You're right, Idl.But there is a bit of nervousness and I'd be...

You're right, Idl.

But there is a bit of nervousness and I'd be lying if I said I didn't care that FML is almost 30% off its 12 mth high - and maybe I'm just trying to convince myself! - but in the end the fundamentals must come through.

Last night I was watching an old Peter Schiff clip again - speech to the Mortgage Bankers Assoc in 2006 when he predicted the sub prime crash - and something he said made me think about FML.

"It has to happen; the fundamentals are telling us what is going to happen... and you can't go against the fundamentals indefinately..." (or something like that).

I won't make another list about FML's fundamentals that everyone has heard many time already but I will list a couple of points that don't get much of a run on this board:

- Nickel was a big part of FML's future not too many years ago; it will be again.
- Nickel price now at an 18mth high/LME stockpiles dropping
- At current production/POG, FML is trading at a forward PE of about 5-6
- POG looks very strong and AUD solid as a rock at 1200+, a price higher than FML have ever received for gold sales
- LT trend for POG still up, even if it were to drop another 100 bucks
- Although the SP has and will be hit with any global shock, it is hard for me to see how FML - even though it is preceived a "risky spec" stock - can fail, particularly as the biggest threat to FML (POG collapse) seems unlikely whatever happens to the world economy.
- It has only been a few weeks that FML have been aggressively drilling (with 4 rigs). Expect frequent resource upgrades from now on.

Mental toughness is knowing what you are doing is right, even when you are not getting the results. So I bought another parcel today at 6c (and it promptly dropped to 5.8!)

Worst case scenario: FML only netts $200 p/oz - with no Ni production - still means $20M EBITDA in 12 mths time. Does anyone think the AUD POG is going to drop by $300-$400? That's what would have to happen for FML to get to that level. Does anyone think Campbell Baird lied when he talked about a mine life of 10-15 years last week?

Best case scenario: POG goes to ? (take your pick of Schiff, Armstrong, Sinclair, Rodgers, or Faber's numbers), China forces Ni back to its high (300% above current level) and FML doubles, triples or quadruples (or more) their reserves. What's FML worth then?

Anything can happen but, as far as risk management goes in these risky times, FML looks a very good bet at these prices.


End rant - DYOR Please


Cheers,


C12