frizzers

Latest newsletter:

Dear Friend of Kisses On A Postcard,

Firstly, many thanks to those who came to our Presentation last year at BAFTA and to those who pledged to invest.

This letter is to keep you up-to-date with what has been happening with the project. Despite there being no word from us, things have been progressing quietly and well.

On the business front, Peter Wilkins has joined us as our Executive Producer and General Manager. This is a major coup for us. Like all of us, Peter has fallen for the show and wants to be involved in putting it on.

Peter has vast experience world-wide in producing plays and musicals, principally in London, but also in The U.S., South Africa and Canada. He was, for many years, Duncan Weldon's partner, before Duncan retired. You can look up Peter's full CV on our website at http://www.kissesonapostcard.com/peterwilkins.html .

Peter has been working on a full, detailed budget of the show, which we will soon be making available for potential investors to see. He has arrived at an overall figure of £2,500,000, which includes a very generous contingency fund. He has also devised some excellent, clear and concise investors' contracts and taken care of other business aspects of our production. With him we will be approaching a potential director.

On the artistic side, John Altman has produced a smashing number for the Black GIs in Act II. John, if I may remind you, has won every award going for music. His (phenomenal) CV and some of his music is also on the website.

As we told you at the Presentation, Gordon Clyde, who has composed most of the music for the show, is no longer well enough to work and it is John – and possibly one other – who has taken on the role of composing the remaining music.

We have been into the studio to record some of Gordon's music. Though they are unorchestrated, demo versions – just voice and piano – they are sounding great. The final edits and mixes are just being done and they will soon be posted on the website.

Also on the artistic side, Joe Harmston's workload in the UK, and to a larger extent in the US, has meant that he has had to leave us and we wish him well.

Regarding the financing, as we mentioned at the presentation, we have been given some seed capital by various City sources, which is covering our development costs at this stage. We haven't made any call on those of you who pledged investments because we weren't ready to move forward and we didn’t feel it was right to leave your money lying in our bank account not doing anything. This is a project that, if it's going to be done properly, is going to take some time and patience.

However, the date when we start raising money in earnest is getting closer – possibly as soon as the summer. We'll keep you updated on events as they happen

In the meantime, we wish you all the best and again our thanks for your interest and support,

Yours,

Terry, Dominic, Jeremy and Peter

FCC, Cobalt & Mystery metals set to shine ever brighter

(reviving old Frizzers thread)

Commodities face rising demand and tightening supply – and that’s not about to change soon. Tim Bennett and Eoin Gleeson look at ten minor metals that could give you anything but minor returns

Regular MoneyWeek readers will know that we are big fans of commodities in general and precious metals in particular. But while investor interest in gold, silver and even platinum is growing steadily – witness the launch of a batch of preciousmetal-tracking exchange-traded funds last week – some of the biggest profits of the next few years could be made in metals you’ve probably never even heard of. The so-called minor metals do not enjoy the same profile as their more glamorous cousins, but they have been huge beneficiaries of the commodities supercycle – some have seen their prices jump more than tenfold in recent years. Most have a variety of uses, but the drivers are rising demand for electronic goods from Asia’s emerging middle class; the upsurge in ‘green’ technologies; China’s insatiable demand for steel; and the need for industrial users to find substitutes as more commonly used metals such as nickel also soar in price. With growth in Asia, and China in particular, showing no signs of slowing, these forces seem unlikely to diminish in the near future. Here are ten minor metals we think you should know more about, with tips on how you can profit from them.

Cobalt (Co) Atomic number 27 One beneficiary of the drive to go green is this silvery metal. In the past three years, cobalt use in rechargeable batteries has risen by 284%, the fastest-growing segment of which is hybrid electric vehicles (like Toyota’s Prius), which cut air pollution and fuel consumption by at least 50% compared with an ordinary car. Most such vehicles now use nickelhydride batteries, which contain about three to five pounds of cobalt, but use of more sophisticated lithium-ion batteries is set to rise – and the good news for cobalt producers is that these contain five to seven pounds of the metal. Another big use is in mobile phones and jet engines, where despite rising prices, engine makers have difficulty in finding substitute metals once a product has been designed and tested. In the past decade, consumption of the metal has grown at an average annual rate of 12.9%. Credit Suisse reckons the price could spike from the current $30 a pound to $40 by the end of the year, driven by “new demand from emerging markets such as China and India, where the launch of low-cost airlines in air travel and mobile phone usage are set to multiply among an expanding middle class”. US government stockpiles of the metal and lower-grade material from the former Soviet Union are now largely depleted, leaving little inventory to draw on. “Once the market becomes more educated about cobalt, watch a flood of capital flow towards the very few publicly traded primary cobalt companies available to investors,” says Richard Reinhard for Growth Stocks Weekly. He likes Formation Capital Corporation (TSX:FCO), which after 10 years of exploration and development is about to see its cobalt project in Idaho come on line; and Geovic Mining (TSX: GMC) another cobalt-focused miner, which is still developing its open pit cobalt-nickel deposits in Cameroon.

Rhodium (Rh) Atomic number 45 Another metal benefiting from green concerns is rhodium, a silvery-white byproduct of platinum production. Its key use – accounting for more than 80% of demand – is in diesel catalytic converters, which cut exhaust emissions. Global demand is soaring as governments tighten laws on vehicle emissions, particularly in Europe – and even though you don’t need much, John Lewins of Platinum Australia says: “There isn’t a substitute. You have to put rhodium into those catalytic converters.” Standard Chartered’s metal analyst Tariq Salaria says: “In recent years, supply has not been capable of matching the increase in demand,” which has seen rhodium rise 14-fold in the past four years to $5,700 an ounce. Merrill Lynch and JP Morgan Chase expect it to rise another 25% this year. Merrill likes Anglo Platinum (JSE:AMSJ), the main producer. You might also look at Norilsk Nickel (OTC:NILSY), which has just received a new licence from the Russian government to ship rhodium and other platinum group metals.

Ruthenium (Ru) Atomic number 44 Ruthenium, a fellow platinum group metal, has seen its price soar from $35 per ounce four years ago to more than $600 – and 350% of that gain has occurred since September 2006. Analysts attribute the recent price surge to the metal’s new role in increasing hard disk capacity – a tiny layer of the metal (what IBM scientists call “pixie dust”) allows a computer memory to hold at least four times the amount of information. But ruthenium is a versatile metal – it’s also crucial to higher-capacity mobile phones, while titanium (see below) becomes 100 times more corrosion resistant with the addition of just 0.1% ruthenium. Produced primarily in South Africa, its market is illiquid and prices volatile. But new applications are being discovered all the time – biotech group Medical Marketing International (LSE:MMG) is using it to develop lung, colon and ovarian cancer treatments. Investment bank UBS says: “Although supply will increase in the next few years as South African platinum group mines increase output and recoveries of ruthenium, the market looks set to remain tight.” Business Day tips Anglo Platinum and Implats (JSE: IMP), another South African platinum miner.

Indium (In) Atomic number 49 This soft silvery white element, with the unnerving characteristic of producing a sound like a scream when bent, is built into “a billion consumer devices a year”, says New Scientist. The metal is used to create thin-film coatings for the LCD screens used in flat-screen monitors and televisions. These are all seeing strong sales growth as Asia’s developing middle class buys more consumer goods – according to market research firm iSuppli the global electronics manufacturing industry is set to grow in value from $147bn last year to $183bn by 2009. Supply is tight – mine reserves are limited to a few plants in Belgium, Japan and the US, and some estimates suggest these could run out within five years. Demand outstrips mine production and capacity, says Luke Burgess of Goldworld.com, which explains why in the past five years indium’s price has jumped ninefold. He suggests taking a look at small-cap indium explorers Avalon Ventures (TSX: AVL) and Niblack Mining (TSX: NIB).

Tantalum (Ta) Atomic number 73 What do capacitors for mobile phones, laptops and playstations, pacemakers, hearing aids and bone replacements all have in common? The answer is tantalum. While young consumers snap up electronic goods, their elderly peers need more and more medical devices, which means demand, expected to grow by about 7% a year, according to the US Geological Survey, is solidly underpinned. Meanwhile, the US Defence and Logistics Agency, which was selling about 500,000lbs of tantalum a year from Cold War stockpiles, sold the last of its reserves in December. Global supply is now dominated by three countries: Australia (62%), Mozambique (14%) and Brazil (11%) and hampered by cutbacks at the biggest producer, Sons of Gwalia (ASX:AGW), which accounts for more than half of global production. Investors keen to get exposure to the metal could look at Aim-listed Gippsland (LSE:GIP). Resource Investor reckons that the potential from its stake in the Egyptian Abu Dabbab mine has been significantly underestimated and that the stock could double in price. Another Aim firm, Noventa (LSE:NVTA), has seen its share price rise by around 25% since listing earlier this year. It has promising opportunities in Mozambique and is headed by ex-Bateman Holdings chief executive John Herselman.

Chromium (Cr) Atomic number 24 Nickel is a key ingredient of stainless steel – but finding a substitute has become a concern for steelmakers. The price of the metal has hit record highs, trading at around$47,000 per metric tonne, amid soaring demand for steel to fuel China’s building boom. With recent estimates from metals research group Roskill suggesting that global steel output will rise by 25%by 2010, there’s little sign of relief in sight. Posco, the world’s fourth-largest steelmaker, aims to boost output of nickelfree steel fivefold next year, using chromium, which trades at $7,650 per metric tonne. David Fuller of Fullermoney says: “If chromium is a realistic substitute, the strength of nickel could help to push it to higher levels.” However, there are few pure plays on the metal – Brazil’s FrebasaFerro Ligas Bahia looks the best, but is not easily available to UK investors. However, Xstrata is a big producer of the metal (for more, see box overleaf).

Bismuth (Bi) Atomic number 83 Another metal that has left producers struggling with rising costs is zinc, which has hit $1.69 a pound in recent months – good news for bismuth producers. Using a tiny amount of the metal in galvanising can reduce the amount of zinc needed for the process by 30%-50%. Another factor driving the price higher is its use in leadfree solder, which is gaining ground as European regulations eliminate lead from electronics solders. Supply has also been squeezed, after China imposed export tariffs due to its own rising need for the metal. That has pushed the price to $10.85 a pound, twice the level of six months ago – but if zinc remains at current levels, the price of bismuth could go much further. Canada’s Fortune Miners (TSX:FT)has discovered sizeable reserves of bismuth at its NICO project in the Northwest Territories.

Molybdenum (Mo) Atomic number 42 “Moly” as miners call it, is the “wonder metal of the oil, gas, nuclear, coal and desalination industries”, says The Daily Telegraph. Prices have jumped tenfold in just a few years, but could have much further to go. That’s because moly is an important ingredient of high-strength, erosion-resistant steel used for missiles, aircraft parts, and – in particular – pipelines. Projects that look set to keep demand rising at a projected 6% a year include 100,000km of oil and gas pipelines waiting to be be built across the Baltics, Russia, China and Canada, plus huge pipeline replacement programs, like BP’s in Alaska. On top of this, nuclear reactors need 7% moly in the core, while corrosion-resistant pipes for desalination plants need 6%. There is plenty of moly ore around but Resource Investor estimates that global smelting and refining capacity is almost fully utilised. In the US, production has been hit by the environmental lobby, while China’s share of global moly output has fallen from 29% to 17% after a crackdown on pollution. Small wonder Ambrose Evans-Pritchard in The Telegraph reckons you should “pack a little moly into your pension fund”. Moly miners don’t come bigger than Blue Pearl Mining (TSE: BLE). With 5% of global output it is the “world’s largest publicly traded moly pure play” and looks reasonably priced on a p/e of 10. Canada’s Sprott Asset Management has launched a moly ETF, Sprott Molybdenum Participation (TSX: MLY), invested 75% in moly shares and 25% in the metal itself.

Titanium (Ti) Atomic number 22 Light, strong and corrosion resistant, titanium is a darling of the aerospace industry as airlines seek to cut fuel consumption. Demand from these users coupled with capacity constraints at the crucial melting stage of production have seen prices near-double in the past two years, while recent estimates from Macquarie Bank suggest titanium alloy consumption will double in the next 10 years. As a result, Bank of America sees the earning power of suppliers being boosted for another three years with “little investment into increasing supply”. Chris Olin at Longbow Securities believes the price will also be supported by “huge penetration into the oil and natural gas market”. Deep water platforms require a metal that is weather resistant and durable, making titanium an increasingly attractive alternative to steel. Mirabaud Securities tips Kenmare Resources (LSE: KMR), which accounts for 6% of titanium dioxide output (one source of titanium) from its Moma mine in Mozambique. Analyst Kuni Chen favours Titanium Metals (NYSE: TM)– less than half of forward sales are tied to fixed-price contracts, giving it more scope to profit from rising prices. Olin likes RTI Metals (NYSE:RTI), a titanium producer and component maker.

Vanadium (V) Atomic number 23 “Every human on the planet uses vanadium in their everyday life but few investors are familiar with it,” says Resource Investor. The metal is used to strengthen steel, create the best titanium alloys and to develop plastics, glass and dyes. Demand has risen by around 6% a year over the past three years. Crucially, the Chinese only use the metal at 50% of the intensity of western producers, which should help drive growth. Combine that with the fact that primary production in South Africa is close to capacity and the outlook for prices is good. Broker Patersons likes Precious Metals Australia (ASX:PMA), which controls the 5,000tonne capacity Windimurra mine. Its estimated long-run production cost of about $8.60 per kg leaves plenty of profit potential at current prices, which are expected to stabilise above $20. Casey Research prefers the combined vanadium and uranium producers such as Uranium Power Corporation (TSX:UPC) or Energy Metals Corporation (TSX: EMC). China’s construction boom will be good for metals “Pack a little moly into your pension fund” ©BLOOMBERG

The most sensible way to invest in a volatile sector

With the exception of molybdenum, for which an ETF is available (see overleaf), minor metals are not easy to invest in directly. Markets are often small and illiquid, with deals done directly between miners and users, which means prices are volatile and not always straightforward to monitor. It’s also important to remember that unlike precious metals, such as gold and silver, the prices for the likes of cobalt and bismuth are dictated mainly by industrial rather than investment demand, which means they are also more vulnerable to a downturn in the global economy. This risk can be offset to a certain extent by looking at the range of applications for a metal. For example, many of the metals listed here, including chromium and molybdenum, depend greatly on a healthy steel industry – so problems in that notoriously cyclical industry are likely to hammer prices. On the other hand, metals with a wider range of applications, such as tantalum, should be better placed to weather changes in the economic environment, even if one sector runs into problems. Substitution is another factor to be aware of – if nickel or zinc prices fall, then chromium and bismuth may not look as attractive to users. Metals which cannot be easily substituted, such as cobalt and ruthenium, are less likely to find themselves obsolete or overpriced. Perhaps the most sensible thing for investors to do is to diversify their exposure to minor metals. David Fuller of Fullermoney, for example, prefers the less-direct exposure offered by the likes of AAnnttooffaaggaassttaa ((LLSSEE:: AANNTTOO)), AAnngglloo--AAmmeerriiccaann ((LLSSEE:: AAAALL)) and XXssttrraattaa ((LLSSEE:: XXTTAA)). Xstrata in particular gives solid exposure to a number of the metals in this feature – it accounts for a third of global vanadium production; chromium is its fifthlargest metal by production; and it also has some exposure to molybdenum. Trading on a forward p/e of 8.7, it looks good value to us. Fuller also tips the MMeerrrriillll LLyynncchh WWoorrlldd MMiinniinngg TTrruusstt ((MMLLWW))as a solid diversified bet. It offers some molybdenum exposure, but without the volatility. The trust currently trades at a 9% discount.

We've heard it all before, but ... from this week's Moneyweek:

Silver: “the single best asset you can own”

Since MoneyWeek grew keen on it in 2004, silver – both an industrial and a precious metal – has risen from under $8 to almost $14 an ounce. And the longterm outlook remains compelling. The market is extremely tight. Sixty-five years of consumption exceeding production has “decimated world silver inventories”, says Ted Butler in Investment Rarities. With mined silver undershooting demand for the past 15 years, government stockpiles have fallen from 2.2 billion ounces in 1990 to around 300 million. Experts reckon that, by 2010, inventories will be “critically low”, says Kevin Kerr on Marketwatch.com. Moreover, it’s hard to boost production rapidly as silver is largely a by-product in other metal mines. Industrial applications for silver are on the rise, according to metals researcher GFMS. Silver is used in film processing, medical products (it kills germs without harming the body), electrical appliances and a series of high-tech devices. Batteries, superconductors and microcircuits are areas in which new uses for silver are being explored and where new demand should increase exponentially, says James DiGeorgia of Gold & Energy Advisor. Industrial demand should keep rising long term as expanding middle classes in emerging economies aspire to Western lifestyles. But industrial demand is only part of the story. Few realise that above-ground silver is actually rarer than gold, making it a better hedge against inflation and economic turmoil, says Butler. Investment demand is also taking off as investors seek a hedge against depreciating currencies and inflation. Last year saw the launch of a US silver exchange-traded fund, which has hoovered up a third of the silver available in the market – a reminder that with a total of 300 million ounces worth $4.2bn, the market is tiny. If even a small amount of money flows into the silver market from retail investors, hedge funds and pension funds, silver “will almost certainly reach” its 1980 peak of $49 an ounce, says Mark O’Byrne of Gold & Silver Investments. And plenty of gold investors are likely to “jump on silver” too once the rising price highlights its rarity, says Butler. Silver is the “single best asset you can own today”. Investors can now buy in through a London-listed ETF (SLVR).

Silver: “the single best asset you can own” ©BLOOMBERG Rarer than gold

Think I may have found a beauty:

Precision Drilling - an income trust in the oilfield services sector.

PE Ratio 5.73 ; Divident yield of 13.77%

http://www.precisiondrilling.com/

Chart looks to have found a bottom after a Bubb ABC correction and is now sitting on topo of 21 and 55 dmas at a potential inflection point.

CHART

Anyone know it?

No me too. But not tha t many!

Just in case you were losing your doubts about the potential of silver, here is why we are seeing all that resistance at $14-15. When it breaks through, heaven knows where it's going to go.

And it will break through, at the moment it is, as they say, building cause. Meanwhile look at the support it has at around $11:

Puplava's bullish on silver. But Bob Howe, who is a great student of the PM market, is not:

http://www.howestreet.com/goldradio/index....er?audio_id=546

if we're headed into recession, silver may not be the best thing to hold. Do you have a view, Dr B?

SIA chart looks bullish

Yes,

I'll do a post shortly.

What I note aqbout that is that they've made no attempt to disguise the poor news, not even to dress it up in lighter language. They then put that para right at the front of the monthly news letter so it has full impact. Do they want the share price to go down?

Or maybe the actual news is even worse.

No they had some poor drill results - http://www.kimberresources.com/newsletter.html?id=185

Try http://www.goldmoney.com/ . Best way to own physical IMO. Only pay VAT if you take delivery. So don't.

She doesn't get it.

http://www.youtube.com/watch?v=j1PfE9K8j0g

Uranium stocks takin a big hit this last few days

Try here-

Yes, we will use YouTube to promote the musical. That's a good idea.

I'm not sure that a DVD of the film of Soup was ever made. I have it on VHS ad I'll gladly lend you that.

The play is much better than the film though. You're better off reading the script of that!

Thanks for this folks.

Until reading the above I was of the mind that Uranium was an almost no-risk, inevitably-going-up sector.

I have a number of plays which are going well at the moment. Some have doubled and others are close to doing. I guess the sensible option is to take half off the table, ie your original investment, when it doubles. Thus leaving yourself bullett proof on the downside and exposed to any upside, bubble or genuine.

LIMEY CORNER - David Morgan's insider in the UK

Having enjoyed the first-ever London Silver Summit, I offer a British perspective on the silver market and a feel for the profile of silver investing in the UK. The land of CCTV cameras and deference to Brussels remains firmly obsessed with housing and “financial services”—hard assets are still very much considered to be “fringe” investments.

While there is marginally more interest than a year ago, sentiment remains weak—gold is still a shunned asset class, which means that silver too remains exiled to the boondocks. UK investors tend to look at gold and silver as one and the same—outdated “flight to safety” investments. Promoting silver as an industrial metal still engenders a degree of surprise among my fellow investment managers. I fear that so long as paper currencies sustain their fiat confidence trick, UK fund managers and investors alike will continue to consider silver a quaint investment at best—and at worst, the realm of Conspiracy Theorists and Cassandra’s alone.

I have had little success in tempting UK investors into the physical metal (something that I consider to be of utmost importance to both them and the marketplace). This may have something to do with the fact that the UK government charges VAT at 17.5% on physical silver while gold is VAT-free. This bizarre disconnect only further serves the purposes of the SUA by putting investors off from buying “the real thing.” Even the dealer I bought kilo bars from in 2001 pleaded with me not to be so silly as to “throw away” 17.5%; rather, he advised me to buy unallocated certificates! Such is the overwhelming assumption here that nothing has changed in the physical market, that most fund managers in London still refuse to believe that any investment could really be portfolio insurance AND have utterly compelling fundamentals—the ultimate straddle.

As such, I must say that the general understanding of “real money” and “fiat currencies” over here is pretty much non-existent. This is a surprise to me, as Englishmen pride themselves on their knowledge of history. This is perhaps the biggest difference between the U.S. and UK silver markets (perhaps because we don’t have a constitution that expressly forbids fiat currencies!). The idea of returning to a fixed metallic standard is an anathema to the UK investor.

When I was at the Silver Summit in Idaho in September, physical silver disappeared from the stall of the Northwest Mint at a remarkable speed. I consider this to be the important change we are seeing globally (if not the UK!) in silver. Those in the know are reaching for the shiny stuff while the cautious stand back and wait for price action to lead them back into the market. I do hope that us Brits “get” the silver story soon but am not holding my breath; the UK is the most mediated country in the world (in terms of watching television and reading national newspapers), and investors and voters alike are used to being told what to do and where to put their money...hence the current fascination with cheap credit and the bubbling housing market. ~ Ned

Editor Comment: I asked Ned to give us a picture of how precious metals investing is perceived in Great Britain. It is my considered view that the UK and most of Europe (Germany may be the exception) are at least two years behind Canada and the U.S. for any momentum in the natural resource sector. What this tells us is that this bull market is far from over, and as investors around the globe wake up to the fact that the precious metals are increasing in value against all currencies, we should witness more and more money moving into this sector. We have asked Ned to stay in touch with us and contribute periodically, as the increased market awareness is only a matter of time.

Nice post.

This, on the other hand, looks like it's broken essential support and might have a way down to go. Or am I wrong?

NO, NO!

Tumi have $4 million in the bank, 25 million outstanding shares and a market cap of C$12 million.

I was just putting forwad the EPM chart as another suggestion.

Meanwhile, here's another chart which, if I understand you correctly, amptly demonstrates what you look for:

$4 million in the bank I gather.

25M shares outstanding, market cap = C$12 million.

Another one?

'But I will rarely invest unless I like a company's chart - and a A-B-C correction, where the volume is drying up on the C-leg is may preferred chart pattern'

Like this?