my earnings forecasts

For those who have not looked at AGM, below are my forecasts. Of course, feedback is always welcome given I am not an analyst. (But I passed grade 6 arithmatic).

AGM plan to produce 8,500 contained tonnes annually, which at US$23K or AUS$29K per tonne = $246M in gross revenue annually.

At $16K per tonne = $170M in gross revenue.

(Current price is US$40K per tonne).

Presentation of 31/5/06 forecast operating costs of AUS$63 per tonne of ore. It would be conservative to increase this to $80 per tonne.

At 1M tonnes of mined ore annually:

at AUS$63 = operating costs of $63M

at AUS$80 = operating costs of $80M

So at a nickel price of US$23K per tonne on $80 operating cost we $246M less $80M = operating profit of at $166M. At potentially 700M shares on issue we have EPS of 24 cents.

At nickel price of US$16K per tonne we get $90K in operating profit by 700M shares = 13 cents EPS.

Now currently nickel is trading at US$18 lb or US$40K per tonne.

On 27/10/06 the CEO of AGM, in the Q report, said whilst intuition and analysts expect the price of nickel to fall, the rate of demand growth and supply growth barring a recession, will see a shortfall of supply to 2010. So AGM are bullish on nickel prices.

In summary, on $80M operating costs, we have:

EPS of 13 cents at US$16K nickel price

EPS of 24 cents at US$23K nickel price

EPS of 34 cents at US$30K nickel price

EPS of 49 cent at current US$40K nickel price.