period in 2010.

 In a disclosure to the Philippine Stock Exchange, the newly-listed nickel mining firm (trading symbol Marc) said the total revenues of its fully-owned subsidiary, Marcventures Mining and Development Co.  for the July-December period reached P842.9 million with total nickel ore exports of 628,100 wet metric tons.

The turnaround puts Marcventures on track to hit its P1 billion earnings this year which was earlier cited by Abacus Securities in a research report last November.

Abacus Securities said that the mining stock  has a significant upside on account of developments that augur well for the firm, such as the decision of Indonesia not to export nickel ore and the exploding growth for nickel of China, the world’s second largest economy.

The company is already generating significant profits although it has only explored 120 hectares or 2.5 percent of its mineral property and is only currently mining an area of 15 hectares, or 0.3 percent of its 4,799-hectare property.

With cash flow from current operations, the company is expected to embark on major exploration program that will significantly boost its mineral reserves and add significant value to the company.

Abacus said that with the upward trend in nickel prices, Marc is seen to further expand its operations and increase its deliveries to up to one million tons of high-grade nickel ore shipments on an annual average by 2013. In fact, Marcventures has a three-million-ton nickel ore sale contract last year with Dunfeng Holdings, China’s largest importer of nickel ore.

With a full year of operations, Abacus projects at least 700,000 WMT of high-grade nickel ore sales, which could fetch a net income of P968 million based on a conservative estimate of $55.00 per  wet metric ton                            

In a separate industry report about nickel, a global financial services consultancy firm says that Nickel Pig Iron (NPI), a Chinese invention, has gained wide acceptability as a substitute for primary nickel as a raw material for stainless steel manufacturers.

To meet burgeoning demand for NPI, Chinese NPI plants are willing to pay higher prices, especially for high-grade nickel ore, which abounds in MARC’s 4,799-hectare mining property area in Surigao del Sur.

China, one of the world’s premier markets for nickel ore, sources most of its nickel ore from the Philippines and Indonesia.