Finally, Tony Howland-Rose at Allegiance Mining is seeing the...

Finally, Tony Howland-Rose at Allegiance Mining is seeing the fruits of 10 years of hard work. Mining operations are getting under way at the Avebury mine in Tasmania and drilling is turning up more nickel all the time.

We rate Allegiance a BUY, our normal cowardly caution overcome by London's Fox-Davies Capital putting a target price of $1.26 a share. (ABN AMRO's target, by contrast, is 89c.)

The company was formed in 1997 and Avebury was discovered the next year. The existing resource is 114,000 contained tonnes of nickel.

Allegiance's operation is underpinned by its relationship with the huge Jinchuan metals group in China. Offtake agreements between Chinese corporations and local producers (or emerging producers) are now common events.

But there was a twist in January. Jinchuan had bought some Allegiance shares in conjunction with the offtake agreement, but then two months ago picked up another 7.5 million of the company's stock. The Gansu-based nickel giant had never previously bought a second tranche of shares outside an offtake arrangement, with any company, before that.

In a development this week, Jinchuan has entered into a framework agreement with Metals X, the company run by well-known mining figures Peter Cook and Peter "Talky" Newton.

The Chinese are taking a $32.76 million placement in Metals X and have signed a framework agreement with a particular interest in the Wingellina nickel deposit in the Central Musgrave Ranges of Western Australia.

On the basis of that alone, we would be rather cautious with a call on Metals X. But the company has another very strong string to its bow: tin.

It is the country's biggest tin miner (which is not saying all that much given there is very little production of that metal here) but it owns the big Renison Bell mine in Tasmania, which is being brought back into production, and the historic Mount Bischoff turf, site of one of the world's richest mines until underground work stopped in 1914.

Tin and nickel, what a mix. The two hottest traded metals. Metals X has to be a HOLD at least.