I found this thru another forum, a reply from Ian Levy to an...

I found this thru another forum, a reply from Ian Levy to an investor. I also thought this figure was meant to be confidential but if it's for real then this will take all the guess work out of calculating EPS and PE etc. Here's the reply from Ian....


Thanks Jim,

Our offtake agreement is fairly simple – we get between 70% and 75% of the contained nickel value in the nickel concentrates based on the LME spot price at the time of shipping the concentrates. We have no nickel metal price hedging in place and we are 100% exposed to the spot price.

Apart from a few notable exceptions, most of our peers in Western Australia typically get between 60% and 65% of the nickel price for the nickel in their concentrates.

The reason we get this 10% premium price is the high purity of our concentrates (+20% Ni) – something that stems mainly from the mineralogy of the ore and not just our operating skills. The WA mines typically produce nickel concentrates containing 6% to 15% Ni.

FINANCING: Now we have the equity component from Jinchuan, we can move to settle the bank finance. We are happy that our banks will not impose any mandatory hedging of the nickel prices.

We are “nothing but nickel” to a greater extent than our peer emerging nickel producer companies. But it is “nothing but building” the mill for all of us here right now – can’t sell anything until we produce concentrates.

Regards

Ian Levy
CEO