value of agm, page-4

To Andrewe

******From AUZ announcement ....Development on the 01C surface at the 380 level in the Blair Deeps has
intersected massive sulphide mineralisation (assays up to 11.4% Ni) located in the expected structural position of the B01C shoot. No resources currently exist for the B01C shoot in Blair Deeps and the occurrence of this mineralisation at the 380 level suggests the B01C shoot may be re-appearing in Blair Deeps.....What do you think 11.4% Ni did for AUZ on this announcement? Nothing! That announcement was cluctching at straws.*****

From Priest: You missed the point. If you carefully read todays drilling report and understand that the takeover laws
prevent otherwise permissable interpretations, the 17m at 1.7 etc will add 25% to the Avebury resource. To compare todays result to the AUZ shows that you do not understand the geological continuity and are trying to confuse others


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.
*****where is the independent analysis stating that?*****

From Priest: Rose has the nickel runs on the board. In 2001 when Nickel was USD4000 a ton he told me that the world has got it wrong and nickel will be far far greater for many years to come. the only reason he did not find 4 or 5 Aveburys till now was money. That is no longer a problem


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
*******where is the independent analysis stating these revenues are likely?*****

Zinifex has done the analysis and that is why their first bid was 1.00. If you would spend some time with Rose, you would understand why the shareholders trust his analysis
$5-$10



You would have to be nuts to sell now
******youwould have to be nuts to trust management that didnt get an independent report to verify all the things they are telling you.*****

From Priest: I have trusted them since 3 cents so who is nuts, you or me? the Beards have always come up with the goods.

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
******please use relevant comparisons JBM had been profitable for 7 years and have a resource 3times that of AGM and a profit of $250 million and paying dividends. how are they comparable to AGM other than they both produce nickel?*****

From Priest: Well ABN Amro in their penultimate report did oompare them with JBM ( see AGM website) and came up with $2.66. JBM may have been profitable for some years, but after 7 years of production, JBM ONLY delivered 8500 tons last year. So what use is their larger resource, if they cannot produce it and make money from it??? JBM overtalk and underproduce. AGM undertalks and overproduces

AGM is already putting place the mill upgrade to produce nearly DOUBLE JBM's output in about 9 months.