time to short, page-14

To quote the Reports...

2007-q2
"Cash costs per pound of nickel at Miitel and Mariners were
higher due to lower nickel grades mined for the quarter,"

and the previous quarter,

2007-q1

"however cash costs per pound of nickel
increased due to generally lower grades mined for the
quarter."

So they are constantly mining lower grades. Grades are getting LOWER.


This is what is slowing their profit growth for now.

and mgale says

"Also again emphasize costs per unit go up when mining lower grades because they are spread out over less tons recovered."

But does not understand that this is the most critical aspect. A 10% reduction in grade means they have to mine 10% more.

Most of these companies are running flat out anyway. It has to flow through to lower revenues (assuming isolating the price variables).

So price offsets have to make up for LOWER GRADES.

A I had said earlier, the slightest jitter in the price of nickel and the speculators will be piling out the door.

The market depth is already starting to build on the sell side.