Friday, June 19, 2009
A Great Week for Eureka and General Moly
It is 6:00 AM sharp, grab a cup and let's have a Friday wrap. The theme for this week was to identify positive signposts for the economic future of Eureka County. The Report looked at commodity reflation, stabilizing credit and equity markets, an outlook for inflation and the increasing importance of the BRIC countries for commodity-sensitive economies. That's a lot of territory pardner and we're not done.
General Moly held their annual meeting in Lakewood, Colorado, yesterday and presented a top notch overview of where they've been and where they're going. Here's the link, a must read for anyone living in our area:
Building Foundations - Positioned to be Become the World's Largest Primary Molybdenem Producer
If you like to dig into the numbers, you might also want to checkout their Annual Report.
General Moly Annual Report - Form 10-K
Their annual meeting was quickly rewarded by a target price increase to $3.40 by National Bank this morning and a "Buy" recommendation from Blackmont Capital earlier this week. Folks, in the dreary days of March, General Moly had a low intraday price of 64 cents; yesterday, they closed at $2.44 and briefly touched $3.15 this month.
What's going on? In their overview, there is an excellent discussion for why the molybdenum market is poised for a rebound citing lower global inventory levels, market discipline from existing producers and China beginning to buy molybdenum from western producers (China has been historically a self-sufficient moly producer). Interestingly, they also see less and less by-product production coming to market as copper production shifts from the Americas (where moly exists as a by-product metal) and toward Africa and Asia (where cobalt and gold exist as by-product metals rather than moly).
On a daily basis, the Report has tracked the price of molybdenum as well as the stock price of key domestic and global steel producers. Moly has surged from sub-$8 April lows to the latest price of $10.58. Although we're far from the 2008 $30-plus highs, molybdenum is back on the march to higher prices. In addition, global steel producers such as ArcelorMittal(MT) have doubled their stock price since their March lows. As another good sign for GMO, Deutsche Bank raised MT to a "Buy" recommendation this week.
The General Moly report also reaffirms its commitment to Eureka County in terms of community involvement, the educational foundation to benefit our high school students and the site preparation for housing future employees and family. The Colonel gives the Eureka Moly folks a hearty Cheers!
Enough talk, let's walk the walk:
Oil is up $0.30 to $72.21 in early trading (August contract); Gold is up $0.4 to $935.0 (August contract); Silver is up $0.025 to $14.265 (July contract); Copper is up 0.30 to $2.2750(July contract); Molybdenum holds steady at $10.58.
The DOW is up 56.23 points to 8611.83; the S&P 500, up 8.40 points to 926.77. The miners are kicking butt:
Barrick (ABX) $33.68 up 1.75%
Newmont (NEM) $41.83 up 1.01%
General Moly (Eureka Moly, LLC) (GMO) $2.48 up 1.64%
Freeport McMoran (FCX) $51.92 up 2.81% (a bellwether mining stock spanning gold, copper & molybdenum)
Steel stocks are rocking (a "tell" for General Moly):
Nucor (NUE) $47.40 up 1.96% - domestic steel manufacturing
ArcelorMittal (MT) $33.10 up 2.32% - global steel producer
POSCO (PKX) $83.76 up 1.47%- South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is a happy camper, up 1.16% to $1,020,041.33.