sir fundamentals , page-10

Interesting that most completely ignore some basic fundamentals such as :
Nickel prices at 6 month, 1 yr, 3 year lows latest 14,600 A$ per tonne. Steady downtrend in world prices & demand for last 6 month. LME stockpile at record high approx 120,000 tonnes, equivalent to almost 80% of Australia's total ANNUAL production. With many existing mines shut in or cutting back output while demand from China slackens as they turn to their own stockpiles more nickel discoveries, whatever the purported size & grade, are unlikely to be developed for some years. Remember any pickup in price/demand can easily be satisfied from existing mines capacity, not least the ex-BHP Ravensthorpe Nickel now owned and operated by First Quantum and on track to produce some 39-40,000 tonnes in FY12/13. BTW this mine, as every West Australian poster would know, is a lot CLOSER to Esperance than the Fraser Range/Nova discovery, contrary to SIR ASX Ann on 06 August.

Now what does all this have to do with the SP. Answer: nothing. The daily and ST SP and fluctuations are driven by emotion, sentiments of fear and greed leading to panic buying and selling , bot churning, and manipulation. Trading in any speccie penny dreadful is like passing a lit match from hand to hand,hoping you're not the one to get burnt fingers. So IMHO although I can't see any RATIONAL reason , based on fundamentals, for SIR SP to rocket from sub 5 cents to circa 90 cents if "irrational exuberance" takes hold and punters start buying with their ears pinned back we may indeed see $2 or $3 - who knows ?

Now far be it for me to dare suggest insider trading or market maniplulation but consider this however - SIR had cash at end June Qtr (per Appdix B Rpt to ASX) some $1.7 M. Current OPEX would be at least $25,000 a day all up (DDC is not cheap)so the company will exhaust cash within 60 days. Now we all, including the board of directors and management know this -i.e. SIR needs an urgent cash infusion. Here's a thought - why doesn't a substantial share and unlisted option holder take advantage of the ramp - oops rise - in the SP as follows :
1. Mr X buys more shares at market, a couple of mill would have started the SP moving, timed to co-incide with Ann to ASX re. Ni discovery.
2. AS unlisted options come into money (first the .20 XPs then the 0.60 XPs) a portion are exercised thus giving SIR a much needed cash infusion
3. Mr X then carefully offloads, in smaller tranches, the extra holdings he bought at the start of the run. Net result everyone's a winner - SIR has more cash, Mr X has made a motza, the LT SH are ecstatic as are the true believers and bot traders. Champagne all round.

If anyone has time I recommend the excellent books by Trevor Sykes - The Official History of Blue Sky Mines, - and The Money Miners - it's all happened before - shades of Tasminex and Poseidon Nickel which all ended in tears.

BTW I am NOT downramping to accumulate - I neither hold nor intend to buy into SIR - happy to watch the action from the stands. Good luck to all SH.

No investment advice expressed or implied. DYOR, DYODD