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Gold/Mining/Energy : Canmine resources -- Ignore unavailable to you. Want to Upgrade?

To: dave brown who wrote (1899)	9/16/1999 8:06:00 AM
From: Marshhawk	Read Replies (1) \| Respond to of 2769

Well, it's September and time for the annual Metal Bulletin Ni conference. Long time followers of the thread will remember that last year's conference brought such stunners as: The Australian Laterite Nickel Revolution. So this year, amazingly, we're getting the same bs. One year of no production, massive financing costs, cannibilization of capital equipment for financing, forward sales gone wrong and near fatal gas leaks has had no effect on the drivel these people put out. Interestingly, one presentation was from John Corr, finance mgr at Bulong. He says Bulong cash cost to be $2 for Ni with Co production, $1.75 without Co production, and that laterite cost of cobalt production is $6-7. MB says that Bulong has US 185 mil of bond debt at 22% interest. If this is not a typo on their part, that is 41 mil a year interest. Do the numbers yourself. If Bulong gets up to full production of 8kt Ni pa, thats a cash cost of 1.75 + 2.32 in interest cost per year, or slightly north of $4, absent royalties, taxes, marketing, shipping. As laterite refineries don't need replacement equipment, especially as they're having to run them at higher T and P than expected, we don't have to worry about depreciation, right? And we don't have to worry about the hole they dug last year, and continue to dig, with mounting interest costs and short sales of Ni for 18 months. Factor all that in and factor in what their actual cost of production is and what do you think their all in C3 cost is, $8, maybe $6.50 with cobalt credits. As the old saying goes, anyone can sell a dollar for 95 cents. Read some ancient (1996) history. INCO broke the union in 96 with a lockout. Union caved in 2 weeks. Questions: 1) is it the same union leadership this time 2) does the union membership currently think caving in 96 was a good idea 3) what is the likelihood that the union will be pussies again? One more Inco question. Can Tobin read a price chart? Does Tobin have political intelligence in re problems at Norilsk and Laterites? Any chance he raises the smelter issue again? Could INCO publicly admit that the problem in smelter construction, is not the price of Ni, but that they overpaid for a smaller than expected ore body, and that they don't have enough ore left at Thompson to support Sudbury smelter? [yeah, sure they will]. Do a risk reward for N vs CMR. Is N undervalued? Yes, but by how much? Does anyone anticipate N doubling in a year? Does anyone anticipate CMR doubling?