As I am extremely bullish on Nickel futures, RMI makes it an obvious choice for small punt… A market cap of 5million with almost 600k cash.
RMI owns a Wowo Gap Nickel Project in PNG which is 35Km away from Port. The ore can be trucked to port and directly shipped to China. RMI is focused on Nickel laterites which are generally shallow and cheaper to mine. Chinese processors have dramatically increased their demand for laterite ore since 2008 (+380%) which is mostly used to produce Stainless steel. There is no indication of it being slowed down. This is also used as an alternative of pure nickel and only 10% cheap in price. We all know the recent Indo band and the prices of nickel. Indo was the biggest supplier of this ore type.
RMI has a 72million tonnes indicated with a nickel grade of 1.03% and 52million tonnes inferred resource with a nickel grade of 1.09% (JORC 2004). What would be the value of this resource? Surely more than a market cap of 5million.
The company has announced an exploration target for DSO to be around 40-60 million tonnes with nickel grades of 1.6-1.8% nickel. The company is also in discussion with interested parties from Asia for developing the project…. May be a Jv or a corner stone investor… With Nickel being this hot, anything is possible….
RED FLAGS:
More than 2billion shares on issue… However, top 20 hold 74% and a Chinese investor holds 43% of the company.
They also have a court case for one lease out of three leases…
Cheers
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