Thanks Sandra....I'll hold.
More on DD's stock from a newsletter I received (and other things Canadian for anyone interested):
TECHNOLOGY INVESTMENT PUBLISHER
BID.COM (BII-T, $7.60, +$2.10) The TIP scores with BII once more, as our
alert and hunch a few days ago proved to be very profitable. This could be
the beginning of something very mind-blowing. Take a peek at the Net sector
on the Nasdaq - YHOO up $70 today, AMZN up another $24, EGRP up another $20
- market caps are going through the roof. Sustainable or not, the Internet
is here to stay and it has been said that BII is one of the best structured
companies out there to capitalize on I-success.
Inlet (INS-V, 0.42) more accumulation and clean-up in the 40's. Staging for
a breakout. Offers were thin past 47c. Someone's loading up, you have to
wonder why?
Mighty Beaut (NI-Vancouver) Though based in the Philippines, Mighty Beaut
Minerals Inc. (www.mightybeaut.com) could be considered part of the
Australian wave sweeping the nickel industry. Projected to produce approx.
the same tonnage as Anaconda (referred to below), and at $.56/lb Ni, has to
be considered a serious threat not only to the current giants of the
industry but also to the "new Australians".
Australia challenges nickel giants
New Technology
By Paul Simao
Toronto - The world's largest nickel producers are casting a wary eye on the
development of three new Australian mines, which threaten to further
unsettle an industry shaken by crisis.
The nickel market was pummelled last year by slumping demand in financially
troubled Asian economies, undisciplined overproduction, particularly in
Russia, and the subsequent collapse of nickel prices to 11 year lows.
The imminent startup of the Murrin Murrin, Cawse, and Bulong laterite nickel
projects in Western Australia has added to fears that metals markets will
soon be swamped by a wave of cheap Australian nickel.
New Australian laterite production could add 9% to western world nickel
production this year, Australian research group AME Minerals Economics said
in a recent study.
Dry laterite is a thin, clay-like soil commonly found in tropical countries.
In the past, problems separating the nickel from residual soils, have made
laterite less economical to mine than the harder and deeper nickel-bearing
sulphides normally found in more temperate climates.
The Australians contend a high pressure acid-leaching technology, licensed
from Canada's Sherritt International Corp., will enable them to extract
nickel at a cash cost under $1 a pound.
The breakeven point in the nickel industry hovers around a cash cost of
between $1.75 and $2.00 a pound. Nickel traded at $1.96 a pound on the
London Metal Exchange on Friday, down from a 1997 high of about $3.75 a
pound, but up from a low late last year of $1.67. (All figures in U.S.
dollars unless otherwise indicated.)
"What it means is there is a new source of low-cost supply and that is going
to have some longer-term structural effects on the industry," said Michael
Masterman, executive director of finance and marketing for Australia's
Anaconda Nickel Ltd.
The Perth-based company's A$1-billion Murrin Murrin project, expected to be
commissioned later this month, is the granddaddy of Australia's burgeoning
nickel story.
Located 250 kilometres north of Kalgoorlie in Western Australia, the mine is
expected to produce 45,000 tonnes of nickel and 3,000 tonnes of cobalt in
1999, rising to 115,000 tonnes of nickel and 9,000 tonnes of cobalt by 2001.
It will be the world's fifth-largest nickel mine. With cash costs of
between $0.60 and $1.25 a pound of nickel, Murrin Murrin and its sister
projects, Centaur Mining and Exploration Ltd.'s Cawse mine and Preston
Resources' Bulong mine, pose a significant threat to the
traditional dominance of higher-cost sulfite nickel producers.
Mr. Masterman said industry leaders, such as Canada's Inco Ltd. and
Falconbridge Ltd. would find it difficult to compete with the lower-cost
Australians in an environment of falling or stagnant nickel prices.
Toronto-based Inco produces nickel at a cash cost about $1.40 a pound, while
crosstown rival Falconbridge has a cash cost of $1.60 a pound.
Neither company is running for the doors just yet. "Pressure acid leach
technology has been used in Cuba for a number of years, but it is yet to be
demonstrated to be commercially successful in the new generation of laterite
projects in Australia," Inco spokesman Jerry Rogers said.
Analysts also have raised red flags. In a damning report released in
November, Deutsche Bank warned of an unexpectedly higher cash cost for the
projects and slapped a sell recommentation on the shares of the three
Australian producers.
"[The technology] is still unproven, unreliable and not homogenous because
all three producers are using somewhat different floorsheets," said Terence
Ortslan of TSO & Associates in Montreal.
Australia's challenge to the nickel market comes at a time when industry
leaders, particularly Inco, face criticism over their unwillingness to
significantly cut nickel production.
Inco also must contend with the hangover from its massive $4.3 billion (Cdn)
Voisey's Bay development. The project has been stalled since last July when
talks between the company and the Newfoundland government failed to produce
an agreement on development of the prized mine.
Rueters |
