finally got some. very solid prospect., page-5

etralite - finally got some. very solid prospect. Hi extralite,

SB2000 has had another uneducated stab at an explanation. May I attempt to answer your question....

* There is a world shortage of Nickel and this shortage is forecast for some years yet so no collapse in the price should be reasonably expected by anyone.

* SMY has approx 25% of production hedged at A$15800 which is 20% higher than required by the financiers

* spot Ni price last night was just under $A20,000 so the 75% unhedged can benefit from an even higher price when production begins in August 2004

* the average hedge volume over the next 5 years is 17% correspondingly 83% unhedged.

* Loads of money in the bank and debt facilities are in place

* COnstruction all unschedule and no apparent risk to production timetable

OK with all this good news why, I hear you ask, has SMY been trading down around 70c. The following may provide some insight:

- most Ni stocks are down 10-20% from highs of Q4 2003

- we have investors (funds) who bought stock at 29c in Aug 2003 and some have been taking profits

- the NPV of the project is around $0.70-$1.00 depending on Ni price & currency assumptions

- they had a very good response to the Share Purchase Plan (70% take-up) at 64c and I suspect some profit taking is occurring

- Day traders are active in our stock

- they raised an additional $15.3m in Nov/December which added 24 million shares to capital base which is dilutionary but this has provided us with a strong capital base.

Overall what is important to remember is that the market capitalisation of the company has grown from $4million in March 2001 to $100million today, they have financed the project and will be producing Ni in Q3 2004 with significant upside in the project