“South African Meteorite: Platinum for 3 Cents on the Dollar”

This is yet another junior mining company investment, and the tease comes to us from Matt Badiali at the Stansberry & Associates (S&A) Gold Report. The suggested solution came to me from a reader who wanted to remain anonymous, and it looks to me as though he was correct.

Some newsletters just do a more dramatic tease job than others — for which I’m quite grateful — and those from S&A generally lead the pack in this regard, though Taipan is not far behind. And this one is no exception:

“Two Billion Year-Old Meteorite to Launch Tiny $7 Mining Outfit to $20 by Dec. 1, 2007”

Not bad!

Though frankly, that’s only a 200% return — come on, guys, most of these newsletter teasers tell us they “wouldn’t be surprised” to see returns in the thousands of percentage points … let’s make a little stronger sell here, can we please?

OK, so the core story here is about a platinum miner/exploration company, which holds some rights to the platinum-rich area created by the impact of said meteorite a couple billion years back.

The meteorite site is in South Africa, as the newsletter goes on to elaborate (though obviously it wasn’t South Africa at the time it hit — but that’s neither here nor there). Some of the other companies who have “validated” the site by pulling out platinum or otherwise seeing their holdings rocket in value are BHP Billiton, Impala Platinum, Aquarius Platinum … the list goes on.

Badiali says this “this tiny $7 company expects two of its four key projects to produce 500,000 ounces of platinum group metals for the next 20 years.”

At well over $1,000 an ounce, that ain’t bad.

And the experts have apparently weighed in on this company, too. The newsletter includes two quotes from analysts/money managers:

“RBC Capital Markets analyst Mark Smith says this company now owns ‘some of the best quality platinum assets in the region…'”

“And Keith Liddell, the executive chairman of Mineral Securities (MineSec), calls this investment one of the two ‘sleeping giants’ in the MineSec portfolio.”

So some experts are lined up behind it … it actually has analyst coverage … it’s trading around $7 …

But apparently this company’s name is a deep dark secret, which you can find out once you subscribe to Badiali’s newsletter for a thousand bucks a year.

Or, of course, you can find out what it is by just scrolling a teensy bit further down the page, thanks to my intrepid and anonymous sleuth of a reader:

This wee platinum powerhouse is …

Platmin (PPN in Toronto, PLNLF.PK on the Pink Sheets in the US)

Thanks very much to my reader for sending this one in — here are a few confirming points:

It was right around $7 when this email started circulating — it had a very steep rise very recently to a bit over $8 in the U.S. It has recently traded between $6 and $9, so we’re close to the top but not quite there are this moment.

Ad I note that the CFO just quit at the end of last week, but I have no idea why.

The company does have four holdings in the Bushveld area of South Africa, where that meteorite hit and where 90% of the world’s platinum is born — looks like the sites are called Pilanesberg, M’Phatlele, Grootboom, and Loskop if you want to look into it some more, though there are lots of other names floating around that describe their holdings. They won’t be producing their first platinum from these sites until 2009, but they have certainly done some feasibility studies and produced charts and graphs and funny looking numbers, and all that other gobbledygook that mining companies produce to convince you they’re really going to get something good out of the ground.

Here’s a link to a story about the RBC coverage, if you’re interested. And in something I’ve not seen before, the company itself has apparently spent too much time watching David Letterman and has a “top ten reasons to invest in Platmin” list on its site. Nice! And completely objective, I’m sure.

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All I know about platinum is that it’s expensive — which is why my wedding ring is boring old white gold. If you’re a platinum expert or have some reasons why we should look at Platmin over the other competing platinum producers, please share!



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May 15, 2007 4:59 pm

I analyse any precious metal or base metal stock based on the value per ton of ore. On doing the analysis on this one the value per ton is only $180 per ton based on the data posted on their website. Using a grade of 4.3g/t that equates to .1387 ozs per ton at a value of $1296 per oz using yesterdays quotations and the distribution of PGMs in the deposit as provided on the website. Also 26% of all profits go to the BEE’s leaving only 74% for PPN and other JV’s

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One Guy
One Guy
May 15, 2007 7:26 pm

Thanks for that info — I’m glad to hear the math behind an analysis, always helpful.

And just FYI, today Johnson Mathey announced that platinum had its first surplus year in a long time, but that they think future demand is growing faster than the additional supply coming online in South Africa, thanks largely to demand for auto pollution control devices. Food for thought.

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June 8, 2008 7:17 am

Where can i sell my 32 ounces troy platinum? Call me at 081573286553

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