I talked to Gary on Friday. We talked about McWatters and he had a sample of Hazelwoodite which he and our geologist were talking about. He pulled out the portable analyzer and it read 19% Ni. It looks somewhat like Mica because that is what the geologist thought it was. I think its neat that we are finally getting down to the high grade ore. Not that we are mining it but even that some samples are showing up.
I found out that we get advanced 75% of the Ni value and so in Feb we should start seeing some of the final settlement dollars.
It's funny, I was reading an S&P report on a stock and I read the outlook for next year and they said the following:
Sub-Industry Outlook
"Our fundamental outlook for the diversified metals & mining sub-industry (in which copper companies dominate) for the next 12 months is positive, as we believe sales and earnings will rebound in 2010 from the depressed levels we project for 2009.
Our expectation reflects our view that aluminum, copper, nickel, zinc, iron ore and coking coal prices will rise in 2010, due mostly to a forecasted recovery in demand and less abundant supply. Based on the S&P forecast for 1.8% global GDP growth in 2010, vs a forecasted 2.2% decline in 2009, we believe the worlwide demand for base metals will rise from 2009's depressed levels. For example, we expect that global copper demand in 2010 will likely increase by 4%, versus an estimated rise of 0.3%in 2009. In our view, demand from the U.S. (the world's second largest consumer) will cease declining in 2010 on an expected 1.2% rise in total construction and a 4.6% increase in homebuilding. Also, we believe that mine production will rise less rapidly in 2010, and we expect that metal exchange inventories will decline from 2009's elevated levels. Partly offsetting the forecasted demand increase and inventory decline will be some likely easing of the strong demand from China in 2009, which we think reflected stockpiling rather than increased consumption. Through the first eight months of 2009, China's apparent demand for copper rose a torrid 47%. For 2010, we look for an average copper price of $2.90 a pound, versus an estimated average price of $2.33 a pound in 2009.
Longer term we believe that secular demand for copper and other base metals will increase. In our view, the industrialization of China and India will lead to greater demand. At the same time, we believe production of copper and other base metals will increase less rapidly than demand, as output at existing mines is exhausted and fewer new mines come into production. Consequently, we think that the copper price at the next trough will be higher than the $0.71 of 2002. Also, the next market peak should result in copper prices reaching a higher average level than the average price seen in 2007. Also, we believe mining industry consolidation will help lift prices.
Year to date to November 6, the S&P Diversified Metals & Mining Index rose 193.5%, versus an 18.8% increase in the S&PO 1500 Composite Index and a 35.5% gain in the S&P Materials Index. In 2008, the sub-industry fell 75%, while the S&P 1500 declined 38.2% and the S&P Materials Index decreased 46.8%. Leo Larkin"
