Tiny Aussie Miner Discovers $17.8bn 'Energy-Metal' Deposit
With a melting point of 2,623ºC, this greyish metal is crucial to 95%
of the world's oil refineries and all new nuclear reactors.
But chances are you've never heard of it...
One tiny Aussie miner is poised to 'bust open' a 30-year 'Energy Metal'
resource in the Pilbara... and could potentially deliver you
400% gains by the last quarter of 2009
"Having been all but ignored for many years, this ('Energy Metal') is now being mined at a ferocious pace as oil, gas and nuclear groups discover how many ways they can use it..." -- MoneyWeek
Have you heard about the obscure alloy that's keeping the world's oil refineries and nuclear power stations running?
Read on, because it's a story that could put 400% into your pocket in the next 12 months.
In fact the stock I want to tell you about could significantly outperform my last mining share tip, Mineral Resources, which is now sitting on 270% gains.
It's a story that began in 1778...
In that year, a German-Swedish chemist accidentally discovered a remarkable new element - the metallic equivalent of superman... strong, tough, resistant to extreme conditions, and incredibly versatile...
This mysterious metal (pictured right) can do almost anything.
It has one of the highest melting points of any element. It's unbelievably resistant to corrosion. It doesn't expand, contract or harden in extreme temperatures.
That's why you'll find this metal in almost every oil and gas pipeline on the planet.
You'll find it in drill bits and pipes used by deep-sea oil explorers, who are often forced to deal with temperatures of up to 330ºC...vertical depths of 5km...or corrosive materials that wear through standard alloys like acid through newspaper.
You'll also find it in every turbine installed in a modern nuclear power plant. Before this metal was used, the old copper and nickel pipes would corrode 75% quicker.
As you'll see shortly, it could be about to become the most sought-after commodity on Earth in 2009.
And yet, I'd bet my bottom dollar you've never even heard of it!
Why?
I'll get to that in a second.
First I want to let you in on an urgent opportunity centred round this mysterious alloy.
The Aussie mining company I want to tell you about is tiny... with just a $185 million market cap at the time of writing.
I won't beat around the bush - that small size makes this a risky, speculative play.
But we think it's one worth making...
Because this mining junior is currently sitting on a giant 'Energy Metal' deposit nestled cosily in the startling landscape of the Pilbara. The plant to process the ore from this deposit will be completed in the last quarter of 2010.
If they could mine the whole reserve all at once, it would be worth US$17.8 billion at current prices.
Of course, that's not going to happen. Mines are designed to operate over many years... and, as you'll see, this particular one will still be operating 20 years from now.
But that's GREAT news...
Because, for reasons I'll outline shortly, we expect 'Energy Metal' prices to be MUCH higher over that time.
In other words, you could say the $17.8 billion all-up value of this untapped deposit is conservative.
Still, the market has yet to find faith in this stock. It currently sells for under $2.
Over the next seven minutes, I'll show you why that price is a steal... why we calculate that it could shoot as high as $10 by the end of 2009... and perhaps even higher again in the following five years.
Be clear though...
This is NOT a sure thing. Mining juniors are speculative investments and come laden with risks. The great potential payoffs come about because sometimes things can go wrong with a project. If taking a calculated risk isn't in your blood, perhaps this isn't for you.
But if you're seeking out uncharted investment territory in the ongoing Australian resources boom...
If you'd like to add a genuine 'backdoor' play on soaring energy prices to your portfolio...
If you're bold enough to chase new, clever ways to profit, even as many stock investors go into hibernation...
And if you've got enough nerve to back an unknown mining junior in order to see a potential 400% return in under 12 months...
Then please read this letter to get the full, intriguing story...
Introducing the 'New Uranium'
Until very recently, this metal was all but ignored by energy producers and the market. In fact the price hovered around $5 for most of the 1990s.
Lately, though, this rare element - buried in the middle of the periodic table - has rocketed in price.
You've probably never read a single article reporting it in the press, but this base metal has left many of its more popular commodity cousins for dead.
Since the turn of the century...
- 'Energy Metal' is up 1300%!
But, for reasons I'll outline shortly, this bull-run is only just beginning. That's why some energy investment insiders have started calling this element the 'New Uranium'.
So what's the big deal?
Loads of resource prices have been caught up in this secular bull market.
Many of them will lose steam as the global economy slows.
In fact some already have.
This 'Energy Metal' is used to strengthen steel in skyscrapers like the Petronas Towers in Kuala Lumpur
What makes this grey metal so special... and so profitable - provided you can find one of the few companies holding reserves?
To start, you need to know that this ultra-tough material is already a key component used to harden steel.
That makes it absolutely necessary to build skyscrapers, bridges, machinery, and everything else that's big and needs to last.
But that's not what has demand soaring... and switched-on investors licking their lips.
Instead, it's this metal's essential role in almost every crucial area of the energy markets - in oil and natural gas pipelines... as a catalyst in oil refining... manufacturing oil drill rigs, pollution control equipment, and nuclear energy hardware.
Simply put...
And as long as energy demand soars, so will demand for this previously ignored alloy.
Let me show you why...
The secret ingredient that
turns sour oil sweet
'Sweet crude' - oil that's low in sulphur content - is getting harder and harder to find.
Major oil companies are coming to terms with a world dominated by 'sour crude' - oil where the sulphur content is over 1%.
That's a pain for refiners for three reasons. They have to refine the sulphur out, which costs more. And they have to use special drill bits and pipelines, because of the corrosive nature of sulphur. And much of the world's sour crude is far offshore, creating a need for more deep-sea wells.
Our 'Energy Metal' solves ALL THREE of these problems for refiners.
It has a strong enough composition to withstand high-sulphur oil flows, so it's a vital component for drill bits and pipelines. And it can also withstand pressure under the weight of the planet's oceans.
But best of all...
It's one of the most efficient catalysts for separating sulphur from oil.
About 95% of all the refineries in the world now refine their sour crude in this way.
(I could explain to you how it works, but it's a little complicated. Trust me, though, it DOES work.)
Facilities like PetroChina's new sour oil processing plant are going to be demanding thousands of pounds of this alloy, as they seek to refine more and more sour crude.
But this is just the first way this metal is becoming increasingly vital to the energy industry...
Deep oil exploration is now more important than ever. Some of the world's biggest oil fields... Gushers like Gawar in Saudi Arabia are peaking out... and oil companies are having to delve ever-deeper for hydrocarbons. Let's face it, unless oil suddenly gets easier to find, this situation is unlikely to change.
Neither will the deep-driller's growing reliance on 'Energy Metal'.
It's used to strengthen drill stem steel, as it prevents corrosion and melting in the toughest drilling operations.
The metal that keeps
oil flowing...
You don't make an oil or gas pipeline on land these days without significant amounts of 'Energy Metal' either.
The Alaskan Pipeline, for instance, needs to handle temperatures of -22 ºC. Without being reinforced by this ingredient, this 48-inch pipeline which delivers 775,000 barrels of oil a day couldn't hope to maintain integrity. Without it, a pipeline could crack like an eggshell.
And here's the thing...
With the energy industry seeking out ever-more remote deposits of oil and gas, more and more of this pipeline will need to be built.
It takes about 1.6 million pounds of it for every 1,000km of pipeline.
Right now there is over 100,000km of pipeline in the planning stages globally, in the Baltics, Russia, China and Canada.
That's a LOT of 'Energy Metal' required.
By now you see why this little-known element is about to become one of the most sought-after commodities on the planet, after oil itself.
From the drills that plough through deepwater deposits to the pipes that pump the oil... from the shears in coal fields to the generators in hydroelectric plants... ALL would cease to function without this vital ingredient.
If you're betting long-term on increasing energy demand, you'll want some exposure to this metal in your portfolio NOW.
Just think of all those deep-water platforms sitting out there in the rolling, watery plains of the Gulf of Mexico and the North Sea. Soon there will be a whole lot more of them.
Worley-Parsons, possibly the world's greatest authority on engineering, expects global investment in offshore oil and gas to top US$250 billion by 2010.
And every time Exxon taps another field, thousands of pounds of 'Energy Metal' are required... and the more precious this resource becomes...
But there's an even bigger reason to bet on rising 'Energy Metal' prices - and the tiny $2 Aussie mining stock I'm going to introduce you to.
I'll get to that in a second.
First, I better
introduce myself...
My name is Al Robinson.
I'm the Investment Director of the resource stock newsletter, Diggers and Drillers.
I'm a born-and-bred Aussie with a degree in commerce and specialisation in finance.
But my passion is 'rock kicking'. I spend every hour of every working day looking for the best resource shares in Australia.
The goal of Diggers & Drillers is simple: to give you the best available research in the world into smaller Aussie metals, mining, and energy shares. I can say with confidence that you will not find anywhere this level of analysis of the Aussie resource market. It just doesn't exist. I know because I've looked at what's already being published in Australia.
Investing in commodity stocks (especially the smaller ones) is an inherently risky business. And the truth is most of the analysts I've read are either too stupid or too lazy to do the hard yards that it takes to uncover genuine resource opportunities.
They just don't want to do the work. So they don't.
Besides, it can be dangerous. Commodities are cyclical. Managers don't always tell the truth. A lot of analysts I've met don't even know the right questions to ask about the mining business.
That's why you have to do your homework. You have to read financial statements, call the company directors, and understand the mining business from top to bottom.
Frankly, though, most investors don't have time for this.
But I do. In fact, it's all I do. And it gives my readers a huge advantage when it comes to locating the next wave of winners in the Aussie resource market...
Uncovering resource plays the
'mainstream' overlooks
Sure, the big banks and brokers may have never heard of some of my share tips...
But if you're willing to do the hard work... and analyse stocks that are often too small to show up on the radar of big money managers... you can unveil some great gems... like the 'Energy Metal' beauty I'll tell you more about in a second.
The list of our current share tips includes oversold gold companies, fast-growing mining service companies, and a variety of other base metals and energy shares leveraged to higher resource prices.
I can't promise you we always get it right with our share tips and market calls.
But I can promise you this...you will not find a more thoroughly researched resource share-tipping publication in Australia.
Don't get me wrong. I'm not arrogant. Far from it. So why am I so confident?
Because I can assure you our work is not compromised by any conflicts of interest or other agendas. We publish our best investment ideas and we don't get paid a cent by any company to promote it.
This is truly unique, independent research into one of the only bull markets going on Planet Earth.
And there's never been a better time for you to get hold of this kind of investment intelligence.
Why?
Despite recent news reports that the resource boom is over, nothing could be further from the truth. All you have to do is take a look at what's happening on the ground. It tells you something that most analysts simply don't understand or lose sight of. But it's important you remember this during the ups and downs of the stock market.
Western Australia - and the small resource stocks based there - plays a key role in the third great Industrial Revolution in human history... the emergence of India and China's 2.3 billion people in the global market place.
The mining insiders know this. As Rio Tinto's Sam Walsh told an Australian newspaper: "The word 'boom' is a misnomer... I don't know what the right word is - maybe it's a paradigm shift. This growth is going to be around for awhile."
Boom or not - this is a trend worth being on the right side of.
Even more so now that, due to the 'credit crunch', genuine profit opportunities are so thin-on-the-ground elsewhere.
That's why I've dedicated myself to researching out the very best ways that Australian investors can profit from the gigantic resources boom right on your doorstep...
Stake your claim in the $70.5
BILLION "Big Australian Dig"
Despite the crisis in central banking, the China-driven Australian resources boom, the China-driven commodities boom continues unabated...
Coal from the vast opencut mines of Tawonga and Kogan Creek, to fuel the power plants of China and Japan... huge amounts of high-priced gold churning out of the new Telfer mine in Western Australia...
A $4.3 billion expansion of the Dampier-Bambury gas pipeline... a new $7 billion uranium and copper mine at Olympic Dam near Roxby that will create a hole "big enough to swallow Adelaide's city centre," according to The Australian.
Countless tonnes of lead, zinc and silver from the new Leonard Shelf project in New South Wales... a new alumina refinery at Gove... copper from five new projects now under construction... a brand new $2.9 BILLION nickel project by BHP, Australia's largest ever...
You get the picture.
As you can see to the right, spending on these projects is going through the roof.
But you know what?
Australia is STILL not producing enough resources to meet demand!
That's why over $6.1 billion was spent on further minerals and energy exploration in 2007/2008 - in real terms, the highest level of spending on record.
And that's nothing.
The Australian Bureau of Agricultural and Resource Economics (ABARE) says that mining and energy companies plan to spend a further $32.3 billion this financial year... and $36.5 billion in 2008-2009!
In other words:
Despite a cool-down in commodities,
the cash is still flooding
into Aussie resources
Western economies may be slowing... even heading into recession... but the massive expansion of emerging economies virtually guarantees long-term demand for Australian mineral and energy resources.
That's why you're witnessing an absolutely unprecedented $70 billion TIDAL WAVE of cash flooding through the Australian minerals and energy sectors over the next 24 months.
This is a powerful, long-term trend. As far as making money on the global markets goes for the next twelve months, this is the best show in town.
And, as an Australian investor, YOU have front row seats!
Feast your eyes on the map below...
As you can see, the scale of what's about to happen is simply staggering...
Rio Tinto has just sunk $1.3 billion into its Hope Downs mine extension, starting production early 2008...
BHP is pouring $2 billion into expanding its Area C operation, which will be completed by the end of this year...
Australasian Resources is kick-starting its own iron ore project, clocking in at a cool $2.75 billion...
25 new uranium mines in Australia will be required by 2020, says John Borshoff, the CEO of uranium producer Paladin Resources. "We are talking about building a whole new mining supply industry from a sector that has been dead in the head for 20 years but now faces trying to meet massive demand from a sleeping mode starting point ", Borshoff says.
According to official statistics, there are 97 projects underway right now.
To get you up to speed fast on the projects I think have the best chance of delivering you profits, I've just put the finishing touches on a new research report prepared specifically for Australian investors.
Our Best Base and Precious Metals Share Picks spells out which companies are set to benefit from the "trickle-down" effect of all the money being spent by the Big Miners to meet global demand.
I'll show you why I believe each stock has the potential to match the bull market in commodities prices stride for stride, and most importantly, how much you stand to make.
Starting with the virtually unknown 'Energy Metal' prospectors I've been telling you about. This company is sitting on a massive deposit of an element that is absolutely critical to the global nuclear and petroleum industries.
But, with 'Energy Metal', it's not just a demand story.
What about supply?
Just 7 days' worth of 'Energy Metal' left!
Because there are so few players in this obscure market, it's always been tight.
But NEVER tighter than it's been in 2008. In June 2005, when 'Energy Metal' saw its last peak in price, average inventories of each supplier added up to 4 weeks' consumption. Earlier this year, this plummeted to down to 7 days worth!
The high price hasn't slowed consumption at all. Miners still aren't keeping up with demand.
And thanks to the developments in oil extraction and nuclear power, producers will continue to struggle to match demand, possibly for years.
In July 2008, CPM Group released an in-depth analysis of global mine production. This was their conclusion...
"The delays in bringing new projects online have deepened the supply deficits projected in the market in 2009 and 2010...
"Demand is not only growing in the principal end uses of ('Energy Metal'), but in newer industries that are seeking to utilize (its) significant alloying properties."
A key ingredient of the new 'Nuclear Boom'
As global oil and gas reserves deplete, many countries are choosing to increase their nuclear capacity. According to the World Nuclear Association (WNA), 48 new nuclear reactors are planned for construction between now and 2013 alone.
It's the reason uranium stocks ballooned and deflated last year. And it's the reason why we believe demand for 'Energy Metal' MUST keep rising.
You see, it's VITAL to nuclear power plants.
Its toughness means it's ideal for turbines and nuclear piping, where heat and strength are at a premium. The WNA says each new reactor will require somewhere between 170 and 330km of 'Energy Metal' alloy. Any storage facility for nuclear waste will require additional amounts as well.
What would happen if reactors used ordinary steel materials?
Well, nickel and zinc make steel tougher, but they wouldn't stand a chance in the 300ºC-plus heat of a nuclear fission reaction.
They're not even worth considering. No government wants another Chernobyl on its hands. Because of this, there's no doubt the nuclear revolution will contribute to 'Energy Metal' demand.
It's safe to say that this alloy is absolutely indispensable to every area of the energy industry.
The queue to buy it is growing longer by the day... as is the queue of investors lining up to buy companies who hold deposits.
That brings me to why I'm writing to you today...
I've identified an Aussie mining small cap that's sitting on a massive 'Energy Metal' resource. In fact, they recently announced a 43% increase in their resource base.
Their plant is due to be completed in the fourth quarter of 2009 - with production start-up in the first quarter of 2010. When this happens, output is expected to build quickly to 33 million tons a year by year 5.
From there, this mine will keep producing at this rate for another 20 years.
That would officially make this tiny Aussie small cap the world's fourth largest 'Energy Metal' producer... at the very least.
Listen, investing in small mining companies can be risky. No matter how much research you do, things can go wrong. As I've said, this is not a 'bet-your-whole-portfolio' investment.
But by all accounts, this mining junior is sitting on a project that will make them a heck of a lot of money. You can too, potentially, if you get in soon.
Recently I advised my readers that a $7 target for this $2 stock within 12 months was entirely achievable. Now that they've increased their resource base 43%, I'm revising that target to $10.
With the stock hovering around $2, that's a potential 400% gain.
But that's just short-term. If everything plays out, and the market stays strong - as we think it should - you can expect this stock to keep rising.
This company's tiny size compared to the massive reserves it holds also makes it a prime takeover target. If that happens, it would almost certainly command a much higher valuation that it does today.
You need to move on this now, though.
In this great bull market, new profit angles don't stay secret for long. Right now, we're just ahead of the curve. In six months, or even three months, we'll likely see this company in the mainstream press.
Get all my research on
this stock- for FREE
If this story appeals to you, you need to get in now - otherwise you might discover later that you've missed the big junior mining story of 2009.
You'll find everything you need to know about this company - and the rare 'Energy Metal' resource it controls - in the brand new report, Base and Precious Metal Shares.
These are a collection of my very best resource stock picks for 2009.
With your permission, I'd like to send you them FOR FREE.
There is no charge. All I ask in return is that you take out a trial subscription of my newsletter, Diggers and Drillers.
When you do, you'll read about...
The next surprising turn
in the coal boom...
Right now, despite the gloom in the global markets, there's a frenzy of mining activity in Queensland. Drillers are invading Australia's northern coal fields to tap cheap, plentiful coal-seam gas.
They've already invested over $17 BILLION in infrastructure. There's more to come.
With gas prices three times higher overseas, there are obviously huge earnings to be made from exporting the gas in Queensland's coal basins. Half a dozen companies are leading the race - and their share prices will soon soar.
There's not a single investment newsletter around that specialises in hunting down these very stocks.
Diggers and Drillers stands alone in helping you stake a claim in this ongoing boom.
But there are some other URGENT 'Big Dig' opportunities I want to let you in on.
Many resource stocks have been dragged down by the wider market troubles this year. Now some cashed-up private equity players are starting to look for bargains.
What are they looking for?
"We expect to see PE [private equity] take advantage of good buying opportunities created in the current economic uncertainty - basically sound but temporarily distressed assets that investors have lost faith in, but these opportunities have the potential to yield high long-term value"
-- Ari Sharp in The Age, August 11 2008
I call them the 'three Ps' - people, projects and prospects. Good people don't usually get involved in bad projects. Most of the time in markets, it pays to follow the money. But with the miners, you follow the people. From there, you honestly and rigorously assess a project's prospects.
There are several more opportunities I've identified that tick all the right boxes.
Reply today and I'll give you my research on all of them - also free of charge.
Including...
The 'Ore-Crusher' digging
up massive profits
According to Fortune Magazine, the iron ore rush in the Pilbara is currently "turning Western Australia into a land of billionaires and boomtowns."
See, until now, players other than BHP and Rio wouldn't touch most deposits there. They didn't have to. The ore market was well supplied. And BHP and Rio owned all the railroads from the Pilbara to the sea. There was still plenty of high-grade "orphan ore" to be had, if you were looking for it.
But the cost of setting up a rail network to ship it to ports meant it simply wasn't profitable to mine when iron ore prices were lower.
Now though, with iron ore prices through the roof, it's a different story. Credit Suisse predicts that steelmakers will have to KEEP paying record prices for iron ore until 2013.
Question is... how do YOU profit from this in 2009?
We need to 'box clever' here. This story is not as new as it was 2 years ago. Many junior miners - Fortescue Metals being the biggest example - are well and truly on the investment radar and have shot up in price accordingly...
That's why I've been searching out 'pick-and-shovel' companies... outfits who're are making great profits from the iron ore rush... just not as directly as the miners themselves.
One such company - currently trading for a steal on the ASX - is perfectly poised take a HUGE slice of the windfall iron ore profits ahead.
This Aussie outfit is crushing increasing amounts of iron ore for BHP and Rio Tinto... and preparing it for export to China and India. Both of those mining giants plan to increase its iron ore production in Western Australia by 50% in the next 5 years.
That's a lot of very profitable red earth for this small independent contractor to crush.
It also provides specialist mine and infrastructure services to the growing number of resources firms in Australia. And finally, this multi-talented outfit provides specialized pipeline construction services for Big Oil. Major customers now include Shell Petroleum, Newcrest Mining and Newmont.
In other words:
This crafty little 'jack-of-all-trades' - which only listed on the ASX two years ago - is standing in just about every possible place where Big Dig profits are trickling down.
And it's not just taking money from the big guns.
This 'pick-and-shovel' company is also a very cost-effective solution for newcomers in the Aussie resources sector - attracted by high prices, but without on-the-ground expertise.
It doesn't care how big or small their customer is.
Cash is cash. Business is business. And business is good. The company has reported half-year revenue of $72.8 million, over 20% greater than the original forecast.
But it's only going to get BETTER for this undiscovered stock.
You'll see why in another free research report I'll send you, Iron Ore and Mining Service Tips for 2009.
I'll also give you my research on...
The Best LNG Stock in the World
This company is easily the best natural gas play in the world. It's got a lock on Australia's most valuable Liquid Natural Gas projects (LNG). Astonishingly-though it may be the best energy stock to ride China's boom-it is nearly unheard of in America.
At current prices, it belongs in any long-term energy portfolio. Its recent deal with PetroChina could add as much as $10 billion to its market cap, once the deal is final. And there may be many more deals to come.
If you own only one foreign gas stock for the next ten years, this should be it.
Another Pick and Shove Play with
ENORMOUS Upside Potential
Mining services and infrastructure is one of the fastest growing industries in Australia. It would have to be, with all the digging going on.
This stock was originally established as a subsidiary of diamond producer DeBeers. Today it has 5,000 employees and operates a fleet of 1,080 drilling rigs that offer clients earth, rock core, and rock chip samples for the mineral analysis purposes. It operates in the US$2.5 billion minerals drilling industry. Customers include Anglo American, Barrick Gold, BHP Billiton, Phelps Dodge, Rio Tinto, Teck Cominco, Xstrata, and Zinifex.
Currently the stock is criminally undervalued at around AU$2 - but isn't likely to stay that way for long.
Own Aussie Gold, Copper and
Uranium - in Just One Stock
I love the look of this low-profile, mid-level junior miner. And my analysis pegs them as a likely takeover target by a major - perhaps even before the end of the year.
Its portfolio of copper, uranium and gold deposits are world class. It's what you'd call a "Polymetallic miner". That means it can use the profits from one metal to pay for the mining of other, still more profitable ores and metals. Still, this company trades at just 12 times earnings.
A must-have addition to the portfolio of any forward-thinking metals investor.
Two Aussie 'Ag-Plays' to Help you
Capitalise on Rising Food Prices
The world-wide boom in agriculture is based on a couple of very robust factors:
- Per capita incomes in the world's largest developing nations are rising. Yet China's per capita income is below US$5,000. It has a long way to go before it reaches first-world standard of over US$30,000. And as it progresses, Chinese citizens will adapt their lifestyles appropriately. That means eating more 'luxurious' food such as meat, and eating more in general.
- Global farmland is stretched thin as it is. There is simply little scope to increase agricultural capacity.
How, as an investor, do you take advantage of this tightness?
We've identified two local agricultural stocks that I believe can help you do just that. The first is involved with controlling pests and genetically improving seeds. The second is the only fertiliser play in the whole ASX you need to know about... with a hit of mining exposure for good measure.
Both are great medium to long-term investments.
All up, you'll get four fascinating free investment reports outlining over ten of the best resource opportunities in Australia right now.
These are good buys in any market.
As the fallout from the credit crunch continues, exposure to the tangible assets these companies deal in could be VITAL.
Yet I'm almost certain that unless you read about them from us, you will never hear - much less profit - from most of these companies.
It would be a crime to miss this chance. And you don't have to...
, shares dropped, while mining giants Rio Tinto 
