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
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- finally got some. very solid prospect.
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sally malay mining limited
etralite - finally got some. very solid prospect. Hi...
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