jubilee a nickel plated target, page-2

Using JBM targeted production figures
US$30000/tonne as Nickel price
Annualised cash cost of just over $US4/lb *2204 = US$8816/tonne
Cash flow before tax/depreciation/administration/exploration: US$21200/tonne

Targeted expanded production
To June 07: 8633 tonnes – cash flow: US$183 million
To June 08: 13000 tonne – cash flow: US$275 million
To June 09: 16250 tonne – cash flow: US$344 million
To June 10: 17500 tonne – cash flow: US$371 million
To June 11: 20000 tonne – after cash costs: US$424 million

At A$14.50 JBM Market Capitalization is A$1.9 billion or US$1.6 billion (X rate 85c)

Market Cap/Cash flow multiple:
2007: 8.74 – current PE approx 9.5 allowing A$200 full year profit.
2008: 5.8
2009: 4.6
2010: 4.3
2011: 3.8

Now I know there are variables here:
Where is the Nickel price going?
Where is the A$/US$ exchange rate going?

I think we can be fairly confident of JBM’s forecast production and costs.
Cash cost currently higher then US$4 for the previous two quarters and this current one – due to transition to new production centres --- but still in full year 2007 were close to $4.

I hope my maths is correct --

From a TA point of view – or at least mine you wouldn’t be in a big hurry to buy – but fundamentally there are god reasons to hold. No advice intended here – just points for discussion.
Nickel is obviously on the nose, as are nickel producers/explorers --- but unless the world rolls over into some massive recession – Who knows?

From Jim Sinclair this morning: http://www.jsmineset.com/

“That blast of liquidity must be created to avoid a flash fire coming out of the present failure of OTC interest sensitive derivatives internationality.
The result of all this is inherent in its application towards a significantly lower US dollar and significantly higher base and precious metals prices.”