Monday, September 17, 2007

How to Choose a Molybdenum Stock

What you are really mining is money, veteran geologist Don Davidson told us during a recent interview about molybdenum. It applies to any mineral, whether gold, silver, copper, uranium or, of course, molybdenum. All mining, regardless of the commodity, is just really based upon your mining dollars. Its the value of the particular element and whether it is economic to extract it or not, he explained.

Despite the shrill forecasts of some analysts who claim we should expect a price correction in base metals, molybdenum is very much in demand. A lot of people envisioned this flip in the molybdenum price to be a short-term think, but I think with the economies that are rolling in Asia, especially India and China, we are never going to see the old price level again, Davidson forecast. Another reason why the price of molybdenum could stay high comes as result of BPs corroded oil pipeline in Alaska. We talked to a few industry insiders who believed BP could have increased the corrosion resistance in their oil pipeline had they added a tiny percentage more of molybdenum to the pipeline. Oil companies are probably going to require more molybdenum to prevent another costly oil spill.

Our discussions with geologists, investors and industry insiders reinforce the notion that the bull market in molybdenum is very much alive and kicking higher. We received an interesting email from Doug Fosbrooke, head of investor relations for Roca Mines, as we were soliciting comments about molybdenum demand. He wrote, I received a call the other day from a Canadian-based representative of a Chinese moly/steel/metals dealer looking to buy MAX (the name of Rocas molybdenum mine) concentrates. Even after telling him we had signed an offtake agreement for 100 percent of our production, the party still expressed strong interest in doing business with us. Another Asian dealer, with whom we had been in discussions to provide project financing capital also contacted us in the past week looking for our product. When a small and soon-to-be-producing molybdenum company is pursued by Asian interests, after it has widely announced that next years production has been sold in advance, we feel comfortable in expecting a stable, if not higher, molybdenum price. That should bode well for newly arriving molybdenum producers, such as Roca Mines, which hopes to start mining its MAX deposit in Canada in the fourth quarter. But how can an investor safeguard himself from the potential arrival of other, less known wanna-be producers?

As we did with uranium and coalbed methane stocks, we compiled a list of molybdenum-specific tips for investors. For advice on how to separate the good companies from the bad, we turned to geological and engineering experts to guide us. Both Dr. Nick Carter and Don Davidson have several decades of experience in evaluating molybdenum projects. For example, Blue Pearls Yorke-Hardy molybdenum deposit was renamed the Davidson deposit in honor of one our experts. Carter and Davidson are both members of the five-man senior exploration board for Roca Mines, which hopes to find additional molybdenum beneath the existing high-grade MAX deposit in British Columbia.

1.Keep your eye on the price of molybdenum. Nick Carter advised, One of the biggest pitfalls related to molybdenum is price. Weve seen spikes over the years. The last one was in the 1970s. One of the things you have to watch out for, in terms of molybdenum, is the price. Its been pretty good the last couple of years and all indications are its going to remain, perhaps at these lofty levels. Huge deposits and good grades are required to withstand lower prices.

2.Find out the average grade of the molybdenum deposit. If any investor were to phone me and want to buy stock in moly mine, my immediate response would be, Well, what is the grade? Carter said. And if the grade isnt a little bit better than 0.1 percent, and preferably closer to 0.2 percent, Id say, Well, you had better think about this a little bit. Carter explained he liked the MAX deposit because at 2 percent, Roca Mines would yield 40 pounds per ton of molybdenum. At $20 pound, the gross in situ value of the deposit would be $800/ton. Mining and operating costs are said to be less than $100/ton, yielding an operating profit of $700/ton.

3.How deep is the molybdenum deposit? Usually the deeper you go, the better grade you have to have in order to have material that can be mined for profit, advised Davidson. The deeper you go, your expenses can increase. Therefore, youd generally have to have higher grade at depth.

4.Is it underground or open pit mining? Davidson discussed Adanacs deposit in British Columbia, Because its an open pit, your mining costs are much lower. Carter advised on deposits where average grades run low, If its 0.1 percent, it had better be a big deposit and it had better be open pit, too. Were not talking underground here. With 0.2 percent, you get a little more option, if you can get something thats reasonably large and with grades approaching 0.2 percent. Cost of production in many open pit mines should be in the $10 to $11/pound range.

5.What is the timeline for production? Some companies plan to begin molybdenum production this year or next. Others are looking a few years out. The price is here now, but three years from now, when your mines up and running, the price may be $8, Carter explained. Maybe youre not going to be able to cut it if youve got an overall molybdenum grade of 0.1 percent or less. It is safer to evaluate a molybdenum company on a lower metal price than stretching your expectations by appraising it at the top of the market. If molybdenum can stay north of $10-12/pound, it should be pretty good times, Carter noted.

6.How pure is your moly concentrate? Carter advised investors find out answers to these questions: Is there any copper associated with this molybdenum deposit? And if so, how much copper? Carter warned, If theres something like 0.05 or 0.1 percent copper in the molybdenum system, this could be enough to really screw it up in terms of concentrate sales. Theres not enough (copper) to recover to make any money, and you could have serious problems in producing a moly concentrate thats going to get you top dollar. In the Kitsault molybdenum mine, there was significant lead content in the moly concentrate. They took a serious penalty on that and they had to install a leaching plant to get the lead out of the concentrate, Carter explained.

7.Does the molybdenum have a contract or offtake agreement with a leading buyer? The most telling comment with regards to purity of the moly concentrate is: Does this company have a contract? Carter pointed out. If theyve got a contract, you can be pretty sure the concentrate grade is going to be okay. There are specifications outlined in the agreement.

8.What is the infrastructure like? Carter talked about one company, which he explained was in a remote location, and which he asked we not name. Theres no electrical power! he exclaimed. Theres no hydroelectric, no power lines. He did talk about how previously, with other mining operations in this area, power was produced by way of diesel-fired generators. But in todays world, I dont think theyll look at that, he said. Its too expensive. Big operations will require being on a power grid to function, while smaller ones, such as Rocas MAX mining operation, can economically operate with diesel generators.

9.Look for hidden problems in a molybdenum mining and processing operation. Is the processing facility (mill) located nearby? asked Davidson. Or will it be trucked hundreds of kilometers? Other problems an investor should find out about include: (a) workforce availability, (b) the capital costs and payback on those costs, (c) mine permitting, (d) anti-mining activity in the jurisdiction, (e) financing for the project, (f) access to the deposit (can the deposit be accessed at all?), and (g) the companys market capitalization in relation to timeline for production. Does the deposit have blue sky potential? The Climax started small and became a world-class molybdenum mine.

COPYRIGHT 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to and other publications. StockInterviews Investing in the Great Uranium Bull Market has become the most popular book ever published for uranium mining stock investors. Visit

Pros And Cons Of Stock Trading

Whenever a company issues stocks, it is an attempt to raise capital in order to invest in some endeavor. All over the world the stock market works on this basic premise. When a company needs money, it will simply offer the stock and the options thus purchased will entitle the stock holders to a percentage of the profits, once the entire concern gets going.

The Internet has made things much faster and removed all geographical restrictions. Trading now takes place 24/7 because some part of the world is always busy with business. The Internet also makes it easier for anyone to take part in stock trading. Leading stock market firms also send daily emails with tips to their customers on how the market is expected to move today.

Every one has heard about stock trading but very few people actually know of the advantages of getting involved. Like any business venture, stock trading is not all advantageous and it is important to know both the pros and cons of stock trading.


Instant Returns

Active stock trading means you get almost immediate return on investment. You get better returns in a short time as opposed to buying and holding your investment for years at a stretch.


Through the Internet you can trade in any part of the world. You have no restrictions on the type of stock you trade in or what currency you trade in. You can browse the Internet looking for constantly moving stocks.


You already know most of the companies offering stocks so you are not on strange ground. With a little time you can understand the micro dynamics to trade effectively.



Stock trading leverage is very low when compared to Forex trading or futures trading.

Short selling

There is a rule against short selling that entails waiting before the price picks up again. This essentially limits the amount of profit a trader can make. There is no such constraint in Forex trading.


There is a substantial cost associated with stock trading that is unique to this market. This can quite often make stock trading impossible for almost everyone. You will need some amount of money before you can start investing in the stock market.

All trading stock, Forex, futures, involves some amount of risk with their own sets of pros and cons. It is up to you as a trader to evaluate all these issues before you begin trading.

Alan King is a writer that concentrates on helping people better themselves, for cutting edge information you NEED to know about stock trading before you try to cash in on this multi TRILLION dollar industry I strongly suggest that you check out my friend Mark Crisp's awesome free 9 page e-book at

Investment Property and the Wealth of Nations

Why are rich people rich and how do they retain their wealth through several generations? In this article we try to examine how real estate as seen in investment property has played a large role in generating large amounts of wealth, how it has also been used to retain wealth to sustain several large clans and what you can use in offshore investments.

Wealth Generation with Investment Property

Forbes magazine once commissioned a study and found that most of the rich people today other than a few high tech entrepreneurs like Bill Gates and the Google founders made their money in real estate. But remains, why is there an allure of Investment Property even today?

This is because traditionally, most people consider Investment Property to be a secure investment and Investment Property prices rarely fall and prices continue to rise. Since real estate mimics economic cycles, rich people start building new properties for others to stay and since the profit margins associated with properties can be quite substantial so their wealth increases with each new Investment Property that they develop and subsequently resell. Thus we learn that at the highest stage, investment property, real estate development and finance all move together to make the rich richer then evern before.

Why the Rich retain their wealth

Many people know of the Hilton empire and think about the taxes that they save each year because of the legal trust structure that holds this wealth together. Actually trusts which are legal devices to shield offshore income from taxes help to protect wealth and prevent an heir of a rich estate from squandering it. One way is by having large trust companies to administer the trust and then allow beneficiaries to get a fixed sum.

But what do most trusts invest in? It is no surprise to note that cash flow investment properties like the famous Hilton hotel chain provide a constant source of cash flow into such structures and as mentioned prevent a few heirs from squandering the proceeds of the trust. Rental Income and Hotel Income from investment properties kept in trusts therefore help rich families retain their wealth from generation to generation. Thus we note that rental income and cash streams from investment properties held by trusts can allow for wealth to be transferred from one generation to the next.

Wealth of Nations and Investment Property

Since property represents a large portion of a nations wealth and both the rich and poor people are so enamoured with it, many countries codes and laws have specific legislations protecting and regulating Investment Property. The rich have teams of lawyers working for them when they look for investment property since some of the property codes and statutes in both local and offshore jurisdictions can be potentially fraught with legal loopholes. So if you want to be a wealthy property investor, you need to have good professional advisors since every rich businessman today is as good as the team of advisors that he has working for him.

Copyright 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)

Joel Teo writes on various financial topics relating to Ahwatukee Real Estate Investment. Signup for his free online Real Estate Investing newsletter today and gain access to the Six Day Real Estate Investment Profits Course now at

5 Things You Need To Know About Your Forex Trading System

1. Risk Reward Ratio.
The risk reward ratio of your system should always be 1-2 or more, for example if you are risking $1 then you need to get $2 back or more. If your risk/reward is 1-1 or less then you have to win more than %50 of the time just to break even let alone make any money! However if you raise the risk/reward to 1-2 then you now only need to have 33% winning trades to break even. Are you starting to see how important this is in the long run?

2. Win/Loss Ratio
The win/loss ratio is how many winners you get for every loss on average, this goes hand in hand with risk/reward. You should expect at least 1-1 win/loss ratio or more in a good system. Any less that 1-1 and you would need a higher risk reward ratio to make the system viable.

3. Drawdown.
The drawdown of your system is the number of consecutive losses in a row you will encounter. Hopefully this should not be more than 3 on average. However again if you have a very high risk reward ratio then you would be fine with more losses.

4. Past Performance.
Getting data on past performance of your system is vital to your confidence and your trading account. Knowing that it performed well over the last 10 years would be sufficient.

5. Average Trade Drawdown.
Although this is not vital it helps to know how far a trade will go against you on average before moving into profit, in your testing if you find that your trades retrace often you may find it more profitable to set your entry at the retrace.

You may be thinking "how do I go about finding this information about my system?" well its really simple, you don't need complicated software or anything like that. All you need to do is have your trading system rules in front of you and move forward candle by candle on your chart and make notes of your entries and exits, profits and losses. You will soon see if you system has stood the test of time.

Once you have a trading system that you are confident has passed all the above points then you can feel sure you have the best chance of success trading it. Be sure to stick to your rules and trade the system as you have tested it, now you have a good feel for how your system should perform on average you can soon see if you are making mistakes in other area's.

I hope this article helped you to choose a forex trading system or helped you accessing your current system. If you have any questions don't hesitate to contact me, I will reply as soon as possible.

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Forex Trading - A Simple 4 Point Way To Making Big Profits

I read a lot about how difficult forex trading is, but making money from Forex trading is essentially simple if you keep in mind the following 4 points.

I have tried to illustrate this live and showed 3 trading opportunities and all made great profits and had low risk.

Lets look at this simple way to make profits more closely:

1. You Are responsible

If you think you can buy an e-book and make yourself rich by paying $100 think again.

Most of the advice sold on the net is not worth the paper its written on. If you want to buy a system keep in mind the following:

1. Make sure the vendor trades it and has made real money and the track record is NOT just a simulation.

2. If you do buy a system make sure you know how and why the logic works:


If you dont know why it works you will not have the discipline to follow it and discipline is essential when trading.

If you dont have discipline to apply it you dont have a method in the first place.

2. A simple method

If you follow a system or build your own keep it simple.

Simple systems work best and are far better than complicated ones.


Because they are less likely to break in the face of ever changing brutal market conditions.

How simple?

We use support resistance and just 3 indicators:

Stochastics, Bollinger bands and RSI.

The best methodology to use is to utilize breakouts and sing trade within the trend.

Note: Never day trade this is a great way to lose your money quickly as you have no valid data to work with.

Finally, if you use a system like the above - always trade on confirmation from your charts to get into your position so price momentum is on your side:

Dont guess or try and predict!

This is a mistake made by many novice traders.

3. Money management

Trading using critical support and resistance means that stops are easy to place and risk can be kept low. 4. Targets

Trade with a target where you want to take profit.

Resist the temptation to trail stops to quickly that will simply see you knocked out the trade by volatility.

Once you have reached you target you can liquidate, or trail your stop then but not before.

Dont make money management complicated or try and lock in profits to quickly or have stops to close this is a major reason traders lose.

This sounds to simple!

Yes it is simple - but it works.

Many traders think the more effort they put in the more they will get out of trading, but there is no correlation between the effort you make and profits you achieve.

Work smart not hard.

Trading is essentially simple and relies on a logical robust method you understand.

You will then have the confidence to apply it with discipline.

Many people try and beat the market or think they can win all the time and buy bottoms and sell tops You cant!

The aim of forex trading is simply to make above average profits and if you keep it simple you will.

If you try and be to clever, or get to complicated in your approach you will lose.


On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at