Kaiser says Blue Pearl's Endako deal shows moly's legs
2006-12-15 14:15 ET - In the News
John Kaiser, writing in a Nov. 16, 2006, Blog, says the October, 2006, acquisition of Thompson Creek Mining by Blue Pearl Mining Ltd. ($7.28) for $575-million is a sign that "molymania" has arrived. The California letter writer is not recommending Blue Pearl, owner of the Endako molybdenum mine in British Columbia, and has not said buy in the past. Molymania is based on the optimistic notion of a rapidly expanding global economy. Blue Pearl has positioned itself to absorb the winners in a manner that increases its own value. Blue Pearl's Thompson Creek deal overnight turned the junior into an intermediate mining company specialized in molybdenum production. That shift gives Mr. Kaiser a reason to take his significant investment in Leeward Capital Corp. (12 cents) seriously. Leeward's focus is moly at nearby Nithi mountain. As of Sept. 30, 2005, the Endako deposit had 51.7 million tonnes of proven and probable reserves at a grade of 0.07 per cent Mo, which the current mining plan would deplete by 2011. At $26 per pound, this has a gross value of $1.6-billion, Mr. Kaiser notes. Endako has additional stockpiles of 22.2 million tonnes of 0.046 per cent molybdenum that will keep the mine open after 2012.
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