Two moly stocks: IGMI and AUA
Silver Stock Report
by Jason Hommel, Feburary 1, 2006.
Moly prices, as you know, are up in price nearly ten times, from $2/lb.
to $23.50/lb., hitting a recent high of $40/lb.!
75% of the annual use of
moly is in steel. As you may not have noticed or heard, steel
screaming upwards right now on anticipated high demand for steel
continuing from China.
Moly is typically a small cost
componant of steel. Or, it is a necessary componant of high moly
Thus, moly prices will likely move up more,
further, faster, than steel, as moly has already done! Thus, we
expect continued strong high prices for moly, greatly increasing
potential profits, and increased chances of permitting and mine
I personally believe that the moly shortage, and high moly
prices, are evidence of the beginning symptoms of hyperinflation, and
that this cannot be resolved except with much, much higher gold prices,
such as gold over $3000 to $10,000/oz. in 2006 dollars. At very
high prices for gold, more moly can be produced in many very low grade
gold/copper/moly projects that have much lower grades of moly than the
companies below. These are likely the very best moly
projects in the world.
Yesterday, Ken Reser wrote a great article explaining why he is bullish
on moly, and he promoted his moly stock Adanac, which moved up strongly
in price today.
This means that there's big money to be made in mining moly these days,
and there is growing interest from investors! Here are two of the
top, most advanced, moly mine projects, both with feasibility studies,
both looking for permits, both looking for just over $400 million in
financing to build a mine, and here's how they compare:
Idaho General Mines
36.8 million shares fully diluted (Jan 17th, 2006)-- after recent $3.8
million financing at $1.10/unit
$113 million Market Cap
million capital to build the mine
Grade: .11%-.09% moly/tonne, starting with .11% for first 5 years.
Production Cost per pound = $3.15/lb.
Ore Reserves: 1.3 billion
Expected Annual production: 35 million
pounds moly, for first 5 years.
(53 year mine life!)
From a Research
Report (Dec. 21, 2005)
51.3 million shares fully
diluted (Dec. 21,
@ $.84/share Cdn x .87 US/Cdn = $.73 US
$37.5 million Market Cap
Needs to raise $414 million capital to build
.06% moly/tonne x
2200 pounds/metric tonne = 1.32
pounds/tonne x $23.50/lb. = $31.02/tonne rock.
Cost to process the ore: $10.93/tonne milled /
1.32 pounds/tonne = Production
Cost per pound
Production Cost per pound = $8.28/lb.
Ore Resources: 270 million
Expected Annual Production at mill rate:
20,000/tonne/day x 365day/year x 1.32lb.tonne=
million pounds moly.
What kind of profits may be realized?
I'll assume IGMI raises $500 million at $10/share to finance the mine,
adding 50 million shares.
Assuming 100 million shares by then.
If moly prices stay at $23.50/lb. - cost of $3.15/lb = $20.35/lb profit.
35 million pounds of production x $20.35 = $712 million
At a P/E of 10, this implies a market cap of $7.1 billion / 100 million
shares = $71.2/share,
and IGMI is $3.07/share today.
am also bullish on zinc, which is also used in steel, and moving up
strongly in price, up to $1.06/lb.
See my recent report on the
silver/zinc company MMGG:
MMGG: Here’s why you will make a
fortune on zinc. (January 28th, 2006)
IGMI is also going to be drilling for
zinc on their Mt. Hope property, as they encountered two zones of
moderately high grade zinc as follows:
From 39 to 83 meters depth: 44 meters
(144 ft) assayed 9.1 % Zinc
From 129 to 144 meters depth: 15
meters (49 ft) assayed 9.3 % Zinc
Announces Drilling Plan for Evaluating Zinc Mineralization at Mount Hope
Wednesday January 18
For my prior articles on IGMI, see:
Final Disclaimer: I own shares of IGMI and MMGG, and nobody has
paid me to write this email. (I cannot sell any stock for at least one
week after a promotion such as this one.) My emails are now going
out to 18,700 email addresses, and the emails are opened by about 5000
people. Typically, about 1000 or less click on the links.
Excerpt from my article: Bible Verses on how to Manage Money
Diversify. Invest your money with wise and honest men
for the sake of safety, because you do not know what bad or unexpected
things may happen. Although there is no safer investment than
gold and silver in your possession; however, they can be stolen, so
invest with others, like mining companies.
Ecclesiastes 11:1 Be
generous, and someday you will be rewarded.
2 Give a portion to seven, and also to eight; for thou
knowest not what evil shall be upon the earth.