AGM - Allegiance Mining

[chops_a_must]

Read my first post on this page. You will see where the 61 comes from.

NPAT is also after TAX. I havn't missed anything. If there is something else I have missed please point it out. Freeballing you seem to only like stocks that are in production. AGM will be in production soon. Your limiting yourself by only looking at stocks in production. AGM will be an assurity into production so if you work out the figures early there are lots of profits to be made. I was in at 36..but I still think investors buying now will see rewards. My figures were based off Nickel at $30,000 a tonne and nickel is $45,000 a tonne. Also AGM have allready onsold their nickel to Jin Chuan group.

Personally I think AGM is pricey and I can't see it doubling as chicken says unless there is a re-rate on the entire sector.

You could add in other costs apart from the mill, but they are small change really. The unknown I would say would be the debt levels/ potential further dilution. Big cash positions and low (for MCR no) debt to me justify the higher market cap for similar production levels. As well as the security in current production, as opposed to new mine development risk.

But given these are pretty much the same production figures as elsewhere, with similar costs, I guess we will have to agree to disagree here and say that many companies in the sector are undervalued (if prices hold).

But like I said earlier, the ball is really in the court of those maximising production right now, and SMY is in the best position to do that.

 

[chris1983]

Personally I think AGM is pricey and I can't see it doubling as chicken says unless there is a re-rate on the entire sector.

You could add in other costs apart from the mill, but they are small change really. The unknown I would say would be the debt levels/ potential further dilution. Big cash positions and low (for MCR no) debt to me justify the higher market cap for similar production levels. As well as the security in current production, as opposed to new mine development risk.

But given these are pretty much the same production figures as elsewhere, with similar costs, I guess we will have to agree to disagree here and say that many companies in the sector are undervalued (if prices hold).

But like I said earlier, the ball is really in the court of those maximising production right now, and SMY is in the best position to do that.

Other costs were quoted in my previous post. They were total operating costs given from one of the AGM presentations. See below.

1. Marketing Yr 1: 28,800tpa concentrates (+20%Ni) = 5,700tpa Ni
2. Yr 2+: 43,000tpa concentrates (+20%Ni) = + 8,500tpa Ni
3. Milling Simple 900,000tpa ball mill & flotation with 80-84% recovery
4. Cost setting Mining A$35/t, Milling A$20/t = Low operating costs
5. Overheads & Marketing A$13/t , Total C1 Opex A$68/t ore

The total cost is $68/t ore

Below is how I worked out the 61 million dollars operating costs

Now to work out the companies profits we have to work out yearly tonnage and operating costs. Easy way to get an estimate of this is that the ball mill can handle 900,000tpa.

900,000 x 68 = 61.2 million dollars

I know you guys are set on MCR maximising profits right now etc etc..but AGM have their agreement sign sealed and delivered with Jin chuan group and no one knows what the agreement with Jin-chuan was but it was supposedly amonst the highest paid for nickel concentrates. Thats why I worked out my figures based off only $30,000/tonne instead of $45,000/tonne which is the current nickel price. The agreement is a US$2.2 billion offtake agreement & partnership with Jinchuan Nickel Group, China. Seems good to me.

They also continually find new deposits in their licenses and the resource is just going to get bigger and bigger. How big will the resource get? It could double for all we know. They could then upgrade the ball mill capacity if they really wanted once they get a larger resource. Things are just looking good for AGM. They have a large mine there and it could get even bigger.

Anyway bed time Work tomorrow. Take it easy fellas.

 

[joeljp]

Chris, I think you've done more than what's required of you in justifying your P/E and calculations. If others can't see that AGM is only a matter of months away from being a significant nickel player then that's their problem. They might have forgotten that MCR, SMY were an AGM not very long ago. It's true that AGM's cap may appear expensive pre production but have they looked beyond that? Have they looked at what additional resources have turned up recently? What about all the other drill results that all happened to be just around the main Avebury mine?

 

[chicken]

Personally I think AGM is pricey and I can't see it doubling as chicken says unless there is a re-rate on the entire sector.

You could add in other costs apart from the mill, but they are small change really. The unknown I would say would be the debt levels/ potential further dilution. Big cash positions and low (for MCR no) debt to me justify the higher market cap for similar production levels. As well as the security in current production, as opposed to new mine development risk.

But given these are pretty much the same production figures as elsewhere, with similar costs, I guess we will have to agree to disagree here and say that many companies in the sector are undervalued (if prices hold).

But like I said earlier, the ball is really in the court of those maximising production right now, and SMY is in the best position to do that.

Mate,we are not intrested in what you think..PERSONALLY, but what the true figures are...and what I think is also not important...Chris pointed that out through his figures...NOW, that is Important and makes sense...what you think...well...I think you have an Agenda..what is it...do you want to buy cheap shares...I wonder....????

 

[chris1983]

Looks like a lot of debate is going around in regards to the points being raised in the next upcoming annual general meeting. Ill just add in what I think and give a summary of what is going to happen at the meeting.

So In summary we have some options and shares being voted upon by share holders. See below.

Jin Chuan - Granted 7,500,000 fully paid shares

EMPLOYEE OPTIONS - 4,478,000 Employee Options

OPTIONS TO CONSULTANTS - 5,500,000 options

ISSUE OF NEW SHARES

"That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be given for the Company to issue such number of fully paid ordinary shares in the Company up to but not exceeding 15% of the number of fully paid ordinary shares in the Company on issue at the time of the new issue on the terms and conditions set out in the Explanatory Statement accompanying the notice of this meeting."

MR ANTHONY HOWLAND-ROSE, DIRECTOR - 5,000,000 Employee Options

MR DAVID DEITZ, DIRECTOR - 5,000,000 Employee Options

MR EDDIE LEE, DIRECTOR - 1,000,000 Employee Options

MR BARRY SULLIVAN, DIRECTOR - 1,000,000 Employee Options

So all up just under 21 million options and 7.5 million fully paid shares to Jin Chuan are being issued.

In regards to the 7.5 million shares to Jin Chuan this was arranged earlier on the 14th Feb. See below for those who aren't sure about the 7.5 million shares and what price Jin Chuan is paying for them etc.

"Allegiance is pleased to announce that the Jinchuan Group Limited has all governmental permissions in place for the placement of 7,500,000 shares at A$0.53 per share to raise A$3,975,000 (as announced 15 January 2007).

These funds have now been received and the shares will be issued. We are pleased that Jinchuan is one of our larger shareholders and we look forward to ever closer co-operation with the world’s fastest growing nickel group for the mutual benefit of both parties. On completion of this transaction Jinchuan Group Limited will hold 4.7% of the ordinary shares of Allegiance Mining NL."

So thats another 4 million in cash from Jin Chuan and is a huge confidence boost to have future support from an extremely large company (China based I might add).

In regards to the 21 million option what is the exercise price of the options though?? That’s the question to ask. If it brings the company in money I don’t care what happens. Yes it looks like the Directors are all giving themselves a pat on the back..but why not? This sort of thing always happens in companies. As long as they bring me the rewards in increasing the SP and progressing the company I dont care. They obviously think everything is going great and it has been for me. Almost a 150% gain in 5 months and I don’t think the gains will just stop. Put this away longer term and as they ramp up towards production further rises in the SP will occur. That’s my opinion.

Investors were all having a cry and moan when BMN directors issued themselves shares and options when the SP was a lot cheaper than what it is now..I'm not 100% sure what the SP was at the time as it was awhile back. Point is..if the company continues its success..dont worry about these issues. The figures have been worked out in regards to their profits etc etc and it looks good. A mere 21 million oppies is not going to change their profit outlook and future.

 

[chops_a_must]

There are two comments I have Chris. Firstly, it is quite clear they are going to dilute this year, possibly up to a total of 15%. Which, on current prices would take them past the likes of MCR on market cap, without them having done a thing, or paying dividends. Strange, considering their production will be very similar.

Secondly, the placement with consultants I wouldn't be happy with. How objective could their results be now? We have already had a downgrade of contained nickel from above 50,000, to below 40,000, without adequate explanation. It looks to me like the ghosts of Poseidon might be coming back.

Chicken, cheap shares or not, I wouldn't be buying this now because with the shares on offer, it doesn't leave enough room for share price appreciation. Which is how holders make money.

 

[chris1983]

There are two comments I have Chris. Firstly, it is quite clear they are going to dilute this year, possibly up to a total of 15%. Which, on current prices would take them past the likes of MCR on market cap, without them having done a thing, or paying dividends. Strange, considering their production will be very similar.

Secondly, the placement with consultants I wouldn't be happy with. How objective could their results be now? We have already had a downgrade of contained nickel from above 50,000, to below 40,000, without adequate explanation. It looks to me like the ghosts of Poseidon might be coming back.

Chicken, cheap shares or not, I wouldn't be buying this now because with the shares on offer, it doesn't leave enough room for share price appreciation. Which is how holders make money.

Chops..you keep mentioning Poseidon..did you get burnt with this stock? AGM is not Poseidon

downgrade of nickel? to below 40,000 tonnes?

They released their latest resource upgrade to contains 158,000 tonnes Ni in resources. Now if you cant believe the facts that are presented..I guess thats your own problem to deal with? If you dont believe what they report then just don't buy the stock..its simple. What is SMY and MCR's total nickel resources? I;m at my girlfriends so I cant do too much research atm but I think AGM's resource is larger than SMY's and AGM's is all in the one area. They continue to find more resources only KM's away from one another. I have made 150+% on this stock..I don't know why your so negative on it.

 

[chops_a_must]

No, but the chairman was a geologist there.

"However, Allegiance said that due to its adoption of "more stringent resource classification procedures", some of the resources at Avebury that were previously included in the indicated category had been reclassified as inferred resources.

This brings its ore reserves at the mine to 38,900t contained nickel in 3.35Mt of ore at 1.16% nickel with an 0.85% nickel cut-off grade. Last year, the company estimated it had 51,000t of contained nickel at the same cut off grade."

 

[chicken]

Chops-a-must...you got your figures wrong...there was an upgrade to 158000tons....like your posting, you throw things around...negativity...for what is your Agenda...but to buy cheaper shares...look at figures posted by Chris and then you get the idea...like your posting on HC...all very doubtful postings with NO figures but your personal opinions...give us facts not fantasy,.....I am holding...and certainly will not sell on your postings....

 

[chops_a_must]

Yes, but that includes inferred and indicated numbers. Mine are the best stab at indicated numbers I can find.

For instance, Sally Malay has 58,000t of indicated nickel at one of its mines. No-one is valuing it on it's inferred numbers of nearly 200,000t.

 

[chicken]

Read their 2nd last anouncements...Its all there of what AGM has actually got in tonage..158000 tons...and there is more drilling and more NI being found....Avebury is the new Ni province...Chops-a-must...we are posting about AGM here as far as other NI miners please post there

 

[chops_a_must]

It is all there isn't it Chicken?

Proved at 0.4%, 64,000t.

Proved at .7%, 49,700t.

Proved at .85%, 38,900t, Previous was 51,000t.

Ok. So IF new nickel is being found, as you say, what's with the ~25% write down in provable nickel?

 

[chicken]

So, Chops...that makes it PROVEN...152600tons....the operative word IS PROVEN...right....that is right....so where is your problem....

 

[chops_a_must]

So, Chops...that makes it PROVEN...152600tons....the operative word IS PROVEN...right....that is right....so where is your problem....

No, that is the total amount above each grade.

The 64,000t above .4% would be inclusive of the 49,000t above .7% etc.

 

[chris1983]

hmm whats all the big debate over?

Total Resources at Avebury 16.27 Million tonnes @ 0.97% Ni 240 ppm Co
contains 158,000 tonnes Ni in resources.

I just got home and I see arguments regarding grades etc etc but they have allready worked this out to be very profitable so whats the deal. Fact is AGM is rising and will continue to rise as long as they continue to expand their resource. They believe it to be a new nickel province. Nickel is also onsold to Jinchuan.

Sallay Malay have nickel resources in total to

Nickel Resources
Sally Malay Project = 56,600 tonnes
Lanfranchi = 54,300 tonnes
Copernicus = 6,300 tonnes

AGM's mine is going to be very low cost chops..You have to realise this. I dont see what all the fus is over..to me SMY look good..but so do AGM. I mean both stocks have given great gains over the past year.

Some good points for AGM below.

Very low operating costs due to:
– Large size (10m-40m wide), simplicity & continuity of the shallow orebody
– Conventional metallurgy; simple ore, consistent recoveries & grades
– Availability of low-cost hydro power, infrastructure & near to port
– +80% recovery at 1% Ni
– Aveburys 20%-plus nickel concentrates will define a new global benchmark.
As our metallurgists put it,they are Nothing but Nickel.
– Low-grade ores (0.6% Ni) produce high-grade Nickel Concentrates at
72% to 76% recovery

Below is an image I thought was good to add. It shows comparisons between the operating costs for companies located in WA and Tasmania. These figures have probably changed slightly because this was taken from one of the presentations almost a year back now. It still gives a good indication of the cheap operating costs for mining companies based in Tasmania.

Now the only thing I could think to be negative of AGM is if you dont believe what they are reporting..which is how I see your views since you continually refer to Poseidon. I mean if they are telling lies..then yes we will all get burnt but I base my stock picks from what companies report and the facts that are presented.

 

[ta2693]

Why not invest in GUL instead of AGM? Basically they are the same business with different name. Refer to the GUL's half year account and yahoo finance, GUL hold 5.4% of AGM i.e. 24494022 shares Which is also the main asset of GUL.
The ordinary share issues of GUL is 125931551 which mean 1 share of GUL equals to 0.195 share of AGM which is about 16 cents. But you can get in market at 7.8 cents which means you pay half price for AGM's share by using this GUL as agent.
one more interesting thing to add, the director of gul is also the director of agm.

 

[nizar]

Why not invest in GUL instead of AGM? Basically they are the same business with different name. Refer to the GUL's half year account and yahoo finance, GUL hold 5.4% of AGM i.e. 24494022 shares Which is also the main asset of GUL.
The ordinary share issues of GUL is 125931551 which mean 1 share of GUL equals to 0.195 share of AGM which is about 16 cents. But you can get in market at 7.8 cents which means you pay half price for AGM's share by using this GUL as agent.
one more interesting thing to add, the director of gul is also the director of agm.

Thanks for sharing that ta2693.
Chart looks great.

 

[ta2693]

This is actually first identified by The prophit. There is a lot of smart guy inside this forum, the research quality all together is not second to any investment bank.
I just read the 2006 report and confirm his conclusion. GUL is a good vehicle to invest in AGM.

 

[chops_a_must]

hmm whats all the big debate over?

Sallay Malay have nickel resources in total to

Nickel Resources
Sally Malay Project = 56,600 tonnes
Lanfranchi = 54,300 tonnes
Copernicus = 6,300 tonnes

Because these figures from SMY have to be compared to AGM's proven reserves of 39,000t. You couldn't produce at 20,000t a year like they are going to do on those figures...

We aren't valuing SMY on their inferred reserves, so why should it be different with AGM? Why the 25% write down in proven reserves?

 

[chris1983]

Because these figures from SMY have to be compared to AGM's proven reserves of 39,000t. You couldn't produce at 20,000t a year like they are going to do on those figures...

We aren't valuing SMY on their inferred reserves, so why should it be different with AGM? Why the 25% write down in proven reserves?

Dude seriously waste of time to keep debating it. AGM has been very profitable for me..thats all I got to say. I think the profits will continue. lets wait and see what they are in 6 months time.