maverick
31-12-2007, 05:00 PM
A mountain of 'waste' and
billions in potential profit
Every year the world's biggest mining company throws off 164 million tons of 'waste tailings' from three of its most profitable mines...
What nobody realises is that hidden in this 'waste' there's approximately £3.9 billion of a very important metal. Until now nobody knew how to get it out at reasonable cost.
But one little company has proven it can do it, and is on the cusp of signing a deal to haul it out.
This one deal would bring all this valuable material under this company's ownership - material other junior mining firm's could only hope to extract from underground.
According to the Mining Journal "there are few junior [mining companies] which can boast sitting on a resource with an in-ground value of US$7 billion... and not only is the resource there but it has already been mined, milled and is sitting in neat stockpiles on the ground..."
Imagine it... a miner that never needs to mine. No speculation. .. no risk of digging an empty pit... no "will they, won't they" find what they're looking for...
Because as you're about to see, this company's already found it!
"Utterly... radically... and profitably different
from anything done before"
The metal is nickel. And mining it is a rough business. Sometimes the valuable stuff is just too expensive to separate from the surrounding material... the tailings.
At first glance, these tailings look like ordinary red rocky sand. It feels grainy to the touch and... scratchy.
But what this company discovered is simply astonishing. ..
Nickel tailings - when specially heated - ooze pure, unadulterated nickel.
By separating "sulphide nickel" from the rest of the material, they realised they could then use a special sulphuric acid solution to draw out the pure form of the metal.
It's a process that's totally unique... that's utterly, radically, and profitability different to anything done in this field before.
And it could be about to make this one tiny resource company very big, very fast...
In a moment I'll show you exactly why I believe this company's groundbreaking process is the basis of a deal that's almost certain to reach the "golden hello" stage very soon.
When it does, owning shares in this little-known company before this deal is announced to the market could be the best decision you make in your entire investment career.
'Project L': Recovering a lost multi-billion
pound precious metal fortune
Now I'm no chemist... but I can see that this is something potentially EXPLOSIVE!
You see, since 2004 they've been testing this incredible new science on the mountains of nickel tailings that for the last 24 years BHP Billiton - the world's largest miner - has had to hoard as trash.
Those involved call the venture 'Project L' after the location of the biggest cache of these nickel tailings. In total it amounts to 164 million tons.
But here's where it gets interesting. ..
In the last three months, AMC - independent consultants for the industry - CONFIRMED this mountain of tailings contains up to 500,000 tons of the metal.
In today's market that's worth £4.45 BILLION.
But that's only the half of it! You see, these mines are still working. And AMC expects another 520,000 tons to be added over the next 20 years alone!
Right now, this fortune sits idle - untapped. Do you think BHP will stand aside and watch while this hotbed of revenue gets bigger and bigger? I certainly don't!
Because in today's economic market place nickel is HOT!
It's shot up 700% in the last five years alone! And it shows no sign of slowing. In fact, according to Roskill Metals and Minerals demand will swamp supply "particularly in 2008".
China can't get enough of the stuff! The stainless steel sector dominates Nickel consumption filling a whopping 70% of world demand. And China can't gobble it up quick enough! In 2006 it overtook Japan as the largest nickel consuming country. Their demand for the metal shot up 35% in the seven months to the end of July 2007 and Jinchuan Group, Asia's largest nickel producer, has raised its price for a second time this month. And thanks to their fellow Asian powerhouses, says the Metal Pages, the outlook to 2010 is "higher than average growth".
Analysts can't see an immediate end to the global commodities crunch! Specialist metal market analyst zealll.com says "the fundamentals of this finite metal call for it to push even higher as the great commodities bull of the 00's charges forward".
One thing is absolutely definite: As demand increases the big miners will do anything they can to make their current mines more efficient.
And that's EXACTLY what 'Project L' offers BHP.
Now I'm not going to sit here reeling off pages and pages of macro-economic details about the supply and demand for the metal.
It's the profit potential of 'Project L' that could make you money... and as you're about to see, it's absolutely staggering!
Here's the deal, laid out in black and white:
This company will buy the 500,000 estimated tons of nickel in all BHP's tailings for 5% of its market value. Once it's extracted all the nickel, BHP has the right to buy it back at 70% of the market price, which would leave this company with a 65% profit.
Now just look at the potential revenue this could generate:
65% on the $16,500 value of one ton of nickel = $10,725.
$10,725 - $3,500 (operating costs) = $7,225 profit per ton
Applied to the one million tons of nickel that either do, or will eventually, exist in the tailings and this gives a TOTAL NET PROFIT of $7.225bn.
At current prices that's £3.9 BILLION right there!
Okay, they're not just going to be handed a cheque for this whole amount when the deal's signed. It'll be a steady stream of business for the next 20 years...
And of course no-one can guarantee the price of nickel won't drop in that time. But even in the unlikely event it drops by half the potential profits from this project are still astounding!
It's why on 15th October broker Matrix Corporate Capital released a report proclaiming it a "Cash Cow in the Making"...
Late 2007 a "major milestone" - The report concluded the company should complete testing of its nickel processing stream in late-2007, which Matrix regards as a major milestone. They value the company 20p just in the anticipation of positive news.
"200p in a matter of years" - Matrix calculates an ultimate valuation of 134p per share in several year's time, when production is at full capacity. However, they said if metal prices hold at current spot levels, this valuation could increase to over 200p.
"Prime takeover target" - According to the broker, in 5 - 10 years this unique little company... "should either be a major resources house or have been acquired by one - if recent history is anything to go by, the latter is the more likely in our view."
And there's no wonder! Right now the nickel under 'Project L' is equal to £14.72 per share... and it literally swamps this company's current market cap - BY 119 TIMES!
See the potential?
To process 164 tons of nickel tailings, this company will need a specially built plant at the three mining sites where each pile of nickel tailings are stored. This will cost money.
Cue BHP.
The feasibility of 'Project L' is due to be completed by the end of this year. Once the study is complete BHP has the option to take a 50% stake in the project in return for chipping-in towards its costs.
That's when BHP will decide if it wants in. And that's when the REAL value of this project will begin to get priced in the market and could send one company's shares into super-drive!
What if BHP doesn't want in?
Well, that's the risk. But it's one that I believe is 101% worth taking.
Look. You've seen the potential returns from this project... it's an astonishing amount for this tiny company. I've spoken with the chief executive, and he's said things are moving "exceptionally well".
And the deal's great for BHP. They get a valuable commodity for a massive discount - nickel that otherwise would have remained dumped in their backyard!
As far as I'm concerned, this is a no-brainer opportunity.
I would be very surprised - no, let me restate that: utterly shocked - if BHP did not decide to take their stake in this clear money-maker. In fact, I wouldn't just eat my hat - I'd swallow the whole darn suit!
The potential revenue is too great to pass up.
But I couldn't really give two hoots about their
profits - I'm interested in YOURS...
Let's not lose sight of the real story here. 'Project L' is 1-2 years away from market fruition at the earliest...
Construction of the nickel tailings processing plants will follow in 2008 for completion in 2009.
But the investment potential of the company bringing this new nickel to market, however, is right here, right NOW - while its share price is still relatively cheap!
As far as I'm concerned it's just a matter of time before the market realises this share's potential. And that time is running out.
billions in potential profit
Every year the world's biggest mining company throws off 164 million tons of 'waste tailings' from three of its most profitable mines...
What nobody realises is that hidden in this 'waste' there's approximately £3.9 billion of a very important metal. Until now nobody knew how to get it out at reasonable cost.
But one little company has proven it can do it, and is on the cusp of signing a deal to haul it out.
This one deal would bring all this valuable material under this company's ownership - material other junior mining firm's could only hope to extract from underground.
According to the Mining Journal "there are few junior [mining companies] which can boast sitting on a resource with an in-ground value of US$7 billion... and not only is the resource there but it has already been mined, milled and is sitting in neat stockpiles on the ground..."
Imagine it... a miner that never needs to mine. No speculation. .. no risk of digging an empty pit... no "will they, won't they" find what they're looking for...
Because as you're about to see, this company's already found it!
"Utterly... radically... and profitably different
from anything done before"
The metal is nickel. And mining it is a rough business. Sometimes the valuable stuff is just too expensive to separate from the surrounding material... the tailings.
At first glance, these tailings look like ordinary red rocky sand. It feels grainy to the touch and... scratchy.
But what this company discovered is simply astonishing. ..
Nickel tailings - when specially heated - ooze pure, unadulterated nickel.
By separating "sulphide nickel" from the rest of the material, they realised they could then use a special sulphuric acid solution to draw out the pure form of the metal.
It's a process that's totally unique... that's utterly, radically, and profitability different to anything done in this field before.
And it could be about to make this one tiny resource company very big, very fast...
In a moment I'll show you exactly why I believe this company's groundbreaking process is the basis of a deal that's almost certain to reach the "golden hello" stage very soon.
When it does, owning shares in this little-known company before this deal is announced to the market could be the best decision you make in your entire investment career.
'Project L': Recovering a lost multi-billion
pound precious metal fortune
Now I'm no chemist... but I can see that this is something potentially EXPLOSIVE!
You see, since 2004 they've been testing this incredible new science on the mountains of nickel tailings that for the last 24 years BHP Billiton - the world's largest miner - has had to hoard as trash.
Those involved call the venture 'Project L' after the location of the biggest cache of these nickel tailings. In total it amounts to 164 million tons.
But here's where it gets interesting. ..
In the last three months, AMC - independent consultants for the industry - CONFIRMED this mountain of tailings contains up to 500,000 tons of the metal.
In today's market that's worth £4.45 BILLION.
But that's only the half of it! You see, these mines are still working. And AMC expects another 520,000 tons to be added over the next 20 years alone!
Right now, this fortune sits idle - untapped. Do you think BHP will stand aside and watch while this hotbed of revenue gets bigger and bigger? I certainly don't!
Because in today's economic market place nickel is HOT!
It's shot up 700% in the last five years alone! And it shows no sign of slowing. In fact, according to Roskill Metals and Minerals demand will swamp supply "particularly in 2008".
China can't get enough of the stuff! The stainless steel sector dominates Nickel consumption filling a whopping 70% of world demand. And China can't gobble it up quick enough! In 2006 it overtook Japan as the largest nickel consuming country. Their demand for the metal shot up 35% in the seven months to the end of July 2007 and Jinchuan Group, Asia's largest nickel producer, has raised its price for a second time this month. And thanks to their fellow Asian powerhouses, says the Metal Pages, the outlook to 2010 is "higher than average growth".
Analysts can't see an immediate end to the global commodities crunch! Specialist metal market analyst zealll.com says "the fundamentals of this finite metal call for it to push even higher as the great commodities bull of the 00's charges forward".
One thing is absolutely definite: As demand increases the big miners will do anything they can to make their current mines more efficient.
And that's EXACTLY what 'Project L' offers BHP.
Now I'm not going to sit here reeling off pages and pages of macro-economic details about the supply and demand for the metal.
It's the profit potential of 'Project L' that could make you money... and as you're about to see, it's absolutely staggering!
Here's the deal, laid out in black and white:
This company will buy the 500,000 estimated tons of nickel in all BHP's tailings for 5% of its market value. Once it's extracted all the nickel, BHP has the right to buy it back at 70% of the market price, which would leave this company with a 65% profit.
Now just look at the potential revenue this could generate:
65% on the $16,500 value of one ton of nickel = $10,725.
$10,725 - $3,500 (operating costs) = $7,225 profit per ton
Applied to the one million tons of nickel that either do, or will eventually, exist in the tailings and this gives a TOTAL NET PROFIT of $7.225bn.
At current prices that's £3.9 BILLION right there!
Okay, they're not just going to be handed a cheque for this whole amount when the deal's signed. It'll be a steady stream of business for the next 20 years...
And of course no-one can guarantee the price of nickel won't drop in that time. But even in the unlikely event it drops by half the potential profits from this project are still astounding!
It's why on 15th October broker Matrix Corporate Capital released a report proclaiming it a "Cash Cow in the Making"...
Late 2007 a "major milestone" - The report concluded the company should complete testing of its nickel processing stream in late-2007, which Matrix regards as a major milestone. They value the company 20p just in the anticipation of positive news.
"200p in a matter of years" - Matrix calculates an ultimate valuation of 134p per share in several year's time, when production is at full capacity. However, they said if metal prices hold at current spot levels, this valuation could increase to over 200p.
"Prime takeover target" - According to the broker, in 5 - 10 years this unique little company... "should either be a major resources house or have been acquired by one - if recent history is anything to go by, the latter is the more likely in our view."
And there's no wonder! Right now the nickel under 'Project L' is equal to £14.72 per share... and it literally swamps this company's current market cap - BY 119 TIMES!
See the potential?
To process 164 tons of nickel tailings, this company will need a specially built plant at the three mining sites where each pile of nickel tailings are stored. This will cost money.
Cue BHP.
The feasibility of 'Project L' is due to be completed by the end of this year. Once the study is complete BHP has the option to take a 50% stake in the project in return for chipping-in towards its costs.
That's when BHP will decide if it wants in. And that's when the REAL value of this project will begin to get priced in the market and could send one company's shares into super-drive!
What if BHP doesn't want in?
Well, that's the risk. But it's one that I believe is 101% worth taking.
Look. You've seen the potential returns from this project... it's an astonishing amount for this tiny company. I've spoken with the chief executive, and he's said things are moving "exceptionally well".
And the deal's great for BHP. They get a valuable commodity for a massive discount - nickel that otherwise would have remained dumped in their backyard!
As far as I'm concerned, this is a no-brainer opportunity.
I would be very surprised - no, let me restate that: utterly shocked - if BHP did not decide to take their stake in this clear money-maker. In fact, I wouldn't just eat my hat - I'd swallow the whole darn suit!
The potential revenue is too great to pass up.
But I couldn't really give two hoots about their
profits - I'm interested in YOURS...
Let's not lose sight of the real story here. 'Project L' is 1-2 years away from market fruition at the earliest...
Construction of the nickel tailings processing plants will follow in 2008 for completion in 2009.
But the investment potential of the company bringing this new nickel to market, however, is right here, right NOW - while its share price is still relatively cheap!
As far as I'm concerned it's just a matter of time before the market realises this share's potential. And that time is running out.