Now this is how PR/IR should/could be done...Okay let me explain.
Read the following article. I found it on www.321gold.com because the subject of molybendeum is interesting to me. It is a very short article and sure to peak the interest of anybody who reads it. Near the end of the article is the "HOOK". It says that if you email the writer he will tell you the name of the company that he believes "WILL TAKE OFF AND OFFERS MAGNIFICENT RETURNS ON INVESTMENT--YADA YADA ETC ETC". I took the "BAIT" and wrote him. I will show the response on my next post, which I will post immediately.
THE ANSWER I RECEIVED WILL AMAZE YOU. IT DID ME.
THIS IS THE TYPE OF PR/IR HELP THAT KELSO NEEDS. THE PARALELS ARE OBVIOUS. REPLACE THE NAME OF "MOLYBEDENUM" WITH "NEW PRESSURE RELIEF VALVE THAT WILL REVOLUTINIZE THE RAIL-TRUCKING-SHIPPING INDUSTRY".
THIS GUY (AUTHOR OF ARTICLE) IS AMAZING. READ ON AND THEN READ MY NEXT POST.
Abe19
Here is the article.
Economically Speaking, Molymania is for real
Kal Kotecha
February 18, 2005
Getting a leading edge on making smart investment decisions is easy. That's what I tell my College economic students. The foundation of any sound decision is based on understanding macroeconomics as it focuses on the world's economy. And, there is nothing that will give you more of a leading edge than knowing what is happening in the backyards of other countries.
Today, I want to concentrate on a cutting edge metal known as molybdenum. But first, we'll go back to basics. In this article, I want to concentrate on Gross Domestic Product (GDP) and Molybdenum. GDP is basically the sum of all the goods and services a country's economy produces in a given year. There are four basic components of GDP:
(1) Consumption,
(2) Investment,
(3) Government and
(4) Exports-Imports which is net exports, but in the current case of the U.S. it is Imports-Exports, which is net imports.
Consumption is basically all the goods and services consumed and purchased by individuals. For example, buying furniture or going for a massage. This is the biggest percentage of GDP around (60%). Investment contributes around 17-18% of GDP, mostly by businesses on machinery and equipment. Government spending varies, and it's mostly spent on social programs, military, health care and education.
The higher the GDP, the faster the economy is growing. Do you know which "major" economy has the fastest GDP growth? Yes, China. Almost double digits, whereas the USA has about a third of that growth. Why is China so ahead of the rest of the world? One reason is that they have a very methodical way of doing business. The Chinese are focusing on manufacturing and exporting (also look at some of the new Chinese manufactured products... the quality is comparable to that of North American goods). They are also literally building a city the size of Houston every year. The Chinese government had a plan of growth years before Hong Kong became a part of China. Let's compare with Russia. Russia "commercialized" overnight which resulted in high crime, very little sense of stability in their economy, and a hard place for foreign companies to do business with. China is a gold mine (literally... we'll discuss more about that in my next article).
The Chinese are consuming steel, molybdenum, and other resources by the truckload. There are still hundreds of millions of Chinese that need to be urbanized. New cities need to be built. High rises and building construction will skyrocket. I believe we are still in the first leg of the commodities/metals boom that will last for over a decade.
When an economy, like the Chinese, grows by over 10% per year, you can anticipate that large amounts of steel is being consumed. Steel is used in many industries, including housing and auto. Moly is an omnipresent metal that is used as an alloy for steel. A large new moly mine has not been opened in over 25 years. The price has gone from $3/lb where it stabilized for the past two decades to over $30/lb close to where it is now. When new mines come aboard, will the price decrease? Probably but many mines are still profitable at Moly between $4-6/lb. (I do not foresee moly going that low for a long time, if at all again).
Will 'molymania' fade into the background? Consider this: it takes time for a mine to go into full production. First one has to buy a property, and then get financing and permits to drill to see if there is Moly in the ground. Say the results are deemed to be profitable, then roads and hydro lines may be needed to be built, which costs more money. Not to mention passing through environmental legislation. Therefore, it may take years for a mine to be in production.
Currently, there is a big supply and demand gap in Moly. Not enough new supply to meet the increasing demand. It will take many years before there are sufficient 'stock piles' of Moly to meet the ever-increasing demand. So do we have a 'moly mania?' It is a rhetorical question. In my opinion, even at $15/lb we do, and I believe that if Moly stabilizes there, there will be many happy investors.
Before supply eventually meets demand, I believe that the next few operational mines will more than likely make substantial profits for their shareholders. I feel that one of the best ways to capitalize on this industrial boom is by buying shares of good quality Moly companies. Today, you can take advantage of this 'leading edge' metal. There is one Moly company I feel has great potential. Email me at kkotecha@rogers.com and I will share with you which company and why.
Kal Kotecha B.A., M.Ed.
February 18, 2005
To subscribe to Kal's FREE newsletter email: kkotecha@rogers.com
321gold Inc Miami USA