A Moly Stock Comparison

Silver Stock Report

by Jason Hommel,Jan 5, 2005


After my email yesterday, "Silver Stock Picks for 2006," http://www.silverstockreport.com/email/Silver_Stock_Picks_for_2006.html
one man posted that my moly stock is not the highest grade out there, "as I claimed".  Well, I claimed that this is the largest, highest-grade moly play, "the highest grades, and lowest costs, of any MAJOR MOLY project".  Others with higher grades that I know of are extremely tiny operations, maybe in the few million dollars worth, not tens of billions, and are hardly worth considering.  And others that may be larger have grades of perhaps 1/10th as rich.  I do not know of any other moly opportunity that is both larger and has higher grades.  That's what makes this opportunity the best and most likely moly project to be financed and be developed.

A big money man that I know asked me to "look into Northern Dynasty" since they have lots of moly, too.  Well, I don't normally look at anything other than silver stocks, but since I'm in this moly company, and since comparisons are what I do, let's compare.  After all, how do you know what you have unless you have a basis for comparison?  Also, the free market is all about competition!  And I love competition, as I thrived on it as a successful ski racer in my younger days...

In Sum, Northern Dynasty has a market cap over ten times as much, with moly grades 1/7th as rich, with rock tonnage that is less well drilled and defined and worth less than half, and a capital cost for mine development that is from 1 and a half to 2 times as much that of my moly stock.  In other words, there is no comparison: my moly stock wins on all measures, hands down, and here are the details:

My top moly stock:
30 million shares fully diluted
$1.46/share U.S.
$43.8 million market cap.

The capital cost to build the mine: $415 million?

What is the "proven and probable" rock worth?  $54 tonne rock.
0.11% moly x 2200 pounds/metric tonne = 2.4 lbs moly/metric tonne x current moly price of $22.5/tonne = $54 tonne rock.
Mine life of 53 years! (1.3 billion pounds of moly)
Aiming to produce over $2 million dollars per day, or nearly $800 million per year, at a cost of 15% of that.

Northern Dynasty:
84 million shares fully diluted
NDM.V $6.30/share x .86 Usd/Cdn = $5.41/share
$455 million market cap.

The capital cost to build NDM's mine: $600 to 800 million?

What are NDM's "inferred" rocks worth?  $24.9/tonne rock
From the homepage at
http://www.northerndynastyminerals.com/ndm/Home.asp
gold g/t = .3 = $5.05/tonne
copper % = .27 = $12.44/tonne
Moly % = .015 = .33/lb/tonne x $22.5/lb. = $7.42/tonne
Total: $24.9/tonne rock

How much will NDM produce per year?  I don't think they are far enough along to know that yet, since that kind of information comes from a feasibility study, which they don't have, but my moly stock does have.

Advantages of my moly stock:
1.  A market cap of 1/10th that of Northern Dynasty
2.  Moly grades 7 times as high as Northern Dynasty
3.  Rocks over twice as valuable.
4.  Resources that will soon be in the "Proven and Probable reserves" category (once the drill core confirmation data is presented) not the "inferred" category of NDM's, which need to be drilled out a lot more, just to be upgraded to the "measured and indicated" status.
5.  A capital cost to build a mine of $415 million, not $600 to $800 million.

So, I really think my moly stock is the best and most likely opportunity to make ten times your money in a stock, over about 1-3 years, as permitting takes place.
 
So, what are the conditions that set up this moly stock opportunity for us?

1.  The Project was drilled out decades ago by a major oil company (oil companies need pipelines that require moly!) but moly prices collapsed for decades; and so the project lay dormant.
2.  We have dramatically and rapidly rising moly prices in the last year and a half that caught everyone off guard--and many still expect moly prices to collapse.  (And even if moly heads back to $10/pound, this project is better than Northern Dynasty, and is very profitable at even $7/moly prices.
3.  Over a year ago, I heard of a moly opportunity, because I was promoting silver stocks successfully.
4.  The company acquired the project recently, just over a year ago, with some of my initial investment at $.40/share, so it's still new to the market.
5.  It took me about a year of due diligence to figure out how wonderful my initial investment had become.  Tthe acquisition was a success, which does not always happen when companies raise money for that purpose.  Then, I initially promoted this in August, 2004.
6.  That promotion was so successful, I had to shut up about it for nearly 4 months now, because the company was trying to determine a price for it's fourth private placement, and it can be dangerous if a new company raises money at a price that is too high.
7.  You found me and got on my email list.  That is also a rare event...  so few people are interested in silver stocks, as follows:  There are almost 300 million people in the U.S., and only about 100 million households.  Of those, about half, 50 million have brokerage accounts.  SSRI is one of the top silver stocks in the world, and I'd expect that more than half of all investors who are aware of the opportunity of silver own it.  SSRI has about 30,000 shareholders, making perhaps 50,000 silver investors.  You are perhaps one in 1000 investors who are interested in silver.

Of the perhaps 50,000 silver investors, my email list is read by perhaps 5000 people, of the 18,000 emails sent, or only one in 10 silver investors.  So, you are perhaps one in 10,000 investors in the U.S.

You are one in 10,000 U.S. investors, who are being presented with this opportunity...

I would buy more of the stock myself, but I never put more than 10% of my portfolio into any one stock, no matter how great I think it is.  And if the stock outperforms, as I expect, then I'll be required to sell to diversify prudently, and it will be a struggle to be patient enough to "hang on for the ride".

One man who took the moly mine tour with me back in August, 2005, said there will probably never be any reason to sell his stock, as the dividends will probably be outrageous.  He, also in his 30's, suggested that we'd probably own the stock well into our 70's, and that we'd return to the still-active mine site as old men and say "I remember when this huge pit was a mountain..."

Oh yes, the company has not paid me to promote their stock.  And if you still don't know the name... well, you can look for my past emails, or search at google.com for it, or save time and just sign up to the look at my portfolio at silverstockreport.com

For the record, I have about 110 subscribers now, paying $40/month, which is about $4500 month, or $54,000/year.  But since I own over 430,000 shares of my moly stock, I made $120,000 just today, "mark to market", unrealized capital gains in my IRA account, by watching my stock move up 24% since last night's promotion, wherein I did not even mention this stock's name.  It was the most money I've ever made "just from one email", but a lot more went into this than that...  I've been doing this for years now... working hard, long after I could have chosen to be selfish and retire; instead, I considering this as my ministry.

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Excerpt from: Bible Verses on how to Manage Money
http://www.bibleprophesy.org/goldismoney/biblemoney.html

Your wealth has a purpose.  It is not for your personal luxury.  So, do not live extravagantly to excess.  A Rich man built barns for his money, for a plan of laziness, and it was all taken away.  Another rich man lived extravagantly, and ignored the poor, and was taken to hell.  But having riches was not the problem, because having wealth is not incompatible with being a disciple of Jesus.  A rich man was a disciple of Jesus.

Proverbs 23:20-21 Do not join those who drink too much wine or gorge themselves on meat, for drunkards and gluttons become poor, and drowsiness clothes them in rags.

Proverbs 21:17  Heavy drinkers and others who live only for pleasure will lose all they have.

Luke 12:15-21  Then he said to them, "Watch out! Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions."  And he told them this parable: "The ground of a certain rich man produced a good crop.
He thought to himself, 'What shall I do? I have no place to store my crops.' 
"Then he said, 'This is what I'll do. I will tear down my barns and build bigger ones, and there I will store all my grain and my goods. 19 And I'll say to myself, "You have plenty of good things laid up for many years. Take life easy; eat, drink and be merry."
 "But God said to him, 'You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?'
"This is how it will be with anyone who stores up things for himself but is not rich toward God."

Mark 10:24-27   The disciples were shocked to hear this. So Jesus told them again, "It's terribly hard to get into God's kingdom!
It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
And they were astonished out of measure, saying among themselves, Who then can be saved?
And Jesus looking upon them saith, With men it is impossible, but not with God: for with God all things are possible.

1 Timothy 6:9  People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction.

There is a purpose for wealth. For increasing the Kingdom of God.

1 Timothy 6:17-19  Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share (communicate-KJV). In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.

I know many of you like my communications.  Thank you so much for all of your encouragement and blessings!

Sincerely,

Jason Hommel
silverstockreport.com
bibleprophesy.org