Idaho General Mines, Inc. (GMO): Your Chance to Ride the Molybdenum Wave and Make Outstanding Profits

One of the most vital minerals for the industrial and technological world is molybdenum, a metal that few people understand. Demand for it is likely to grow strongly, while production increases may be slow. This leads to the potential for significant price increases and rich profits for molybdenum miners. And one of the best moly mining investment opportunities is Idaho General Mines, Inc. (Amex: GMO ), a company that owns the Mount Hope project in Nevada, with one of the world's largest molybdenum deposits. There is 1.3 billion pounds of minable molybdenum that are projected to be mined over a 53-year period. When mining begins in 2009, they will be selling about $1 billion a year of molybdenum (based on today's prices), but it could be much higher than that. Right now the market cap of this company is a mere $100 million. To me, this means that an investment today in GMO could become worth many times that amount in a few years. Expect volatility, but my advice is to begin buying this gem of a company now and hold it for years, unless the company falls apart or environmental challenges obliterate the opportunity. I don't think those risks are anything to be worried about.  Idaho General Mines, Inc. is taking significant steps now to be ready to mine profitably in 2009 and beyond.

As for the price boom that may occur in molybdenum, and the general ignorance in the market about molybdenum (music to my ears: this is a chance to beat the market to this opportunity!), here is an excerpt from Ken Reser's "Moly Prices: $ Up, Down, Sideways?" (from kitco.com): 

To myself, many, if not most Molybdenum and other base metals commentators see only parts of the greater picture although I have read estimates from a couple of respected research groups that call for 4 to 7% yearly increases in Moly demand thru 2009/10 and beyond.  Most of the articles I’ve read, as do the Chilean Gov’t Mining fellow’s comments, fail to grasp the impact of this ongoing worldwide energy boom cycle we’re in and an increasing set of new factors attributing to more and more Moly being sought, bought and used.  Yes, Stainless Steel is one of the largest uses, but then while they talk of the odd pipeline or drill tubing use, for the most part they never mention the dozens of massive double hulled oil super tankers under construction or currently being commissioned to replace the old single hulled tankers that must be decommissioned by 2010 and at the same time create increased carrying capacity (greater #’s of tankers) around the globe.  They never mention that there are about 81,000 miles of large diameter pipelines being built and on the drawing board around the globe.

The mainstream writers don’t ever mention the massive new demand for Moly in refinery catalysts to meet increased refining demand for gas & diesel fuels or other petrol & chemical products.  New refineries are being built in far off places, even if not here in NA.  No, nothing either on Coal to liquid fuel plants being built in Asia, (both processes need large amounts of Moly based desulfurization Catalysts constantly) nor the massive Chinese shipping and military fleets being constructed and the amounts of steel/Moly alloys used.  Anyone mention the test plant the US Gov’t built to test and successfully create a high grade Jet Fuel from Coal not so long ago?  No mention of China putting approx 400,000 new vehicles on the road in March last year, in country, in one month alone.  What’s a few hundred million Asians trading bicycle’s for cars got to do w/ anything? Molybdenum that’s what, and Copper as well.  Next factor the worldwide increase in fuels & energy consumption and what that alone will do to Oil prices.  Higher crude prices and we see more exploration, that’s always a fact.  More production, more exploration, more refineries, more pipelines and more drill steel etc, more Moly.   Did anyone ever mention Plasma Televisions in the same breath as Moly to you?  Well a manufactured Moly powder product is present in the screens, and how many millions of wide screens will be made in years ahead?  We’re beginning to see people grasp the fact that major nuclear reactor construction lies ahead in many parts of the world with China in the lead w/ 20 odd new ones in the works.  If memory serves me from my past editorials research, I believe the reactor vessel alloy uses about 16% Moly, and all the piping would be in the 3-6% range.   Having researched and written a few editorials in the last two years regarding Molybdenum, I continue to be amazed at new uses and Moly related discoveries being made.  I don’t profess to be any kind of an expert, but I do keep coming back to the fact that very few analysts have a very realistic or comprehensive view on Molybdenum going forward and most just let it slip under their radar screen period.  Was it not one of the biggest percentage gainers of any of the base metals over the last two years, even while now trading at $25.00 range being down from the high of +/- $39.00?   And is it not currently still holding strong from $24.00 to $26.00, all the while being ignored by almost all metals analysts?  One gentleman comes to mind whom I feel has shown a very good grasp of the Moly situation and whose research and writing on the topic of Molybdenum, is James Finch of the Resource Investor.  His work has been excellent to my mind to say the least, but also paid little heed by all mainstream mining analysts it seems.

 Get ready for the rich future of molybdenum now by investing in GMO. Jason Hommel thinks the opportunity is strong enough that it's worth putting 10% of your 401k into this baby. That's a but much for me, but 5% might make sense. Remember, this has the potential to increase by five to ten times in the next, say, five years. No guarantee, but the potential is simply huge.  Do your own due diligence, read their SEC filings (that helped convince me), check out other related factors, and then, if you agree, get some!

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