Hi Everyone,
As you already know SWVI is not only our pick of the year, but it's turning out to be our No1 pick ever. Everyone is expecting it to hit multi-dollar levels in the coming weeks, and WallStreet is buying shares like never before in anticipation of massive gains to come.
Everyone who is buying SWVI right now already has an idea of the great things to come as they have thoroughly read through all the materials the company has published recently.
Most of us however are not familiar enough with the mining industry to understand the fundamental reasons why SWVI shares are experiencing such strong gains right now. So we will lay it all out for you to understand over. If you missed our full report yesterday here's a recap:
7 bullet points that will make you want to BUY SWVI RIGHT NOW!
1) The Algarrobo property and its Potential
Description of the property
The Algarrobo Property is an Iron Oxide-Copper-Gold (IOCG) property located approximately 850 km north of Santiago, in the III Region, Province of Copiapo, Chile. The property is located in a historical area of mining activity. At the beginning of the 20th century, the mines in the immediate area of the Algarrobo property were the principal source of high-grade copper in Chile!
Management believes potential exists for production of other metals and/or minerals in addition to copper, including, but not limited to: cobalt, gold, molybdenum, Platinum Group Elements (PGE), Rare Earth Elements (REE) and/or silver.
Potential of the property
The company believes that the Algarrobo property shows many indication that it it holds similar potential to the Olympic Dam property in South Austria. The Olympic Dam property is the sixth largest know copper ore body, fifth largest gold ore body and the largest uranium ore body in the world. Olympic Dam's copper assets based on today's copper price would be valued at approximately $863 billion, including $470 billion in copper, $270 billion in uranium, $116 billion in gold and $8 billion in silver.
Quality of the copper on the property
Sample of very high grade copper on the property was also found which were rated between 10 and 40%. Those are very impressive numbers considering that some major produce a much lower grade of copper. A prime example is Freeport McMoRan's Grasberg mine, which has approximately 2.5 billion tonnes of copper grading at 1.1%.
2) The surrounding properties of the Algarrobo property and their potential
Gigantic copper mines located in Chile
Several surrounding properties to the Algarrobo property IOCG mines, including Candelaria (Freeport McMoran) mine reported a resource of 399M. tonnes of copper grading at 0.58% copper and 0.13% gold, recoverable proven and probable reserves. At today's copper price per ton (USD$8,000 per ton), the value of the Candelaria property is north of 320 billion dollar!
The La Escondida deposit is currently the highest producing copper mine in the world. Its 2007 production of 1.483M. tonnes of copper was worth US $10.12 billion and represented 26% of Chilean copper production, according to the US Geological Survey's preliminary estimates of 2007 world mine output. Escondida is the world's highest producing copper mine!
CODELCO's giant Chuquicamata deposit which, by excavated volume, is the largest open pit copper mine in the world. For many years it was the mine with the largest annual production in the world, but nevertheless it remains the mine with by far the largest total production of approximately 29M. tonnes of copper to the end of 2007.
Other significant properties that produce copper in Chile:
These below mines are owned by large public companies like Capstone Mining and Teck Ressources ltd.
Mantoverde mine production per year about 62,000 tonnes of copper (USD$490M.)
Santo Domingo average annual production of copper (USD$509M.)
Relinco production is about 180,000 tonnes per year of copper (about $1.4 billion USD)
Andacollo production is about 168M. pounds of copper per year (about $600M.USD).
3. Current extraction of minerals and sales to government
ENAMI who they are and current sales
Copper being Chile's largest export, is considered strategic to the county's national interest. As a result, high-grade copper ore can be sold as Direct Shipping Mineralized Material to ENAMI, a large, state-owned mining company which provides competitive processing services to small- and midsize-mining companies, like SWVI.
Test shipments of low-grade material have recently been shipped to the ENAMI facility at Copiapo and returned a range of payments. On January 21, 2013, SWVI made a shipment to ENAMI with a certificate, which documents a grade of 11.42% copper. This is a very high-grade of copper for the company vs the usual 1% that mining company like Freeport McMoran gets.
At the current time, limited production in the immediate area emphasizes recovery and sale of high grade copper ore having an average grade of 9% Cu ("Direct Shipping Ore"). In addition, it is believed opportunities exist for realizing additional value from the high-grade copper ore documented on the Property and, more specifically, from the drifts currently developed through additional processing of high grade mineralized material.
4. AMEC - Leading Engineering Firm
One of the world's most recognized consulting firms in the mining industry has been contracted to assess the Algarrobo property.
SWVI is reviewing a proposal by AMEC (AMEC International Ingenieria y Construccion Limitada) for an initial evaluation and report on the Property.
The report is expected to provide additional independent evaluation of the Property with further direction regarding development and increased production from the Property. AMEC is one of the world's leading engineering, project management and consultancy companies who's customers have includeded: BP, Shell, EDF, National Grid and the U.S. Navy!!
The consulting firm has been ranked two years in a row now as the sector leader in the oil and equipment services sector by The Sustainability Yearbook, which rigorously assesses the sustainability performance of more than 2,000 companies worldwide across 58 sectors.
Last December, AMEC was awarded a $528M. Project Management Consultancy (PMC) contract by the Kuwait National Petroleum Company. Back in 2011, AMEC was awarded $600M. in an oil & gas contract by BP in Azerbaijan.
It's apparent that this is one of the most respected firms on earth. SWVI's relationship with AMEC could significantly help push the stock towards the $10 target that analysts have put on it!
5. HSBC raised its 2013 copper price forecast, saying it expects positive sentiment to drive prices for the metal in a structurally balanced market. The bank lifted its 2013 forecast for the average cash copper price to $8,000 per ton from $7,500 (London's copper metric) to reflect the metal's relatively good start to the year. "Copper, perennially described as fundamentally tight, actually finished 2012 posting a gain in inventories," analyst Andrew Keen said in a note to clients. This market remains balanced in our view, and this is enough to keep prices high when sentiment is good.
With that said, the copper sentiment is positive, and should continue to be so. As a result SWVI is a great stock to own to play off this unprecedented copper rally!
6. Copper is an industrial metal and therefore, it is very sensitive to economic cycles. Copper has a variety of uses, and it is a key component of every-day life, from the coins in our pockets to the powerlines that provide us with electricity. Furthermore, its extensive use in 'green' technologies, such as solar cells and electric vehicles, ensures that copper will continue to play a key role in our sustainable future. Copper is conductive, durable, malleable, and eminently recyclable, making it one of the world's most useful natural resources.
There have been some worries surrounding copper because of the short-term macroeconomic concerns regarding the US and Europe. However, the fundamentals are still excellent for copper: as Asia represents over 60% of world demand with China by itself at 39% and could reach 45% in 5 years. Southern Copper forecasts that China and Emerging Markets countries will continue growing, albeit at a lesser pace, but still showing substantial gains. The company also notes that limited production upside and falling grades will result in a deficit copper market going forward.
Two weeks ago, China's neighbor, Japan, also reported positive economic news. Japan raised its expectations for the economy for the first time in eight months, as private consumption held firm and business sentiment improved in a sign that Prime Minister Shinzo Abe's policy of easy money and big spending had begun taking effect. "The economy is weak, but signs of bottoming out can be seen in some areas," the report said. That was an improvement from last month, when the government said the outlook was weakening because of a slowdown in overseas economies. HBM has performed substantially well the past three months with shares rising over 26%.
7. Historical mining companies that soared :
Small-cap mining stock that have done well recently:
LEXG - 80 cents to $10
These companies below focus on the production of copper:
Inmet Mining Corp. (TSX: IMN) - From $1.75 to $100
Teck Ressources Limited (NYSE:TCK) - From $2.30 to over $50
Freeport-McMoran Copper & Gold Inc. (NYSE:FCX) - From $3.90 to over $60
Southern Copper Corp (NYSE: SCCO) - From $1.50 to $44
We hope that you have read through this entire newsletter and now fully grasp the main reasons why SWVI is such a good stock to own right now.
That being said the window of opportunity is shrinking every day as the share price rises more and more.
Currently there could be about 1,000% in profits up for grabs, but by the end of next week as SWVI reaches $3, $4, $5 and higher the potential for profit will diminish. That's why now is the time to buy SWVI.
Keep in mind we alerted all our members about SWVI when it was trading at just 15 cents. Now it is around a dollar and still rising towards the $10 price target that analysts have predicted.
Happy Trading,
Your PennyStocks.com Editor |
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