{"id":52510,"date":"2014-06-10T02:46:10","date_gmt":"2014-06-10T06:46:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=52510"},"modified":"2014-06-10T02:46:10","modified_gmt":"2014-06-10T06:46:10","slug":"why-the-western-areas-share-price-fell-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/why-the-western-areas-share-price-fell-today\/","title":{"rendered":"Why the Western Areas Share Price Fell Today"},"content":{"rendered":"
June 10, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

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

Shares of Western Areas [ASX:WSA]<\/strong> fell by 3.27% on Tuesday, closing at $4.44. The share price fall follows a 1% decline in the nickel price over night. Nonetheless, the share price has increased 85% since the start of this year. <\/p>\n

Why Did This Happen to the Western Areas Share Price?<\/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]<\/strong> 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,\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. <\/p>

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What Now For Western Areas?<\/h2>\n

The 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 is 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. <\/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

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\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] fell by 3.27% on Tuesday, closing at $4.44. The share price fall follows a 1% decline in the nickel price over night. Nonetheless, the share price has increased 85% since the start of this year. Why Did This Happen to […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-52510","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=52510"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/52510\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=52510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=52510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=52510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}