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AGM - Allegiance Mining

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Yep, they are selling the high performers (nickel, zinc etc) and buying the poor performers (aluminium etc)...not sure if this means that the prices of the high performers will rebound, but I would expect some reversal once the whole process has been completed.
 

"While overall copper and aluminium seem to be attempting to build a base above Monday's lows confidence may not be strong enough to encourage consumers back in force yet," said basemetals.com analyst William Adams. Sentiment this year has been generally bearish, with some traders considering this a short-term phenomenon. "The market this morning has been a little jittery," said the trader, "but January always tends to be an aggressive month with a correction." Nickel and zinc, after falling on Monday after the Dow commodity-index re-weighting, have steadied a little. Zinc had suffered a slight fall in early Tuesday trading to be bid at 3,635/mt at 1000 GMT, after closing Monday on $3,720/mt, which nickel eased to $31,200/mt from the previous $31,400/mt. The base metals market is still being characterized by weakness in lead and copper, even though the market has begun to stabilize a little.
 
As always the long term price of any commodity will be determinned by the forces of supply and demand..Economics 101
 
Can anyone please tell me where I can find the stock levels and no of days supply for Nickel?
Cheers
 
By my calculations 1138600 tonnes a year ( 2001 usage figures) probably higher. 4000 tonnes in stock equates to approx 1 day of nickel available. Can anyone seriously see this situation changing in the near future? Is there any new supply coming on within the next 12 months which is going to affect these figures? The outlook for nickel and AGM seems to be sound for the time being. Would be interested in others points of view as to the direction of the nickel price.

Cheers
 
I don't know about other parts of the world but in Australia, I believe AGM will be the only new nickel producer this year. I read somewhere that BHP is in the process of commissioning a new nickel mine out in WA, which happened to be the direct path of the cyclone over the w/end. Hopefully, it will have put them back a bit.. LoL. SMY's announcements recently also stated that they will be producing more over the next two years. However, in terms of the global consumption, what additional nickel that will come out of Australia over the next couple of years will be marginal, certainly not enough to make the supply and demand curves meet again any time soon.
 
Novski said:
Any opinions on this in the short term/next week...since it's had a very good week or so.

My view is that it will retrace down especially if it closes at 60.5 which will create 2 short term peaks at 60.5.
Click to expand...
You were right and I was wrong. I'm still happy to wait now for the commencement of production.
 

There are two major new nickel mines scheduled to start production in 2008.
Both are laterite nickel mines, with production at both aimed at 50 000 tonnes.

One is BHPs Ravensthorpe mine, plagued by delays and huge cost overruns.

The other is Inco's mine in New Caledonia (French Territory). It has been stopped in the French Courts. Apparently they planned to dump acid waste straight into the sea. Inco gave the natives a 20% interest in the mine hoping they would go along with whatever they wanted to do. The natives want it out. Even if they can appease the majority of natives there may still be sabatauge problems.

Tony HR says both these mines are needed to come on line to meet demand, which is increasing at 50 000 tonnes per year, and if they do come on stream demand will still not be met in the long term.

It would be unusual if these mines met there present targets. Laterite mines are very difficult to get operating properly, and could take years to meet production targets.

Jinchuan now produces 100 000 tonnes of nickel per year. It plans to increase production by 50 000 tonnes by 2008, and a further 50 000 tonnes by 2010.
So the amount produced by these two new large projects could be swallowed up by Jinchuan alone.

Many Australian mines have a short (5-10) year life span. New discoveries are being made, but not even enough to replace mines due to go out of production.

It is possible that supply may meet demand for a short while if these two large mines start up sucessfuly together. But if prices drop too much they will cut production, as laterite mines produce expensive nickel concentrate.
 
nioka said:
You were right and I was wrong. I'm still happy to wait now for the commencement of production.
Click to expand...

Novski was right only because copper prices dropped, creating fear in the metals market generally, and the rebalancing the DJ/AIG Commodity Index gave the drop double impetus.

Pot luck Novski- nothing to do with twin peaks forming.
 
It's funny how these indicators correspond with the fundamentals so often. You'd think the chart knew what the fundamentals were going to be, rather than the other way around.
 
Novski said:
It's funny how these indicators correspond with the fundamentals so often. You'd think the chart knew what the fundamentals were going to be, rather than the other way around.
Click to expand...
Sometiomes it is the belief that the charts are gospel causes day traders to react in a way which then has the effect expected. However if the fundamentals are sound the situation is quickly reversed. Check out what happens in this case or refer to the SP of ADI as an example.
 
(In reponse to nioka)

Yes, that's true, if share price moved with indicators every time, we'd all be tech analysts and making a very good living out of it.

I got a little ahead of myself with my prediction, in that i assumed that the price was going to drop when it formed the second spike.I took into account the drop in volume here also. But like you say nioka, if there was some good news that evening, the price would likely have not formed the second spike and just continued on past 60.5c the next day.
 
Ghosta, just looking through your calculations made on the 30/12/2006. What do you mean by this?

ghosta said:
The calculations err very much on the conservative side, and assume Jinchuans profits are maintained at 25% of the nickel metal price. This may be on the high side, any reduction goes directly into the earnings per share.
Click to expand...

I thought AGM would be selling concerntrates to Jinchuan on spot price. What impact dose Jinchuans profits have on AGM's earnings?

TIA
 
JJ007- when calculating the price AGM gets for its nickel concentrate we need to start with the price of nickel metal, then deduct all Jinchuans costs (freight, smeltering, admin and PROFIT). The reason for having to do it this way is that neither AGM or Jinchuan want the information made public. The formula that they use to arrive at the price paid is confidenntial too, so we have to guess. It uses the spot price of nickel metal as a component of the formula.

In my estimates I allowed the profit margin for Jinchuan to be 25% of the price of nickel metal and other costs $4000US (from memory). These are likely to be far too generous; we know that at $10000US nickelprice the operation is still profitable, and AGMs cost around $5000, leaving less than $5000 for jinchauans expenses and profit. Probably 10% and $2000US is closer to the mark, but I wanted to be conservative.

Does that explain things?
 
Ghosta,

I too thought the announcement was good, however the market didn't seem to bother with it???? Strange???

AGM will add Melba Flats as an open cut mine to add to further production........all very good to me.........thought the announcement would have had a positive impact on the SP?

What did you think?
 
Can you remember the reaction to the Saxon discovery? Dont see a sudden peak on the graph immediatley following the announcement.
Yes it was dissapointing. I thought the share had changed, made the big time.
The truth is it hasnt. Its still an unknown share. Sure, lots more people know about it compared to 2 years ago, but in reality many of those that have heard of it dissmiss it as some junior company, very risky.
But this will change. Ive often said that it wont be till the first annual report following production. The only reason it will attract attention at that stage is it will be so unique in that it will be remarkably profitable.
Then it wont be ignored.
 
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