hang on - dont capitulate now, page-27

Bazz,

in reply to your query,i did reduce my holding,obviously by not enough as i kept some,i still don't know why,but made the MISTAKE of buying it all back before the last announcement,soley because of the ORE stockpile i had calculated that was sitting at Laverton plus the cash hitting the bank account from Shandong valued the plant and tenements at far less than nothing.I am no trader,just a value buyer with a cheap as buying attitude.
That value at times may vanish or arrive rather quickly.Hence i leave when there's a better option.

My sentiment on FML changed the moment this Shandong deal was announced.

However,the writedown and write-off of the Apollo pit and much if not all the ore as unmillable due to royalty costs knocked $40m off my FML valuation on top of what they have written off,not just the $20m or so they took up front on capitalised expenditure.Remember Apollo was a sequence over many miles and may have ended up as a superpit etc etc.

The ore,or what hasn't lately been trickled into the mill still exists,it is just worthless to mill at $1600 and is now no doubt considered site trash until something changes to make it otherwise.

I had taken the building of stockpiled ore of higher grade at Laverton as being a strategic move either to run thru BGSM after minorities were sorted or as an initial guaranteed higher grade ore supply for Barnicoat mill to pay for its recommissioning loans if any,with guaranteed ounces.
A company doing this does not have cashflow problems -period
Hence my stance throughout concerning the need for FML raising of capital.
That raises the question if these stockpiles were created rather because contracts had already been let for mining and rather than mill the ore mined and take the capital loss totally upfront,site trash was used to blend them down and so how long had this royalty issue been known and not disclosed by the board members?If any value can be placed on my suspicions the reduced milling times over the last year at BGSM may have more to do with them accommodating FML and FML's ability to supply cash flow positive ore for milling.

such is the cost of being half right in your research and calculations and filling in the gaps.

In hindsight i am only a holder now because i already hold the shares,otherwise given the lack of disclosure to date would be long gone.

Those viewing nickel as a godsend for FML need to look towards the large nickel projects coming online and the growing London Nickel warehouse stocks(storage of last resort because of cost) for an indication of its future demand and possibly even lower price.

With at least one 115-135 Kton/yr(time by 2240lbs to the ton) plant on ramp-up now (current expenditure to date over $5BN-Nickel is a dead duck with their particular costs based on US$5 a pound or less and with a 50-80yr highgrade 2.5% resource with 11%+++ iron content and another 200yrs with lower grade averaging 1.8%. That production when it hits the Chinese market,will kick the price down considerably IMHO and be close to doubling production from one of the largest nickel exporting countries in the world.

I Wouldn't touch a current nickel miner with a barg-pole as a result.Certainly any non-producer without off-take contracts at a guaranteed profit wouldn't make the grade.

as always DYOR+DYODD these are just my opinions,as they say a little bit of knowledge and lately visiting a commissioning plant as their guest-a dangerous mix.Normally being half right in my investments research has proved highly profitable,but not with FML and that has to do with lack of or selective disclosure IMHO by the company.

fitnfam
P.s. Fitty doesn't do it for me either--cheers