In today's Sydney Morning Herald there was a great article by Ross Garnaut on Chinese demand for base metals and in particular copper. It is an eye opener each time i read the facts of what is happening. Demand for Cu, Ni, Fe, Al, Zn will continue at high levels for a decade. It is well noted that by 2020 China will consume the current of what the whole world currently consumes today. Where is it going to come from ???
You can safely bet that a lot of it will come from WA and if it is nickel then it will come from Kalgoorlie and it will come from large world scale deposits such as the KNP. And will these large deposits be developed? You can bet your bottom dollar they will be. The nickel price was forecast to be falling. We are in the early stage of a US recession. look at where the nickel price is !! its around US$33,000 per tonne. So there is more than enough room to cover costs. Hence the KNP will be developed and if Heron is not subject to a takeover before development of the kNP then we need only look at Jubilee to compare share price potential. Jubilee only produced 10,000 tonnes Ni last year.
Heron is projected to be a 36,000 tpa producer.
Keep perspective. The resources sector will continue to thrive. Emerging producers will make big gains in 2008 and 2009. If the companies have the product and the expertise then they will develop.
My personal view using the projected possible nickel production for Heron in 2012, is a $15 plus share price. Have a look at what Lionore and Jubilee share price did over past 2 years.
Goodnight and good luck - keep your eyes on the game.
Hector
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