If 1.00 is the correct value why is that Zinifex has only received acceptances of less than 0.5%?
Secondly Allegiance's drilling result today at Viking is probably the best drilling result they have every had.
Tony Howland Rose has the runs on the board. He says given a few years he will find 4-5 Aveburys. The 10 drill holes at melba already indicate that Melba will be the second. Todays result at Viking confirms that the current Avebury resource is likely to be doubled over the next year or so.
Jinchuan reps told me that China will need an additional 300K tons per year of nickel by 2010, since Chinese are becoming more affluent. The Indians are close behind, so the nickel price will be firm for years to come
In the meantime AGM has a program current to double the output to 15000 tons a year. This is likely to come into effect in 9 months. Allegiance's production costs are 5500 per ton, (also take 25% off the LME ) and the nickel price is 26-28K a ton.
Just do your maths and see what the profits are likely to be 260m a year with a likely P/E of 10 to 1 => 4 times the present value
You would have to be nuts to sell now
Just have a look at Jubilee who produced 8500 tons a year last year. Xstrata paid $3b, which values them at 4 times AGM and all the analysts thought it was full value. What was the result. After all these months only 46% accepted the bid. That tells you that the clever people realise that you don't sell a valuable resource in a long term commodity boom
I don't know about you, but Allegiance is great long term investment
AGM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
