{"id":51216,"date":"2014-05-20T02:59:53","date_gmt":"2014-05-20T06:59:53","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=51216"},"modified":"2014-05-20T06:54:13","modified_gmt":"2014-05-20T10:54:13","slug":"why-western-areas-share-price-rose-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/05\/20\/why-western-areas-share-price-rose-today\/","title":{"rendered":"Why Western Areas Share Price Rose Today"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

What happened to the Western Areas Share Price?<\/h2>\n

\nShares of Western Areas [ASX:WSA]<\/b> rose by 4.01% on Tuesday, closing at $4.41. This is close to its highest level since the beginning of 2013. The share price has increased over 85% since the start of this year.\n<\/p>\n

Why did the Western Areas Share Price Rise?<\/h2>\n

Western Areas is Australia\u2019s second largest sulphide nickel miner, producing roughly 25,000 tonnes per year of nickel in ore from its Flying Fox and Spotted Quoll mines.<\/p>\n

The WSA share price has nearly doubled in price since the start of this year; a time when Indonesia, the world’s top supplier of the metal, began talking about enforcing a ban on nickel exports (now enforced).<\/p>\n

On top of this, recently Vale SA [SA:VALE5]<\/b> was ordered to shut down one of its largest nickel processing plants by the New Caledonia government. The plant encountered a spill of \u2018acid-containing solution<\/i>,\u2019 a small amount of which entered a nearby creek. Vale is the world\u2019s second largest nickel producer.<\/p>\n

In this case, the nickel spot price continues its volatile climb. Spot nickel reached $21,625 per tonne on May 13, the highest level since February 2012. The price has increased roughly 43% this year.\n<\/p>\n

What now for Western Areas?<\/h2>\n

\nThe company is living up to its slogan, \u2018Think Nickel, Think Western Areas\u2019.<\/p>\n

Fundamentally, the company\u2019s nickel assets look good \u2014 very high grade and low cost.<\/p>\n

Flying Fox is a very high grade mine with a current reserve estimate of 1.5 million tonnes at an average grade of 4% nickel. Nonetheless, with the company mining Flying Fox at a production rate of roughly 300,000 tonnes of nickel per year, the remaining mine life\u00a0is just 4.5 years.<\/p>\n

Saying this, there is significant exploration upside at deeper depths for the company, which could materially upgrade its mine life.<\/p>\n

The Spotted Quoll mine is also very high grade nickel, at roughly 5.5%. The mine life and reserves are likely to extend beyond 10 years.<\/p>\n

Nonetheless, the share price has nearly doubled since the Indonesian nickel export ban was enforced. Furthermore, with speculative interest focusing on nickel, the price is volatile.<\/p>\n

The market is concerned about supply, mostly because of Indonesia\u2019s export ban. If Indonesia decided to reverse its ban, Western Areas shareholders could be in for a lot of pain.<\/p>\n

Western Areas looks like it will continue to be a roller coaster ride on the Nickel price.\n<\/p>\n

Jason Stevenson+<\/a>
\n Resources Analyst, Diggers and Drillers<\/em><\/strong><\/p>\n<\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What happened to the Western Areas Share Price? Shares of Western Areas [ASX:WSA] rose by 4.01% on Tuesday, closing at $4.41. This is close to its highest level since the beginning of 2013. The share price has increased over 85% since the start of this year. Why did the Western Areas Share Price … <\/p>\n

Continue reading “Why Western Areas Share Price Rose Today”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-51216","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/51216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=51216"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/51216\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=51216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=51216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=51216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}