The dilemna for AGM is that Jinchuan get 100% of offtake at...

The dilemna for AGM is that Jinchuan get 100% of offtake at approximately 70% of the spot price. Jinchuan have an agreement that they get ALL of the offtake so AGM could not hedge at high prices when the nickel price was above $50,000 in May. If the spot price is say $25,000 when AGM start producing, AGM will get $17,500 per tonne.
If you plug those numbers in, AGM are not going to make 100M a year NPAT in 2008/09 which will be their 1st full year's production. It will be more like $85M or EPS of 11c. Put them on a P/E of 7 and you get a fair value of 77c. Certainly higher prices will be justifiable if they increase production beyond say 12,000 tonnes a year but to do that they will need a second ball mill commissioned. This will all take time so perhaps the $1+ share price is a long way off now. Time will tell and the market will judge but as nickel gets closer and closer to $25,000, the blue sky in AGM disappears somewhat.