Leveraged to the price of nickel

Oct 9th, 2009 – Comment

Lou, Can you please comment on Crowflight Minerals (CML-T) listed on Toronto stock exchange. It’s an operating a nickel mine near Wabowden, Northern Manitoba. Thanks, Rajinder Thompson, Manitoba. Hi Rajinder, Crowflight Minerals, Inc. ( CML TSX) has been steadily developing its opportunity at their Bucko Lake nickel property in Manitoba. They announced in June of […]


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Lou,

Can you please comment on Crowflight Minerals (CML-T) listed on Toronto stock exchange. It’s an operating a nickel mine near Wabowden, Northern Manitoba.

Thanks,

Rajinder
Thompson, Manitoba.

Hi Rajinder,

Crowflight Minerals, Inc. ( CML TSX) has been steadily developing its opportunity at their Bucko Lake nickel property in Manitoba. They announced in June of this year that they had achieved commercial production at the Bucko Lake Mine after spending $110M

The next couple of quarters will see the usual teething problems with the new operations at Bucko Lake. Its to be expected. The next stage for CML is to up output . Company management is confident that they can significantly increase production with another injection of what they are saying will be a small amount of capital.

CML has been able to raise capital to move their business plan forward and is currently raising $20M from Chinese interests.

cml1

The three year chart shows that the downtrend that started in 2007 has been broken and that CML has found support at $0.20.

cml2

The three month chart gives us a better view and indicates that the stock is testing support on its 200 day moving average so we want it to hold these levels or it may have to retest the lows.

The company has control of their destiny in terms of expansion of Bucko Lake and their other targets in the Thompson Nickel Belt in Manitoba and the Sudbury basin in Ontario. What they don’t control is the price of nickel.

nickleFrom the five year chart for nickel we can see that there was a huge spike to $25 and that the downtrend has been broken. There is resistance at $10 which suggests that CML will have to wait for demand to pickup to get more leverage from the commodity.

For a $0.20 stock with an operating mine that has low operating costs, expansion opportunities, other development properties that you are getting virtually for free, investors willing to buck up eight figures in private placements to buy into the opportunity, and a seven year mine life, I think the potential rewards outweigh the risks.

MAKE IT A BIG THANKSGIVING AND HAPPY CAPITALISM!

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