a ten bagger return here!

Take note of the comments at the bottom!!!

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http://asxguru.com.au/


Yesterday morning, Fortis Mining Ltd (FMJ) released the following announcement to the market:


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ASX Announcement

Fortis secures strategic Hong Kong investment and partnership

-Placement of 6,000,000 shares at premium price of $0.40 per share
-Introduction to world-class potash asset

The Board of Fortis Mining Limited (Fortis or Company) is pleased to advise that it has entered into a strategic partnership alliance with Hong Kong investment company Grand Concord Investments Limited including a share subscription agreement at a significant premium.

Grand Concord Investments Limited and its principal owner, Madam Cheung, have a substantial network of clients and mining related relationships throughout Asia and Eastern Europe. Through these relationships, the Company has already been introduced to some substantial mining opportunities most significantly, a world-class potash asset.

The Company is currently undertaking due diligence, negotiations and discussions in relation to the proposed acquisition of the world-class potash asset and other opportunities and will continue to keep the market informed of developments.

As a further commitment to the strategic relationship, Madam Cheung has agreed to subscribe for 6,000,000 fully paid ordinary shares in Fortis at a premium price of $0.40 per share. The terms of the subscription are set out in a share subscription agreement and provide for as follows:

2,000,000 shares at $0.40 each (raising $800,000) to be issued immediately upon receipt of payment using the 15% rule exemption under ASX Listing Rule 7.1; and

4,000,000 shares at $0.40 each (raising $1,600,000) to be issued immediately following approval from shareholders to issue the 4,000,000 shares to Madam Cheung at a general meeting to be convened before 30 March 2011.

The funds will contribute towards the exploration and development of the Company�s current assets and to further assess and acquire one or more of the world-class mining opportunities being introduced as a result of this strategic partnership including investment opportunities out of China.
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As soon as I read the announcement I knew that potential company making acquisition was about to be made, even though nothing has been declared as yet. The market in general has been a bit funny lately however, and as a result of the stupid selling that I keep seeing, I warned the forum about buying the stock on yesterdays open.

The above chart shows yesterdays open at 38c and from the open, the stock raced to a high of 40c but unsurprisingly there was a sell-off not long afterwards. The selling is mainly the fault of short term traders that dont pay too much attention to detail. These short term traders also dont like to consider the longer term possibilities.

As a result of this short term mentality, Fortis Mining stock got sold off a few minutes after the early morning spike. A low of 35c was hit and when I could see that the days low was most probably made, I suggested to the forum that it was time to buy in at 36.5c. Fortis ended up closing slightly higher at 37.5c yesterday so it was still a little unclear how the stock would trade in the near future.

Today however, the trading scenario was much clearer. There was a strong open at 38.5c and from the open, buyers were forced to chase the price. Fortis Mining rallied to a high of 48.5c today and closed slightly lower at 48c, making a 28% gain for the day. The above chart is now very bullish.

Whilst many things can go wrong when investing in speculative stocks, Fortis Mining is showing very promising signs. Its very early days here but we could potentially see a ten bagger return here!