Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

Nevada’s Massive Mountain Of Molybdenum Makes Milestone

Commodities / Molybdenum Jul 16, 2011 - 05:13 AM GMT

By: Jeb_Handwerger

Commodities

I introduced General Moly to my subscribers in May of 2009.  At that time, the permitting process was not paramount, financing was the critical consideration as we were still emerging from the depths of the mining sector crash during the 2008 credit crisis.  At the same time, China (FXI) was embarking on a search for potential mining acquisitions in the West.  It was inevitable that a plum such as General Moly (GMO) would catch Beijing’s eyes. 


           General Moly sits atop a massive mountain of molybdenum in Nevada called Mt. Hope.  Mt. Hope is the largest and highest grade asset in North America.  Nevada happens to be one of the world’s most friendly mining jurisdictions.  The union between China and GMO was inevitable.  In order to make steel out of iron ore, molybdenum needs to be introduced into the mix.  Ore can not be catalyzed into steel without the addition of molybdenum. 

           Mt. Hope’s high grade ore could be mixed with China’s low grade moly to produce a desired mixture which is needed for China’s massive infrastructure plans. China cast covetous eyes on this American Bonanza as steel demand is increasing.  China has major infrastructure plans such as building 27 nuclear reactors and 10 million social housing units, requiring a lot of steel.  China has also classified molybdenum as a national resource, curbing its own domestic production and forcing banks to look overseas. 

           Moly is still trading below $20/lb way off its pre credit crisis highs of over $30/lb.  Chinese demand is increasing as the percentage of their usage of alloyed steel products are way below their neighbors like South Korea and Japan.  As China competes with its neighbors and invests in its own infrastructure their use of molybdenum as an alloying agent will also expand.

           Several weeks ago China plunked millions of dollars into the waiting arms of GMO.  They were confident that water rights will be granted and that the requisite permits will follow.  So confident are they in anticipating regulatory success, that they fast tracked the funding. 

           Today, GMO received the water rights which were expected back in March.  This is a long awaited milestone for my patient readers who have been patiently following this niche mining company.

           Significantly other institutions have purchased shares of GMO namely Posco, the giant steel company from South Korea as well as Sojitz, the major Japanese trading company.  For years, China has been the main supplier of the forenamed entities.  Now China is experiencing a supply-demand shortage of its own concerning molybdenum.  General Moly is one of the only pure moly developers with significant partners.

           In addition to Mt. Hope, GMO has the Liberty Project also in Nevada, which the market is giving little value.  GMO announced drill results recently from Liberty.  The company is planning to release an updated resource estimate on this project in the third quarter and ar planning to update the 2008 pre-feasibility in 2012.

           Recently institutions are scrambling to pick up vital molybdenum assets.  Mercator Minerals paid a 38% premium for Creston Moly, which is far less advanced than General Moly in the mining process.  General Moly has revealed how an analogous buyout of their assets would be worth at least $7 a share.  Additionally this Mercator buyout of Creston is a continuation of the trend of consolidation, Hudbay Mineral is taking over Norsemont Mining for millions of dollars.  

           As GMO de-risks Mt. Hope as they trudge through the final stages before building the mine, it is quite important for investors in mining stocks to exercise patience and fortitude.  There are sometimes bureaucratic and regulatory delays which might make GMO’s price tend to base over several months and then return to its upward trend.  However, many major institutions such as Posco, Hanlong, Arcelor Mittal and Sojitz have done their due diligence in this asset and are confident.  One other consideration,  General Moly is the only pure molybdenum play on the major U.S. exchanges.  Thompson Creek(TC), the former pure play has expanded into precious metals and has diversified away from molybdenum. 

           General Moly has been in a downtrend for most of 2011 as it has awaited for the recent ruling.  Stay tuned for any upside breakouts.

By Jeb Handwerger

http://goldstocktrades.com

© 2011 Copyright Jeb Handwerger- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Michael Smidutz
16 Jul 11, 21:01
????

It doesn't bother you and others that China owns more of America than Americans do?

You will wake up and notice when Mandarin is taught in school.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules