TEXT-S&P summary: Mongolian Resources Corp. | Reuters: "Rationale
The rating on Mongolia-based iron ore miner Mongolian Resources Corp. (MRC) reflects the company's production and sales ramp-up risks, its high customer and mineral oncentration, and high debt. MRC's second-quartile cost position and positive demand prospects in the northwest Chinese iron ore market partly offset thse limitations. The rating factors in the company's proposed issue of up to US$300 million in senior secured notes.
We assess MRC's business risk profile to be "vulnerable," as our criteria define the term, to reflect the high risk associated with a ramp-up in the company's production and sales volumes over the next 12-18 months. MRC's target of doubling annual production and sales to 3.7 million tons in 2013, from the 1.8 million tons it expects in 2012, is aggressive, in our opinion. We view the company's record of growing production and sales at such a pace and scale as mostly untested."
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The rating on Mongolia-based iron ore miner Mongolian Resources Corp. (MRC) reflects the company's production and sales ramp-up risks, its high customer and mineral oncentration, and high debt. MRC's second-quartile cost position and positive demand prospects in the northwest Chinese iron ore market partly offset thse limitations. The rating factors in the company's proposed issue of up to US$300 million in senior secured notes.
We assess MRC's business risk profile to be "vulnerable," as our criteria define the term, to reflect the high risk associated with a ramp-up in the company's production and sales volumes over the next 12-18 months. MRC's target of doubling annual production and sales to 3.7 million tons in 2013, from the 1.8 million tons it expects in 2012, is aggressive, in our opinion. We view the company's record of growing production and sales at such a pace and scale as mostly untested."
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