At a time when we hear nothing specific from our company, I have re-posted a President's message to Hard Creek Nickel shareholders. Simply read what this President says for the outlook on Nickel as they see it and realize that these same statements apply to us as well. (It's highlighted)

Cheers

http://www.mineweb.co.za/mineweb/vie...

Hard Creek Nickel - President's letter to shareholders

Tuesday , 27 Jan 2009

It's a perfect storm.

The credit crunch in the world financial system has led to a worldwide recession and a collapse in commodity prices. In equities, there is nowhere to hide. Financing has become expensive and difficult to get. I have never seen more difficult conditions for junior resource companies in my entire career.

How is Hard Creek Nickel Corporation weathering the storm?

The good news is that we have money. In early 2008 it became evident that major downward trends in commodity prices were brewing so we adjusted our development spending. As a result we still had approximately $5.3 million (unaudited) in the bank as of the end of December 2008. We have recently established a new budget which enables us to continue operating without having to secure any additional financing until the end of 2010. We could also make additional adjustments to stretch this well into 2011.

As with all large mining projects, Turnagain project economics are very sensitive to commodity prices. Nickel fell from a high of about $24 per pound to the current price of about $5 per pound within less than a year and a half.

According to our most recent engineering report, a Preliminary Assessment prepared by AMEC Americas Limited in December 2007, the Turnagain project has positive economics at a base case nickel price of $7.50 per pound. At current nickel prices the present plan for the Turnagain Project is not showing positive economics.

We are still moving forward developing the Turnagain Project for several reasons.

We don't expect nickel prices to stay in the basement forever,

Our resource is in the form of nickel sulphides, and

We are optimistic that further metallurgical and process engineering work can further reduce our production costs.

The case for nickel.

We have good reasons for believing that nickel is bound to go higher. At current prices several producing nickel mines have shut down or cut back (including Ravensthorpe, Mount Keith, Falcondo, Cawse, Lockerby, Loma de Niquel) and planned projects have been delayed, for a total cut in estimated 2009 production of more than 250,000 tonnes of nickel. (Source: Macquarie Research) These supply cutbacks should allow nickel prices to climb back quickly when demand returns to its historic growth pattern.

Most of the large new nickel projects awaiting development are lateritic deposits, which are more difficult and expensive to process than sulphide nickel deposits like the Turnagain. Average cash costs for existing and financed laterite deposits are about $5.50 to produce a pound of nickel, so roughly $10 a pound nickel would be necessary to generate adequate financial returns. (Source: Brook Hunt & Associates Ltd.) So for new sources of nickel supply to come to market, prices must move higher.

As the supply side is being constricted, the demand side of the nickel equation is expected to rebound. Governments around the world including Canada are seeking to stimulate their economies and provide employment. A large part of the stimulus is expected to be spent on infrastructure. China has already announced $600 billion in infrastructure spending at the federal level alone and America's new President is expected to announce large scale infrastructure spending as well. This infrastructure spending increases demand for base metals to such an extent that the market could move from the current oversupply to supply shortage more quickly than most pundits think.

The plan for Turnagain.

Turnagain is a nickel in sulphides deposit, which means that the contained nickel can be concentrated using traditional froth flotation technology. This simple fact is the basis of our belief that the Turnagain deposit will prove competitive with lateritic nickel deposits in the long term. A major part of our budget and focus over the next year will be on optimizing mineral dressing and evaluating various low and medium temperature acid leach technologies to further upgrade the concentrate before shipping. The idea is to move further down the cost curve and to increase our competitive advantage over the large lateritic nickel deposits.

Part of this program involves determining the viability of the Activoxtr technology as the hydrometallurgical process to extract nickel and cobalt from the Turnagain deposit concentrate. This work will be conducted by Norilsk Process Technology (NPT), located near Perth in W. Australia. The technology was developed by Lion Ore, a company which was then acquired by Norilsk Nickel.

At this time no additional drilling is required on the property. Although the deposit has potential for expansion, a large resource with over 580,000 tonnes of recoverable nickel has already been identified. The project has potential to produce 20,000 tonnes (44,000,000 pounds) of nickel per year with an estimated mine life of 29 years.

We are continuing to gather baseline environmental data, but have delayed the start of a full scale Environmental Assessment until nickel prices turn around.

We are continuing our efforts on working with two First Nations that have land claims in our project area. We have successfully concluded a Cornerstone Agreement with the Kaska Dena and are working on a more comprehensive agreement with them. We are also working on a Memorandum of Understanding with the Tahltan. Consultation and negotiations to date have been conducted in an atmosphere of mutual respect.

In short, we are taking the steps that are necessary to prepare our project for a turnaround in commodity prices. The scale of our project means that, when the turnaround comes, the leverage offered by our company will be phenomenal.

Mark Jarvis, President