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Goldman Moly forcast
Nov 30, 2009 04:51PM
Goldman just upgraded the steel sector and gave a 2010 moly price forcast of over $33 US.
Roca Mines, They are cash flow positive with costs below $6.00 lb for moly. Trading at .47 cents the book value is .66 cents. They have a high grade moly mine with 2 new high grade discoveries and deep drilling to find a larger deposit. They will soon go from 500 tonnes per day to 1000 tpd. They also have a joint venture project with cream minerals in mexico that looks very good with drilling and results to come out in the next 6 months. The results are most likely to be very good as they are drilling directly into the silver viens that are there, close to old high grade drill holes. The old drillholes are suspect of loosing much of the gold and silver as the core recoveries in the pay zone were low.
So you have cheap stock that is trading below book value, has technically been running support for weeks, Goldman upgrades the Steel sector - that means that they are already in. These guys have immediate exposure to moly price increases - 11 to 33 is a price forcast by goldman - thats a triple in moly price by the end of next year, plus no debt, plus upside from defining existing moly high grade zones in the mine, plus the potential for a large moly zone below the existing workings that they are drilling now, plus exposure to a 55 Million ounce silver "inferred resource" that they are drilling to move that to the M&I 43-101 compliant reserves. Plus gold in that system and lots of untested blue sky along 5 km of strike in a large land holding.
Ok I guess i'm excited. But check it out. Theres info on the roca mines website and cream minerals. Oh yeah they are going to release earnings from this summers quarter soon - the little push up in moly prices during that time should give them a little boost by year end.