AGM - Allegiance Mining

[chicken]

Report on Foundation Day Avebury Mine-

What a great day for Allegiance Mining! The unveiling of the Foundation Stone symbolically marked the transition from being a nickel explorer to being a nickel producer, although processing of ore won’t begin till 3rd quarter next year as we all know.

Those of you who have only recently discovered AGM may not appreciate the hard struggle that went on to get to this stage. Ive held shares in AGM for almost seven years and until I attended this function I had no idea how difficult it was. They spoke of the year 2002 as being the “black year” when despite all the good drilling results the share price went down to 0.03c. At the time, for me the drop in price was disappointing, but I did buy more shares at the time (I didn’t tell my wife) because Id done enough research to know they were on to something. And that belief is what kept them going.

Finances were so tight they couldn’t afford to put a decent access road into the drilling sites and the drillers had to walk in after heavy rain. The rigs were helicoptered in and out- far cheaper than a series of roads.

But I gained an appreciation that those involved with the project in the early days had real guts, and have every reason to be proud of their achievements.

I came away from the unveiling knowing that the guys involved will get this project up and going- properly and profitably. The company have hand picked the best personnel in the country for the project- that’s a strong impression I got.

The Chairman of Jinchuan was in attendance with a group of engineers and geologists. They got to look through the mine but not us mere shareholders- all we got to see was the site for the processing plant. Work was progressing flat out on the tailings dam which has to be blasted out of a flat low lying area, about a dozen assorted heavy machines were working in the area. The rock was being dumped to raise up an area for the processing plant.

None of the Chinese present could speak English so all the speeches had to be interpereted. The chairman of Jinchuan made one significant comment which I found interesting. He had just returned from a conference of mining/ metal company heads in China sponsored by the Chinese Government. The purpose of the conference was to prepare the mining/ smelting industry for the next step in Chinas development, which was to improve the living standard of the 900 million peasants in rural areas. Apparently infrastructure development throughout rural China on a MASSIVE scale is about to begin. State owned companies, like Jinchuan must play their part (for the good of the country) and would have to revise their production targets.

Jinchuan has a small city in Ganshu province on the edge of the Gobi desert devoted to nickel production, employing 80000 people (from memory). They are doubling production by 2008 by building a new production line. They are very keen to find news sources of nickel ore to smelter. (China was a net exporter of nickel ore until 2000- but export of nickel and some other ores were made illegal last month).

AGM Chairman Tony Howland-Rose emphasised in his speech that he believed that nickel prices would “remain stronger for longer” than many of the doomsday “experts” were suggesting . Given his track record I don’t think his comments can be easily dismissed.

Ian Levy showed us the usual slide comparing nickel mining at Kambalda WA to Avebury, and said that the slide spoke for itself in reguard to the potential profitability of the Avebury mine. He also emphasised that the average 1% nickel contained in the ore was around the industry standard wordwide, and that it was inaccurate to describe the deposits as “low grade”.

All shareholders present got a free green hat with “Avebury Mine- Foundation Day December 2006” printed on it, looks like it would make a good fishing hat, but Ill keep mine as a memento. We got a free lunch too.

The announcement that Barminco was the successful mining tenderer was a surprise, as was the fact that they would start mining on Dec 7th (to build a stockpile for processing and to extend the decline about 5km round the orebodies). Barminco is local company formed by miners (ex Rennison mine I think), and were described as very experienced and competent.

I asked around about the rumour of a Zinifex or Jinchuan takeover of AGM. All I spoke to thought there was nothing in either suggestion. Hope that’s right because AGM will make us some big dollars- Im very confident in that now.

Looooooking Gooooood.....thanks for that.....my retirement fund....my average now 14cents.....Chicken

 

[ghosta]

Announcement this week?

Its been 6 weeks since AGM has made an announcement. Given that they usually average 2-6 per month, Id say we are due for one this week.

Obviously "the beards" have been busy over the last few weeks preparing for the Foundation Day at Avebury and the Chinese visit and have had little time to prepare anything.

Lets hope that in their visit with the Chinese last week to the Burnie Metalurgical place where all their Metalurgical work is done, they had some remarkable samples from Saxon to show off!

Would be a good Xmas present!

 

[ghosta]

Heres an interesting snippet from Todays Sunday Examiner (Launceston Tasmania)

“Mining in the historic Mt Bischoff mine at Waratah is set to begin next year…..Bluestone Tin which bought the mine in 2004 has lodged a development plan……The company also plans to restart mining at the mothballed Renison Bell tin mine 80km away, and process the ores together at the Zeehan operation.

But it might struggle to get workers.

The West Coast mining industry is fighting to hold on to its skilled operators in the face of a new nickel mine also starting up production next year.

Companies (operating existing mines on the West Coast) are even offering financial incentives for workers to stay put.
Its understood one mine has increased workers pay packets by 10 per cent while workers at another mine are being offered supermarket vouchers.”

The article goes on to tell how Bluestone Tin bought the Renison Bell mine from administrators, in 2003, and after spending $50 million, “bought the mine- described as a “basket case” by many who courted the idea of investing in it – back into production”. Seven months later the mine closed, leaving 200 workers jobless.

This article is collaborating evidence to my earlier posting where I noted that Allegiance Mining had sourced the best workers on the West Coast for the Avebury mine.

It also helps to explain why at the recent Foundation Day at Avebury mine, the mining manager Paul Richardson stated confidently “We wont have any trouble finding miners for Avebury ine”

 

[savtin]

Hi all AGM holders,
In regards to Technical analysis of Stock Prices..............didn't AGM show a classic breakout over the last week and yet its price seems to be fizzling at the moment..............what happened? I mean I know that T/A is not 100% certain.............but i mean all the signals were there for a great breakout on good volumes.................i thought the next price target would be 57 cents base on the difference between the 42 cents and the 15 cents base line....

i am in for the long haul but i thought based on the short term indicators she was of to the moon............?????????????????

 

[ghosta]

Yes Satvin it showed every sign of continueing. But there was a big seller on the market offloading a lot of shares in 25000 parcels. My guess its some old guy whos held the shares for a long time and thinks its time to cash in- hes made enough and its time to spend his money.

Perhaps we will be in the same poition some day selling 2000 share parcels.

 

[savtin]

More delays, is the fact they said that processing will start in 10 months peed some people off. ?????

We need some good exploration holes to get more interest.

 

[nizar]

Hi all AGM holders,
In regards to Technical analysis of Stock Prices..............didn't AGM show a classic breakout over the last week and yet its price seems to be fizzling at the moment..............what happened? I mean I know that T/A is not 100% certain.............but i mean all the signals were there for a great breakout on good volumes.................i thought the next price target would be 57 cents base on the difference between the 42 cents and the 15 cents base line....

i am in for the long haul but i thought based on the short term indicators she was of to the moon............?????????????????

Yep the uptrend here is still very much intact.
The break will only be a short-lived one if significant volumes are there.

Im happy to ride this one longer term.
50c by the end of the week and 60c by the end of the year would make me a very happy man.

If it breaks through 40c though, then we are in trouble...

 

[savtin]

Ghosta,
Was the 10 month until start time, flagged at the foundation day meeting, or was that new NEWS.

Seems like it will be same again this time......remember the feasibility study kept getting pushed further out as well.

So it appears an October start date for processing.

How much ore will be mined by this time? Anyone know?

Regards
Savas


P.S looks like they go back in the bottom draw.

 

[nioka]

50c by the end of the week and 60c by the end of the year would make me a very happy man.

2006 or 2007 ?

 

[nizar]

2006 or 2007 ?

Oh sorry i didnt make myself clear, i meant 2029
You know what they say, stupid question, stupid answer.

 

[jj0007]

Delays are the norm of these relatively small start up producers. Having it up and running on schedule would put it in the "remarkable" class. I am prepared for a 1 - 2 quarter delay......that is up to 6 months.

 

[ghosta]

Delays are the norm of these relatively small start up producers. Having it up and running on schedule would put it in the "remarkable" class. I am prepared for a 1 - 2 quarter delay......that is up to 6 months.

I agree with most of your statement. But to call AGM a small start up producer is quite incorrect. They will be processing 1000000 tonnes of ore soon after startup. That aint small- its the biggest mine by far to start up in Tasmania.

Also the delays are small- look at Ravensthorpe...

Anyone starting up any major project are at the mercy of equipment suppliers, in Aveburys case the supplier of the ball mill.

In the end it will make no difference whatsoever.

 

[rub92me]

Ghosta,
Was the 10 month until start time, flagged at the foundation day meeting, or was that new NEWS.

Very good question. If it was new NEWS, then they should have explained it better and make it a market sensitive announcement, rather than try and slip it under the radar. So either they are dodgy, or all the AGM experts on this thread missed something. So which one is it?

 

[savtin]

rub92me,
it is ok i spoke to a comp. rep and they were always flagged for a 3rd quarter start.i.e end of sept.....now it may be the first of oct ......no big deal..........they are working around the clock to ensure they start making money as soon as possible............ALL is GOOD.

 

[ghosta]

" We need some good exploration holes to get more interest."

As I keep saying be patient.

Incidently the drilling program for 2007 is now listed on AGMs website, under Exploration > Avebury.

 

[rub92me]

rub92me,
it is ok i spoke to a comp. rep and they were always flagged for a 3rd quarter start.i.e end of sept.....now it may be the first of oct ......no big deal..........they are working around the clock to ensure they start making money as soon as possible............ALL is GOOD.

Thanks for the clarification. Like you I'm in this for the long haul and I don't expect it to double in 10 seconds, but something seems to have spooked holders. Maybe lots of people with trailing stops too close to the wire?

 

[jj0007]

I agree with most of your statement. But to call AGM a small start up producer is quite incorrect. They will be processing 1000000 tonnes of ore soon after startup. That aint small- its the biggest mine by far to start up in Tasmania.

Maybe I should have used "mid tier"... but still small when you compare to the major mining houses e.g. RIO, BHP, OXR, ZFX etc. I guess the point I was trying to make is that, with such resource shortages (not the ore type) at the moment, a company like AGM with "only" 300 odd mil mcap will not be able to throw its weight around when it comes to making certain demands. Unlike the bigger COs who can say "jump" and the suppliers will ask "how high". I always give these small-mid tier startups a leeway of 1-2 quarters.

 

[chicken]

" We need some good exploration holes to get more interest."

As I keep saying be patient.

Incidently the drilling program for 2007 is now listed on AGMs website, under Exploration > Avebury.

Ghosta bought some more at 44.5c at the close....good buying me thinks....for longterm...can see here in 12 months $2 to $3.....

 

[ghosta]

Ghosta bought some more at 44.5c at the close....good buying me thinks

Ha Chicken I got them cheaper than you did (chicken topped up at 48c). But both of us will make some good money!

 

[ghosta]

Well its been a fantastic year for AGM with its tripling in price over the year. Had I posted a tipping competition last year I would probably have been the only one to put a tip in- but a lot more people have become aware of this great stock now and Im sure we can get quite a few tips. Had I tipped last year I would have said 30c, so Im conservative as far as the SP goes.

End of next year my guess is 92c

Whats your guess?