Well you have a legitimate question there joeljp.
I look at it this way.
If AGM stopped exploring and its sole activity was to mine the 100000 tonnes of nickel now estimated to be in Avebury over ten years at todays prices, we could expect AU $2.5 billion in profit. This would generate around $250m yearly in profits, around 39c per share each year for 10 years, then zero. Im no expert on net present value, or internal rate of return calculations, but Id think each share at $1 would be a good investment.
But Avebury dips down to the west and could well contain more nickel. Better!
In AGMs mining leases there may be another Avebury sized deposit which will require some investment to find.
Lets say they spent $10m per year for 10 years to find it and stuck paydirt. Then we are looking at 37c per year for 20 years. Even better. There may be no other Avebury sized deposits at all, we dont know, but the chances are good that there is at least one (there could be 10!). AGMs management think they could have 3 in 3 years time but is this just an educated guess.
So $1 may be just good value or it may be a bargain! It still could be good value if the nickel price drops substantially.
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