Thursday, October 08, 2009

Commodities, Copper and Zinc: Alcoa beats the street - is it time to pick up Juniors? TNR.v, CZX.v,, FCX,, FXI, AA, BHP, RTP, AUY, VALE

Gold is hitting new highs, US Dollar is giving up on its reserve status and Inflation is just around the corner to be recognised as the major financial outcome of printing presses all around the world. Aluminium is not a metal for us to follow, but Alcoa's results are very important - we are taking it as a confirmation of Inflation filtering though the financial system and into Industrial Commodity Cycle. Do you know, that there were times when even Gold Bugs like us were being jealous looking at the Copper and Zinc prices? We have wrote about recent development in Los Azules - our favorite Copper play in Argentina, with Minera Andes and TNR Gold TNR.v involved - we are very surprise to find out hesitation in the market place now. Minera Andes became a 100% owner of the deposit with TNR Gold confirming its back-in claim still valid for 25% of Northern part of the Los Azules. Does Xstrata control Copper prices or Chinese really do? Does 40 mil USD worth more then 37.5% of 414 mln USD Los Azules Implied value according to Rob McEwen with recent rock bottom valuations of Junior developers sector? We know the trick: you can complain only if you are fully invested at higher levels - in all other cases you are blessed with opportunity. It is even little bit less anxious time now: we have been here before, right after collapse in 2001.
Look at the chart below: previous Reinflation phase after crash from 2005 coincide with Zinc prices rising parabolically.

Who can tell us that it will be the case again? Guys like Brook Hunt (very respected organization that follows the metals industry) - they are talking about large number of zinc mines that are reaching the end of their production life…Xstrata’s Brunswick mine closure by itself will reduce global zinc supply by 4%. There is an anticipated very large and prolonged shortage of zinc supply looming (beginning in 12 to 18 months time). How to play it? We stick with what we know and you should investigate for yourself. We like to invest with those who knows the market and where it is going.

Canada Zinc Metals CZX.v now has very prominent shareholders - players in Zinc market like Chinese Tongling and Lunding Mining Togling has paid for 13% in the company price of 0.425CAD above even today's level of 0.4CAD.
We have called the company and can share with you some information for your further consideration. Please do not take anything as an investment advise and contact the company to verify all information.

"CZX’s Cardiac Creek deposit (Akie property) represents one of the top 10 largest undeveloped zinc deposits on the planet. The deposit is very good grade with a very high grade section within it that could be mined first (quicker payback of capital).

CZX also has a very large prospective land package – this represents a district scale opportunity in mining friendly BC, Canada.

Infrastructure in the area is relatively advanced (full road access, railway, power facility, deep sea port).

Neighboring property / deposits owned by big players Teck Resources and Korea Zinc.

We are going to China to visit Tongling and other Chinese companies next week for further discussions on our project development"

Company's presentation.

We will see in the nearest future, whether this market represent to us again opportunity to step in the Commodity Super Cycle and the more boring and forgotten story seems to be - the best value you can get with all proper investigation of management and property strengths.
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