moly mines (mol) – glowing write-ups

Sorry about the length of this but it’s well worth the read. However before reading my post I URGE you to read the article “Hot town shapes as leader in hot metal hunt” available by clicking ‘West Australian Article 15th September 2005. Author: John Phaceas’ at the following link:

http://molymines.com/investor_relations/2005_announcements.phtml

(Unfortunately I can’t copy and paste the text here as it is in PDF format)

After reading such an article it jolts you into investigating further. The first question being ‘what is molybdenum?’

Molybdenum (Mo) is a silvery white coloured metal used as a steel-hardening agent and in aircraft and missile parts. It has a high melting point and it used to help create strong alloys (Source: http://en.wikipedia.org/wiki/Molybdenum)

Demand has been strong for the metal with the price increasing from about US$3/lb in 2003 to price of US$34.25/lb in early September this year.
If somebody has a website where I can track the prices of Mo that would be great as my searches have proved fruitless!

Now back to the discussion of Moly Mines. Also after viewing the article I proceeded in checking the share price and I thought it was a bit overvalued for a miner at $1.30 a share. I then recognised the fact there is 29 million shares on issue giving the company a market capitalisation of only about $37million.

You have to bear in mind that of the $37million cap that $17.5million is cash on hand (as of 30/06/05). It seems cheap considering the following factors:

-The project at Spinifex Ridge could potentially be worth $400million;
-Moly Mines has three other Mo projects;
-Moly Mines has a few gold projects in NSW including its flagship Dargues Reef Deposit which recently announced excellent results (04/10/05)

With the pre-feasibility study due at the end of year for the Spinifex Ridge project we could see some short term share price gains in the lead up to or after the release of hopefully a positive study. Remember positive news could have a marked effect on the share price due to the stock being tightly held.

I think the market is slowly catching on with the potential of this metal. This was evident with the spike in share price of Glengarry Resources (GGY) from 0.054 to 0.058 on 21/09/05 after announcing significant copper & molybdenum at Maitland. It is now trading at 0.06 but much of this rise can be attributed to uranium associated announcements. Also those metals in vogue tend to result in miners coming forward to cash in. This has already begun with Vital Metals Australia (VML), a Mo and tungsten explorer floating on the ASX. However it’s listing has been less than spectacular with the last traded price of 0.20 also being the issue price.

As an aside other positive articles include “Molybdenum - the 21st Century Metal” by Ken Reser available at http://www.kitcometals.com/commentaries/Reser/sep122005.html and an article featuring Moly Mines that made front page of Paydirt Magazine (available at http://www.molymines.com/investor_relations/2005_announcements.phtml)

If you got this far thanks for reading, please add any comments - positive or constructive criticisms!

I hold MOL (they're in the bottom drawer)

Disclaimer: The above comments are not advice or recommendations to buy or sell any of the companies mentioned. Investing in these companies and/or any investment involves risk. The companies mentioned above may not meet your risk tolerance or financial objectives and as a result always obtain advice from a licensed adviser before investing.