Idaho General Minerals
Silver Stock Report
by Jason Hommel, Jan 18,2006
IGMI: my moly stock
Idaho General Mines (IGMI) is the name of the moly stock that I have been promoting in the following articles/emails.
Idaho General Mines, IGMI (OTC)
Symbol is IGMI.OB at Yahoo! Finance.
Phone: (509) 838-1213
The stock, IGMI, gained up to180% since the start of my promotion on Jan 5th, from $1.18 to high of $3.30, and is now on a dip to $2.25.
Several people asked me to compare my company, Idaho General, to Adanac. Ok.
IGMI has a lower cost to mine the moly: $3.50/lb, vs. $8.28/lb., and IGMI is expected to produce over three times as much moly per year, while each has about the same capital costs to build a mine, just over $400 million. IGMI is clearly the better stock to finance if you had $400 million to invest, and here are the details:
Idaho General Mines (IGMI.OB)
36.8 million shares fully diluted (Jan 17th, 2006)-- after recent $3.8 million financing at $1.10/unit
$83 million Market Cap
--needs to raise $415 million capital to build the mine
Grade: .11%-.09% moly/tonne, starting with .11% for first 5 years.
--Production Cost per pound = $3.50/lb.
Ore Reserves: 1.3 billion pounds moly.
Expected Annual production: 35 million pounds moly, for first 5 years.
ADANAC GOLD CORP (AUA.V)
http://www.adanacmoly.com/ --they have a chart of the moly price on the front page. Save this link.
From a Research Report (Dec. 21, 2005)
51.3 million shares fully diluted (Dec. 21, 2005)
@ $.58 Cdn x .86 US/Cdn = $.50 US
$25.6 million Market Cap
--needs to raise $414 million capital to build the mine
--Cost to process the ore: $10.93/tonne milled
--Grade: .06% moly/tonne
.06% moly/tonne x 2200 pounds/metric tonne = 1.32 pounds/tonne x $23.50/lb. = $31.02/tonne rock.
--Production Cost per pound = $10.93/tonne / 1.32 pounds/tonne = $8.28/lb.
Ore Resources: 270 million pounds moly.
Expected Annual Production at mill rate: 20,000/tonne/day x 365day/year x 1.32lb.tonne= 9.6 million pounds moly.
Now, if you were going to invest $400 million, would you rather produce 35 million pounds/year at a cost of $3.50/lb., or would you rather produce 9.6 million pounds moly at a cost of $8.28/lb.? There is no comparison. IGMI has the better project. IGMI also has nearly 5 times as much moly in the ground: 1300 million pounds at IGMI's Mt. Hope, vs. 270 million pounds at Adanac. IGMI also has numerous other moly properties in the company that I have not featured. Mt. Hope is merely the best one.
Since I have promoted IGMI, I have received a few frequent questions:
1. How can a "bulletin board stock" raise over $400 million, which can be difficult enough? IGMI is seeking a Toronto listing, and then, probably an AMEX listing. Further, although raising $400 million to build a mine was difficult in the past, during the bear market in commodities, it is getting much easier to raise such money as this bull market in commodities continues. Also, raising $400 million should not be difficult if the company can earn over $400 million per year as follows:
35 million pounds x $11.50/pound profit (at $15/pound moly) = $402 million dollars annual profit.
35 million pounds x $16.50/pound profit (at $20/pound moly) = $577 million dollars annual profit.
35 million pounds x $26.50/pound profit (at $30/pound moly) = $927 million dollars annual profit.
35 million pounds x $31.50/pound profit (at $35/pound moly) = $1102 million dollars annual profit.
2. Can IGMI deal with the overburden, the rocks or dirt on top of where the high grades are? Yes, it's not really that much of a problem, and can be removed in a matter of months. IGMI is run by mine builders who have a good track record.
3. How likely is getting a permit, and how long will it take? I think it's rather likely in Nevada, the best jurisdiction on earth for mining. The location is ideal for a mine: close enough to labor, roads and infrastructure, but almost nobody living within about a 10 mile radius. The local mining community is very encouraged by the long life of the proposed mine plan: 53 years, which provides job stability, and the ability to purchase 30 year home mortgages. Permitting may take 2 years, but might be as short as 18 months if IGMI raises enough cash.
4. What about drill results, is IGMI drilling? Well, the project was already drilled out years ago by Exxon, all the way to the "proven and probable reserves" stage, and no new drilling needs to be done. This is an advanced stage project.
5. Is IGMI making any money, or mining yet? No, IGMI needs $20 million to get through permitting, and, of that, needs to raise about $6 to $10 million to get through permitting (about $4 million was just raised, and about $10 million will come in from past warrants and options). After permitting, IGMI will need to raise $400 million to build a mine, (most likely around $10/share.)
6. Won't the dilution from raising that much money cause the stock price to go down? Not likely. The stock price typically goes up as more money is raised, because the project is seen as being more viable, or more likely to come to completion, and the stock gets less risky for bigger and bigger investors who do not like risk.
IGMI is riskier now for several reasons. 1. No permit. 2. The moly price has been high for only 1.5 years now. 3. Few people know about IGMI. 4. Few people have really done due diligence on IGMI. 5. There are no moly analysts at any major brokerage house. As time goes on, those risks are reduced. And as more people find out about IGMI and moly, the stock price will likely go up, as it did after my first promotions.
7. How can you be bullish on moly and silver and gold all at the same time? Well, all metals prices are going up at the same time right now. Gold, silver, copper, zinc, & lead have all made new highs. This indicates a weakening dollar, and hyperinflation.
Also, I believe IGMI is a very good diversification, since I know of no other mining project with profit potential as good, as I have explained in one of my recent reports:
If this were a gold mine in development, the gold equivalent, at $534/oz. would be:
56 million ounces of gold in proven and probable reserves...
With a prelim feasibility study indicating cash costs of $80/oz.
If this were a silver mine in development, the silver equivalent, at $9.11/oz. would be:
3.3 billion ounces of silver in proven and probable reserves...
With a prelim feasibility study indicating cash costs of $1.36/oz.
Furthermore, I'm bullish on the economy as metals prices go up; I'm not a doomer and gloomer who thinks that there will be a depression (and reduced demand for steel and moly) if gold goes up. As I have written over two years ago, Rising Gold Prices Will Help The Economy - 02 December 2003
Here are a
few links for you to begin further due diligence:
IGMI's 156 page prospectus, for the upcoming Toronto Listing, released late December, here:--------------------------------------
--------------------------------------"The future looks good for molybdenum," says McDonald. "We can't predict where the price is going, but it does look as thought the fundamentals have shifted positively. We know the demand is strong and growing at ten per cent per year; we just don't know where the supply is going to come from."
The Northern Miner Article does not mention IGMI.
Article, from late summer or fall of 2005?: Big Time Backyard Moly
By David Bond, Editor
The Silver Valley Mining Journal
I've received a few emails about articles that say Moly prices will go back down. Such as:
China 'to keep up steel demand'
Shortfall of metals risks China's rise
January 09, 2006
Here are a few new & increasing uses for moly, the hardening agent used in steel:
--To replace depleted uranium used in ammunition.
--More moly used in ship building.
--More moly used in car frames.
--More moly used in steel in cars in China.
--------------------------------------Moly prices are headed back up already.
Mixed movements observed on moly market
--------------------------------------IGMI discussion board.
--------------------------------------To answer the "pump and dump" questions: Don't confuse "pump & dump" (a scam) with advertising and promotion.
For information from the SEC on how to protect yourself from a "pump & dump" scam, see the following:
Pump and Dump Schemes
Pump&Dump.con: Tips for Avoiding Stock Scams on the Internet
Microcap Stock: A Guide for Investors
Internet Fraud: How to Avoid Internet Investment Scams
Tips for Checking Out Newsletters
As for my track record, another stock I recently promoted starting at around $.45/share, Canadian Zinc, has just announced today that they will raise $9.6 million dollars, at $.72/share!
Canadian Zinc Corporation Increases Financing to $9,600,000
Tuesday January 17
Final disclaimer: I STILL own over 450,000 shares of IGMI and 205,000 warrants at $.80 that expire in Nov. 2006, and the company has not paid me to write about or promote the company.
Excerpt from my article: Bible Verses on how to Manage Money
Do not covet. (To covet means to envy and desire things that don't belong to you.) Coveting makes you miserable, and it leads you to want to take from another to be rich, rather than realizing that wealth comes from producing on your own.
Exodus 20:17 Do not want anything that belongs to someone else. Don't want anyone's house, wife or husband, slaves, oxen, donkeys or anything else.Coveting and taking from others is wrong, because it assumes that one man's wealth must come at another man's expense. But the world economy is not a "zero sum" game of mere transfers of wealth. Real wealth is produced from the earth: everything either is originally grown or mined--including you.
Production, work, creates wealth. Trade creates wealth.
True information can also help create wealth.
You can grow wealthy, not by taking from others (coveting), but by giving to others. You can grow rich by helping other people grow rich; producing much needed resources which can help increase other people's standards of living, for example, or by sharing valuable information on such opportunities.