potential price, page-5

Nickel production was up 300% last year

FY06 RESULT
FY05
FY06
% CHG


Nickel in ore (t)
1,079
4,445
+312.0

Check out what Huntley says about the nickel project here

"New MD Rod Baxter is keen to put his stamp on proceedings. CSM has showcased a raft of changes underway after a recent mine visit. Focus is shifting from manganese and chromite to nickel, the growth engine of the company. The five year strategy is to grow annual production from 5,000t to 15,000t. The company’s 33% holding in Jabiru Metals (JML) will add some copper and zinc exposure. The investment has performed well, tripling this year. It’s now worth $61m or 27c per CSM share. While we think the manganese and chromite businesses will provide steady cashflow for reinvestment, we are far more comfortable with the larger, more transparent nickel, copper and zinc markets.


It seems we’re not alone in our preference for nickel with takeover rumours flying. The company this week confirmed it had received an approach to enter into confidential discussions. The advance is only preliminary and no discussions have taken place. Any move on CSM at this stage would be opportunistic. The company is still recovering after the market’s faith was rocked by departed MD Michael Kiernan and a deterioration in manganese prices. CSM's nickel strategy is taking shape but it will be a few years before the Kambalda mines hit their straps. The exclusive right to an ore sorter within a 100km radius of Kambalda is a competitive advantage. The sorter upgrades ore by 20-30%, improving margins particularly for low grade deposits. This would be icing on the cake for a predator with low grade nickel resources. We maintain our Hold recommendation awaiting the outcome of takeover discussions. CSM is still in a turnaround phase but increasing base metals exposure could generate interest."