Interesting little company. Did a series of asset swops to leave them with half of the 4th largest Nickel deposit in the world.
The deposit itself is in the Philippines has been known about for 30 years but due to low prices and lack of demand in the Far East it was never exploited. With the explosion in demand from India and China the nickel price has climbed from $2 to $6.50 but oddly enough is still considered low.
The final approval stage for exploitation is just about to be approved and extraction will begin. The company already has one contract with a Japanese smelter and is in discussions with smelters in a series of countries.
Nothing clever about the operation, as the ore is of sufficiently high grade, they dig it up and ship it out. Infrastrucure is already in place for operation.
TMC is currently priced at 18m, the initial Japanese contract is worth 4m and each additional contract will hopefully be at this level or greater.
Final approval turns the company into a producer and each additional contract simply increases their size.
The management is tight with cash and has some good quality mining skills onboard.
The Philippine government is fast tracking the final approval and the company says it expects it shortly.
One to hold for approval and through the series of RNS's as more contracts are won. Company should be worth 50m in 6 months and 100m in 12-18 months.
Buy it, ignore it, just pointing this one out.

Interestingly I see that Snowden's are due to produce the JORC next quarter - could make good reading!!

Post from AFN :


Mister X - 30 Oct'06 - 12:58 - 10930 of 10930


Nice announcement from Atlas early this morning:

Atlas Says Nickel Exports May Rise to 1 Million Tons (Update1)
2006-10-29 22:01 (New York)


(Adds share price in fifth paragraph.)

By Luzi Ann Javier
Oct. 30 (Bloomberg) -- Atlas Consolidated Mining &
Development Corp., a Philippine miner, will export as much as
90,000 dry metric tons of nickel this year, and could raise
overseas sales to 1 million tons by 2008.
The ore, extracted from the Berong nickel project on the
island of Palawan, south of Manila, is estimated to contain 1.9
percent nickel, according to company statement issued Oct. 27.
Exports would be between 80,000 and 90,000 tons this year, and
620,000 tons next year, it said. Berong is a joint venture
between Manila-based Atlas, London-based Toledo Mining Corp.,
and Sydney-based Investika Ltd.
Metals companies are scouring the globe to secure supplies
of raw materials to feed rising demand, particularly from China,
the world's fastest growing major economy. The drive comes as
the Philippine government aims to attract $6.5 billion in
investments to help develop the nation's mining industry.
The Lisbon-based International Nickel Study Group forecast
a 10 percent jump in demand for the commodity this year to 1.37
million tons. Three-month nickel futures, which have more than
doubled this year, settled at $31,000 a metric ton on the London
Metal Exchange on Oct. 27.
Shares in Atlas, which earlier rose as much as 1.3 percent
to 8.1 pesos, were unchanged at 8 pesos at 10:54 a.m. in Manila.
The stock has gained 40 percent this year compared with the 29
percent climb in the Philippine Stock Exchange Index.
Atlas, which was the world's third-largest copper producer
from 1979 to 1984, said in September it was targeting exports of
as much as 90,000 dry tons of ore this year, although ``actual
sales will be dependent on weather conditions.''
The company said in February that it was in talks to sell
nickel and cobalt to potential customers in Japan, China,
Australia and Europe.

--Editor: Lloyd-Smith

Story illustration: See {LME } for three-month London Metal
Exchange prices, and {LMEI } for LME warehouse inventories.
For top commodity news, see {CTOP }.

Moving up today

I hear rumour that Chris Kyriakou is supposed to be coming to the UK sometime next week. Lets hope its to make the announcement we've all been waiting for. Just found out its AGM time so that probably answers that.

Big X trades today, and at increases prices. Along with this was some other large trades to make up a sharp increase in volume and a breakout end of day.

Therefore, one can assume we should be looking at good news flow in the coming weeks.

Here is an approximation of resource valuation that TMC is sitting on in Palawan. BERONG 275,000,000 tonnes at 1.5% nickel which is equivalent to 4,125,000 tonnes of pure nickel valued at 35,000 per tonne. This is worth 144,375,000,000 times 56.1% equals 81 Billion approx. IPILAN formerly Celestial 75,000,000 tonnes at 1.5% equal to 1,125,000 tonnes valued at 39,375,000,000 times 52% equals 20.5 Billion approx. They also hold a58% stake in ULUGAN not yet fully quantified. Assuming that the MPSA WORKS OUT AT 50% each, tmc's share would be worth 81 Billion PLUS 20.5 Billion times 50% which is 50.75 Billion. Working on the assumption that 2008's figure of 1 Million tonnes production based on the above figures. 1 Million times 1.5% equals 15,000 tonnes at 35,000 times 56.1% times 50% which equals 147,262,500 income before overheads divided by 27,548,333 ordinary shares in existance equals capital growth of 5.34 per share per annum. Projected operating costs at outset where estimated to be 55.2% before cobalt credits, again no estimate for value of this. Operating costs would then be approx 2.94 per share per year. As to the true value of each share, if you took 10 years turnover you could be looking at 53.40 per share. If you used only 10 years profit you could be looking at 29.40 per share. At these production rates the resource would be productive for 350 years. PLEASE DONT GIVE ME ANY FLACK OVER THE ABOVE FIGURES AS THEY ARE CALCULATIONS BASED ON FACT BUT REFLECT HOW I SEE THE COMPANIES WORTH. I would be intrested to hear any thoughts others may have and I hope this helps soul traders who was asking last week.

Impressive figures Oily!

Very interesting projection! What has been the average price of nickel over the past ten years?

What is your valuation of Central China Goldfields Mr Rag ?

Off the top of my head a lot more than the 12 million market cap current valuation. I havnt done much research on this, but I purchased my first holding in ggg last Thursday as I am expecting some good news soon. The copper mine in Tibet is reputedly worth about 2.1 Billion before costs, that is 600,000 tonnes at 3,500 per tonne. Gold at $630 per ounce, times 1,300.000 ounces estimated in current holdings could be worth 433 Million at current prices, only downside at the moment is that they are not yet actual producers. I think the skies the limit. However that is purely my estimation and offers no guarantee of future growth, you pays your money, you takes your chance. If you were to estimate 50% production costs 2,100,000,000 plus 433,000,000 times 50% equals 1,266,500,000 divided by 82,000,000 shares equals approx 15.44 per share, this would have to be diluted by time as there are no annual production targets known. I hope you find this satisfies your need Mr Noony.

Yes phil thank you very much!

Sorry gents, just found a major flaw in my tmc calcs, whilst looking up copper prices on London Metal Exchange, I noticed prices quoted in dollars not pounds. These would be main changes to above calcs based on this info. Substitute the following 81 billion for 43 billion, 20.5 million for 10.8 million, 50.75 billion for 26.8 billion, $35,000 for 18,515, 147,262,500 for 77,901,862, 5.34 for 2.82, 2.94 for 1.56. I do appologise for my amateurism but it was a genuine mistake not intended to mislead. Halifax asked about historical nickel prices, LME are prepared to sell this info for 20,000 a price that I am not prepared to pay, sorry.

Thanks anyway. Do you know what is the arrangement between TMC and the smelters in Japan? Is the ore to be sold unpurified or does TMC retain ownership and then sell the processed nickel?

I believe that the initial bulk sample is sold straight from the ground at about 20% of the london metal exchange price for nickel. To build a PAL purification plant would cost in the region of 1 Billion. It would be a few years before tmc would be in a position to afford this, unless they further dilute to raise capital or they go into partnership with another party. I believe the Phillipine government would prefer to sell the nickel after it has been treated and maybe this might be the stumbling block that has been holding up the MPSA. Whatever the outcome I shall be staying in there for the time being as there probably isnt a better bet on the market at the moment. Tomorrow is AGM may be news then.

From AFN :


"Tiggy2101 - 22 Nov'06 - 19:54 - 11498 of 11501

Here are my notes from today's AGM

1)As per the news release, all resolutions were passed. George was in attendance and the following notes were made from the slide presentation (in no particular order).

2)GB said consisderable progress had been made and processing for the Special Mines Permit had been completed while the company await the MPSA which was very good news. The SMP would allow TMC to mine without the MPSA. The SMP would be valid for one year and can be renewed on an annual basis. There was no reason to get hung up on the MPSA

3)Berong had a project life of 30 years and Celestial would come on stream this time next year in 2007. They were half way through the test and evaluation stage on Celestial.

4) The weather had caused problems due to the wet conditions in the Philippines and a second road would be built (The Dangle Rd). This would be a "all weather road" and allow seven to eight trucks to operate continually around the clock. The company will now have two roads and two options for shipping.

5) GB estimated that the 1st bulk samples would be shipped around the 10th of December. The company will be paid for the samples but at a discount. There should be no issues regarding the shipped samples. He also went on to say there would be enough cash to fund commercial production.

6) The trestle conveyor (1 klm in length)will now be situated at the end of the new road. This would allow the company to ship 25,000 tonnes a day compared to 6,000 tonnes a day using barges

7) It was interseting to note that BHP wanted a 100% of the nickel ore, however they will get 50% and the balance sent to other customers. I had the impression that demand would not be an issue in the future and small chinese smelters would take the lower quality ore.

8) There is also a major study under way to look at the different methods of processing the ore. These are as follows

HPAL
Vatleaching
Ferro Nickewl Smelting
Ammonia leaching
Hi Smelt
Other

The company will consider each process depending on the ore type.

9) Looking at nickel prices through to 2008, the price of Nickel should hold up well. There may be some reduction in price levels to around 22,000 at tonne.

10) GB did emphasise the importance of Environmental health and safety issues. TMC are in the process of implementing ISO 14001 AND ISO 018001. These standards have never been seen in the Philippines before and really set the bench mark. There appear to be a lot of cowboys operating mines in the Philippines so theses standards put TMC in a league of its own.

11) The Philippine govt do not want to see companies operating DSO's for the next fifteen years or so and at some point the ore will be proicessed on site in order to maximise value both for TMC and the govt. I thought this was a very important point to mention.

It was nice meeting George and I was very impressed with his presentation. I realise there has been further delays, however I am sure the company will deliver in the long term. I continue to hold and may add in the future


Good luck to all
Tiggy"

From The Times today...

In the know

Rumour of the day
Toledo Mining added 1p to 126p on word that it was poised to secure a permit allowing it to start commercial mining of the Berong nickel project in the Philippines, the fourth-largest undeveloped nickel deposit in the world. Toledo is said to be in advanced negotiations with major customers to supply the metal, with BHP Billiton lined up to buy at least half the output.

http://www.timesonline.co.uk/article/0,,748-2471107.html

Thanks someuwin.

Oily, thanks very much for your calculations.

One question: are not TMC shipping ore, which commands a lower price than the refined metal? I'm not sure they'll get $30k a tonne for just the rock.

S.T. see my entry 90 of 95, the rock that they are shifting at the moment contains approx 1.5% nickel. Therefore 30,000 tonnes contains approx 450 tonnes of pure nickel normally worth 450 x 22000 = 9,900,000. However the samples are being sold at 23% of the current market price which should fetch us 2,277,000.

News leaked to the Financial Times on Saturday about Special Mines Permit, I wonder if the market makers are going to mark it up before trading.