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Why I believe that this little mining stock trading at 30 cents a share will hit the 2 dollar mark in the next 60 days…

Why i believe this 30 cent stock is going to hit 2 dollars over the next 60 days…

Some contacts of mine have been asking me to explain to them why it is that Amarium Technologies has been doing as well as its been doing of late and why I believe the future is so bright for the company and, by extension, their stock price. So I decided to put my thoughts on the matter down to clarify..

Amarium is a perfect example of what I see over and over again on the OTC market..

And have seen for years…

And that is that companies that are positioned on the correct trend are the companies that always seem to enjoy the most explosive increases in share prices…

the trouble is that often, it is not so obvious to spot the correct market trend, often it is not the trend that is getting the most press at the moment. As those of us in the financial press tend to focus on very narrow and let’s say easily noticeable news to purvey to our audience. This often has the effect of obscuring, rather than illuminating the actual tectonic shifts where astute investors are quietly making the most money…

And this is precisely the case with Amarium Technologies…

The company is presently the sole owner operator of a copper mine in the mexican mining belt region of michoacan.

copperIt has been hard for copper to get a lot of attention of late as it’s older, more flashy cousin gold has been getting all the ink for last few years….But as gold fever has cooled just a little bit over the past 9 months or so some very astute institutional money people that I work with have switched their conversation to the base metal of late. And for good reason….

I will explain in a moment why I believe a small OTC player is perfectly positioned to take advantage of this renewed interest in copper in a moment but it is crucial that you fully understand just what copper represents and what people who are invested, or are investing heavily in it are communicating to us with the decision to do so…

I think the words of John Stephenson of First Asset Investment Management in Toronto put the sentiment best when he told Bloomberg…

“Copper is the preferred way to play China Growth, and it should be very strong. The commodities that will do well in 2013 are the ones that China does not have a hammerlock on in terms of their ability to produce and copper would be that.”

warrenIt is interesting to note in the gold mania that has swept the financial world of late no one really talks about the use of the metal…Well none except for uber investor Warren Buffett who has famously quipped that gold “doesn’t do anything but look at you” his charming way of saying that gold has no use…

Whereas a metal like copper on the other hand is arguably the most useful metal in the world today.

And that is what Stephenson is getting at. Playing copper is playing growth. It’s playing building, urbanization.

It is a bet on electrical grids. On the multitudes of wires that encompass an urban population. On more cars, trucks appliances.. And to drill down even further you have to look at the metals number one consumer in the world China to understand what Stephenson really means..

To visualize copper consumption in china think of it this way. China, every month, uses enough copper to encircle the globe at the equator….100 times…

But to dig deeper into the opportunity that copper represents you cannot, as you know, only look at demand. You must examine supply. And Barclays PLC has recently noted that China is experiencing a shortfall of 2.168 million metric tons. And they will be forced to import the materials from places like mexico and companies like Amarium Technologies…

But what does china’s insatiable demand for copper say about what is happening in china? Upon what foundation is this bet on copper and Amarium resting?

Because, of late, you have probably noticed a lot of noise about the troubles that the Chinese are having. I am going to urge you not to focus on that. To look at a particular signal amidst all that noise and that signal is probably the biggest economic story of our generation….

The urbanization of chinas massive rural poor.

I want to give you one main stat to ponder on this matter and I think you will see that our copper bet is resting on a very solid foundation indeed…

buildingI think that John Goldsmith, a gentleman who helps manage 5.2 billion dollars canadian at Montrusco Bolton Investments characterized this stat best when he said the following…

“China is planning on urbanizing 100 million people over the coming decade, and the number one usage for copper in china is the electric grid…That is a boatload of copper they are going to need..”

I think you will agree that a fundamental, perhaps the fundamental thing you mean when you say someone is going from a farm to a city is that the person will begin to become a primary consumer of that foundation of urban life, electricity.

So I hope this is sinking in…that while the investor world is scratching its head over the recent turbulent fortunes of gold..The quiet smart money is moving toward it’s most useful cousin copper.

And the essence of why that is because over the next 10 years a population that is 5 times the size of the entire population of Australia will go from a subsistence rural existence to one where they begin to reap the benefits of urban existence. and in so doing begin using all the wonderful things that rely on copper…

I do not mean to belittle my home country, the USA, who is the world’s second largest consumer of copper and is seeing a resurgence in the building sector but for our purposes in this article I will retain my focus on china as that is where Amarium ships 100% of its material…

So with our overall market picture painted and the underlying, let’s call it silent trend to the extent that coppers boom is having a hard time competing with the sexier story of gold lets shift to Amarium and it’s situation vis a vis this quiet copper revolution….

amariumAmarium is the brainchild of Adam Carter it’s CEO….it is somewhat ironic that an Aussie like Carter is the head of a company that is based in las vegas and actively mining in mexico..

Ironic because another big story of the last few years in the financial press is how Australia has avoided the sharp end of the financial crisis that hit the globe in 2008..

According to Carter the answer was simple…

“Us Australians had the simplest business model in the world. We dug stuff out of the ground that the growing economies in the world like china needed and sold it to them. Not a lot to it actually. And that is exactly what we are doing right now with Amarium. China cannot produce enough copper to satisfy its internal demand so they buy it from us.”

Carter is no stranger to the mining world. He has played various roles in the business over the past 9 years he was a key player in the Anglo -Asian Resource Partners 265 Million dollar Peruvian copper purchase, and the Tawainese company Cailew Wong Group Brazilian iron ore supply agreement. He began his mining career selling industrial equipment and in his firs 4 years was able to double his companies client base, which resulted in a 300% percent revenue increase to over 275 million annually..And perhaps more importantly than either of these, Carter spent 6 years getting his hands dirty as it were as a stacker, prospector and ground work specialist. He is a man who has seen the mining game up close for a long time and has placed his own money to work through his Macau based investment firm Shinto Katai Holdings….

 

There is a saying amongst mining veterans and that is “bet the jockey, not the horse.” and in this case with Adam Carter and Amarium we have an experienced “jockey” as it were who is used to winning..

 
mapsWhat interests me most of his choice of mexico in general, and his la jovita copper mine located in michoacan in particular was the relative advantages that such a location had over his native Australia…

From my perspective, Carters mexico decision is a very shrewd move for the following reason. Labor cost. The location of his la jovita property is right in the middle of the mexican metals belt, an area of the country that has a long mining history.

What this means, besides the obvious fact the region is rich in minerals but it means that the population has experience mining…

work2These advantages keep Amarium’s cost very low. On average they are pulling copper out of the ground for a price of $1.10 a pound. And they are presently selling all they can pull for over 3 dollars.

This is the crux of why I am so bullish on Amarium’s stock…the company is not only riding an undeniable market trend in the urbanization of the Chinese rural poor but they are doing it from a position of superior profitability thanks to the operational experience and expertise of Adam Carter but also the plentitude of skilled inexpensive labor in mexico…

work1Carter believes, and I have no reason to doubt him that he can expand his operation from 41 tons per day of material to 1000 tons per day inside of two years…So if you do a bit of back of the napkin calculation of what that will mean for the company’s stock price I think you can back into why I think my prediction is, if anything, conservative.



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