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Gold/Mining/Energy : Sudbury Saturday Night -- Nickel Mining & Nickel Prices -- Ignore unavailable to you. Want to Upgrade?

To: Anchan who wrote (357)	3/15/2007 3:25:15 AM
From: Anchan	Read Replies (2) \| Respond to of 9200

Ramblings on ASN.V -- I guess yesterday's rise of 25% reflects the fact that ASN are due to receive their mining licence "in the first quarter of 2007". Reminder #1 to self: They want to start production in 3Q 2008. Now they need to build their mine. And they have no money. (In their Dec2005 presentation they reported only C$1.7 m in cash). I expect a big financing right about now. Also: ASN did a PP on Nov 29, 2006 of 6.37 million shares at C$0.75. These shares are "subject to a four-month hold which expires on March 30, 2007". In Dec 2006, they had 69m shares out; since then, some options were granted to directors (Feb 13: 1.2m options at $1.10). Mmmh.... The share price has more than doubled since then. The stock seems to be held mostly by its top 10 holders (85% in Dec 2006) incl. directors (26% in Dec 2006) who might need some cash to pay for the Petrus and the Montrachet. The FS of Nov 2005 assumed about 1m tons of ore mined, producing 21,201 tons of Ni and 9,915 tons of Cu over six years. Corporate Case prices for nickel at $5/lb and copper at $1.15/lb; and thus calculated a value of Ni & Cu concentrate, delivered to port, of US$742/t. Also, the FS calculated revenues of US$166m/six years; from this, it deducted pre-commissioning costs of US$33m (only?) and operating costs of US$64m/six years to arrive at a net cash flow of $64m/six years. IRR at 51%; NPV @10 = $40m. Now, if present Ni and Cu prices hold, and given the likelihood that they'll increase their reserves... And I like that their nickel is in sulphides. Ni to Cu ratio of concentrates is 2:1. Nice project. But how will the stock fare? Reminder #2 to self: the period between mine financing and mine commissioning usually makes for sluggish share price movements. I think I'll wait to see what happens after those 6.37m shares come loose on the 30th; and also to see what the mine financing will look like. With no cash in hand, it ought to be biggish.