An interesting article as reading for the weekend:
Newcomer in a billion-dollar sector Dear readers,an old investment wisdom says that you should only buy what you understand.Another investment approach is to buy the shares of companies whose products or applications you constantly use yourself. For example, if you have been an avid Apple fan for years, you should also have Apple shares in your portfolio.
This approach has certainly not done badly in recent years.If you then think a little further, you will soon realize that almost all objects of everyday life are somehow made with raw materials extracted from nature or raw materials are built into the products.The PC, laptop or smartphone on which you are reading this article...all contain metals and raw materials that were once mined somewhere in the world.Without raw materials our world would be quite empty. No houses, no cars, no bridges or roads.
But there are also raw materials that we hold or see every day in our hands outside the big sectors like iron ore or copper, without us even realizing it.If you just look around you now in the room where you are sitting, you will most likely find something white. The wall, the ceiling, the shell of your computer, your smartphone, your iPod or a white coffee cup?
What is almost unknown, however, is that titanium dioxide is present in almost all white paints, plastics, fibres and even paper.Titanium dioxide is a dark-coloured mineral that turns into a white, opaque powder during further processing.Worldwide, about 90 percent of titanium dioxide is used as a pigment in the production of paints, plastics, paper and fibers, where it is not only a non-toxic brightener but also offers UV and chemical resistance. The wide range of end uses for pigments includes home and automotive coatings, laminates, plastic pipes and packaging, printing inks, clothing, sunscreen, toothpaste and make-up.Natural rutile is a naturally occurring, very high quality titanium dioxide feedstock (TiO2 content of 92-95%). Due to its very high titanium dioxide content, natural rutile is the preferred source for the world's pigment and paint manufacturers.
The pigment industry is a USD 15 billion market, growing at almost 5% annually.GLOBAL MARKET INSIGHTS currently calculates with an annual growth rate of 4.90% until 2026, from USD 14.8 billion to USD 21.8 billion in the next 6 years.
This Australian company has discovered one of the largest and highest grade deposits in the world!
Why am I telling you all this?Because we are invested in a company that is currently entering this sector at full throttle and has probably discovered one of the largest and highest grade projects in the world! The management is currently talking not only about the discovery of a new world class project, but about the discovery of a whole new rutile province!Few players control the sectorThe rutile sector is controlled by only a few companies worldwide.
The world's largest producer of rutile is the Australian company ILUKA (ASX: ILU) with a current market value of around A$3.8 billion. ILUKA has been supplying pigment manufacturers for many years and covers about 20% of the world's demand.ILUKA's problem in recent quarters has been that customers want to buy more rutile, but they don't have any more.Source: ILUKA quarterly report: https://iluka.com/getattachment/58f31c84-0bcd-4c8c-be62-f95347de5891/quarterly-review-31-december-2019.aspx
As always in the mining sector, the output is tied to certain sizes and ILUKA has the SIERRA RUTILE project in Sierra Leone, the largest rutile deposit in the world, but there are also problems there time and again.Other "players" in the sector are the US company TRONOX (USA: TROX) with a market value of more than USD 1 billion or RIO TINTO (ASX: RIO) with a market value of AUD 36 billion.Some medium-sized producers still exist, such as the Australian company BASE RESOURCES (ASX: BSE, market value A$210 million) or the London-based company KENMARE (London: KMR, market value GBP 245 million).
Now, a small and still relatively unknown Australian company has discovered two high-grade and probably very large rutile deposits in recent months. One of the projects is now, after the first three rounds of drilling, already showing the attributes of a world-class discovery.The grades that the company has discovered so far are at the same level or in some cases even higher than those of SIERRA RUTILE, the top dog in the sector.
The mineralization already extends to over 10 square kilometers and rutile mineralization begins directly from the surface.So you can simply start with the excavator and start mining.
What many companies discovering new mineral deposits often keep quiet about is the lack of infrastructure. Often the rude awakening comes when the feasibility studies are done and then an extra $100 or $200 million has to be paid for the construction of a railway line.But in our case, an existing rail line is only a few kilometers away from the project and the company has already signed a letter of intent with the operator of that rail line.
SPROTT and hedge funds on board
Relatively unnoticed by the public, a fund manager of SPROTT has also bought into the last capital increase, as well as a billion dollar hedge fund from London. Both professional investors who became aware of this unique fund at an early stage.
Opportunities through ignoranceIf I were to tell you today, here and now, that you could invest in one of the three best, highest-grade and largest gold mines in the world, and that at a price of about 0.12 euros per share and a valuation level of less than 45 million euros, then you would probably strike immediately.This is how many investors feel. Time is short and research simply costs many hours of work.This is precisely where the really big investment opportunities lie, which only gradually unfold in the market. If a company today drills 100 meters with 10 g/t gold, the market value immediately explodes to several hundred million dollars and you can hardly react as a normal investor.
But in our case you now have the chance to invest in one of the largest, highest grade and best rutile deposits in the world before the masses wake up.I have to say that my readers have been invested in this stock for quite some time and currently GOLDREPORT readers are already over 90% in profit. But I also believe that it is still a good time to invest in the stock.Internal calculations already indicate that there are more than 200 million tonnes of world class grades. The commodity value in soil should already be in the $2 billion range now, before the first resource calculation, compared to the current market value of less than $50 million.I would not miss this opportunity.
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