The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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The resource ranks AMC among the largest undeveloped nickel sulphide companies in the world having 155.1 million ore tonne resource contained within four deposits. Containing recoverable nickel, copper, cobalt, platinum and palladium, the average nickel equivalent grade is 1.02%. The total nickel equivalent tonnage is 1.58 million tonnes.
Totally agree 8adger.
I can't wait til this really takes off. I know it's a pointless post but for those who have been around for so long this will mean a great deal. GLA.
Key parties involved in discussions with AMC will be well up on this. They need to be up and running to meet demand or miss the opportunity. New appointment designed to drive this through and bring it home.
Some of the useful passages (at least to my mind):
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"The bigger challenge, speaking very frankly, is that if we don’t get our skates on as an industry and have a measured reply response we’ll run the risk of end users starting to look at substitution,” Mr Bradford said."
[and]
"Mr Bradford said fears Indonesia may fast-track its ore ban had stoked the upward move in nickel, but the rise in prices has been a long time coming given the mismatch between growing demand and mine supply not only to feed current uses in stainless steel, but longer term use in electric car batteries."
[and]
"People are starting to project those deficits forward and the conclusion is that we’ve got an emerging squeeze on nickel and you’re starting to see a price response as a result of that."
[and]
"If you believe that demand is going to grow as a result of the rise of electric vehicles, and that would be our house view, then the world is going to need more nickel from hard rock mines over the next five years."
[Continued]
But Mr Hissey said investors needed to be aware that it could take some time for higher prices to filter through to the bottom lines of nickel miners.
“The nickel price may have spiked in the last month but that may take six months to fully translate to a company’s financial statements because of the timing of when you ship something versus the price and when you get the cheque for it.”
He said he preferred Independence Group, which also produces gold, over Western Areas as its Nova mine is relatively new and its minelife could be extended if there was success in exploration around the project.
“I also think being a little more diverse in having a share of Tropicana, the gold mine, does provide a little more investment stability for people who may have to wait a year for the exploration success but you get the benefit of the gold earnings.”
[Continued]
“If end users have the prospect of a continuing supply deficit and higher prices then they’ll start to think about whether they can make stainless steel with less nickel, can we make electric vehicle batteries with less nickel.”
The spike in prices comes amid speculation Indonesia may bring forward an export ban that was planned for 2022. Australia's northern neighbour, which converts lower grade ore into nickel pig iron (a feedstock into stainless steel production), is keen to derive more value from its resources and build its industrial base.
“Indonesia for a few years now has been attempting to develop its downstream processing industries and not export too much in terms of raw commodities,” said Sean Fenton, portfolio manager at Sage Capital.
“They have certainly upped the ante in nickel.”
The spike in prices has lit a fuse under listed nickel producers, with Mincor Resources and Independence Group recently climbing to their highest levels since 2015. The stocks are up 59 per cent and 40 per cent respectively this year, while Western Areas is up 24 per cent. Investors will be looking for nickel price insights when Western Areas and BHP report profit results this week.
Mr Bradford said fears Indonesia may fast-track its ore ban had stoked the upward move in nickel, but the rise in prices has been a long time coming given the mismatch between growing demand and mine supply not only to feed current uses in stainless steel, but longer term use in electric car batteries.
“We’ve seen a bit of price spiking in the last week or so on the back of some more recent news, but the overall thematic is that we’re not making enough nickel to satisfy demand and that’s been the case for three-and-a-half years now,” Mr Bradford said.
“People are starting to project those deficits forward and the conclusion is that we’ve got an emerging squeeze on nickel and you’re starting to see a price response as a result of that.”
Mining analysts say it is hard to forecast the short-term outlook for the nickel price given the uncertainty about whether the ban will be brought forward. However, nickel prices are expected to advance over coming years given a lack of higher quality mines needed to provide the raw material for electric car batteries.
“Everyone has a view that nickel will edge its way higher over time because there is a shortage of these hard rock mines, and there is a shortage of mothballed old hard rock mines globally that can come back online,” said RBC Capital Markets analyst Paul Hissey.
“If you believe that demand is going to grow as a result of the rise of electric vehicles, and that would be our house view, then the world is going to need more nickel from hard rock mines over the next five years.”
But Mr Hissey said investors needed to be aware that it could take some time for higher prices to filter through to the bottom lines of nickel miners.
[...]
Another interesting article:
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"Nickel booms as supply deficit looms"
https://www.afr.com/markets/equity-markets/nickel-booms-as-supply-deficit-looms-20190816-p52hvt
One of Australia's leading nickel producers has warned that a failure by the industry to find new supplies may encourage end-users to look for alternatives as the threat of an Indonesian export ban and forecast deficits propelled the stainless steel input to a near five-year high of more than $US16,000 a tonne.
Nickel prices have proved immune to the volatility that has hobbled global stockmarkets and many growth-sensitive commodities over the past two weeks, with speculation major producer Indonesia may bring forward a ban on the exports of raw ore sparking a scramble for the metal at a time when inventories on the London Metals Exchange are at their lowest since mid-2015.
The rush for metal reshaped the nickel futures curve over the past week. Analysts pointed to a short squeeze as the front-end of the curve – or near-term contracts – moved into backwardation, meaning traders pushed cash prices higher than later month prices in order to urgently get their hands on the metal. Cash nickel prices have surged from a low of around $US11,500 a tonne in mid-June and last traded at a $US22 a tonne premium to three-month nickel. In early July, cash nickel was trading at a $US90 a tonne discount to the three-month contract.
But Independence Group chief executive Peter Bradford warned a sustained rise in prices over coming years – given forecasts for a deficit in the market of as long as a decade – may force consumers to seek substitutes to a metal expected to ride the growth in electric car batteries.
“The bigger challenge, speaking very frankly, is that if we don’t get our skates on as an industry and have a measured reply response we’ll run the risk of end users starting to look at substitution,” Mr Bradford said.