tipping, page-3

Jacoba1 when I first saw your prediction of $2.50, I though no that’s a bit rich!

It would mean AGM had a market capitalisation of 1.75 billion, which is near the figure announced by the company as the value of its sales with Jinchuan over an 8 year period.

Well a lot has happened since the agreement, the amount of nickel available has doubled and so have nickel prices.

And both have not peaked yet!

The market is starting to factor in higher prices for nickel in most existing nickel producers- it hasn’t done this for AGM as yet…..perhaps it wont be to mid next year, in which case your figure may be a little early.

But market analysts (and therefore the market) have not yet realised that published figures for demand from China in the future are way out. Demand could be double these estimates well into the next decade.

This excess demand wont be driven by the rural population moving into the cities- yes that demand will still be there. The increased demand will come from the Chinese Governments gigantic program to improve rural infrastructure.

Analysts have not yet acknowledged that this massive program is being planned as we speak. There are snippets coming out now, 17000km of new railways etc, but the full extent of this program seems to be unknown.- to a degree because its still being planned, but also I suspect its not being widely advertised by the Chinese as they scramble to tie up new sources of raw material.

But it will not be a “secret” for too much longer. Such a program can go from planning to implimentation in China without delay- no lengthy planning permissions, environmental impact statements etc which in the west hold up projects for years.

At the end of the month is a Conference being held in Shanhai- The China Nickel 2007 Conference, the theme of which is “Is there enough metal to support China's growth?” (30th - 31st May 2007. Grand Hyatt Shanghai) .

With nickel supplies so tight now, how on earth can there be enough nickel to satisfy the demand in China?

$2.50 by the end of the year is not a Target I laugh about now.