A speculative bet on Vermiculite

The best bet besides Apple the past decade was Potash of Saskatchewan. Both corporations made their pot of gold in items that were overlooked but essential to this generation.

One item that may be overlooked going forward is Vermiculite http://www.vermiculite.org/ It is an item that is required to enhance yields in crops and helps provide nutrients for animals.The added kicker is that it is in an area of the world that I believe will be a knockout, Uganda (did anyone really know where Saskatchewan was)

I heard of the item from IBI that owned a great deposit in Uganda, but since sold it to Rio Tinto. Recently, Rio Tinto passed the claim on to a 5 million market cap company in Australia, Gulf Resources. www.gulfresources.com.au/ Gulf appears to have gotten a claim and workable mine at a good price where they can make money and spit off cash flow that is very hard for a junior miner to find.

Rio Tinto, from what I have seen, has a knack for selling great assets at the bottom of markets. The examples I have in mind are: Westmoreland to Laramide (uranium) and Lucky Strike to Hecla Mining (silver) - this is what happens when a multi billion dollar company has lots of debt and lots of differing operations.

So a 5 million market cap company that is hard to purchase with a big deposit of an item in short supply should equal significant gains.
Here is some links on the history of this property:

http://allafrica.com/stories/200704171080.html
Kampala — Mining giant Rio Tinto is set to build a big plant to mine vermiculite in Tororo (eastern Uganda) following its takeover of the business from Canmin Resources of Canada recently.

In December last year, Canmin Resources' mother company IBI of Canada entered into a sales agreement with Rio Tinto. That agreement stipulated that Rio Tinto would take-over the business at the end of March 2007.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRatMTTk8Y4s&refer=africa
Rio Tinto acquired the rights to mine more than 6 million metric tons of vermiculite in Uganda from Canmin Resources Ltd., a unit of Canada's IBI Corp., for $5 million in December 2006. It halted operations on April 1 last year because the plant wasn't able to produce high-quality vermiculite, a mineral used in fireproofing, insulation and potting soil.
The company ``is currently in the process of identifying potential purchasers who will develop the Namekhala project,'' Kastis said. He declined to provide further details.

Rio said at the time of the acquisition of the Ugandan project that it hoped to quadruple production at the mine in eastern Uganda to 20,000 tons a year.


http://allafrica.com/stories/201004130825.html
Mining and processing vermiculite, an ingredient needed to make inorganic fertilisers, is scheduled to start this month in Manafwa district, eastern Uganda.

Experts estimate the vermiculite deposit in Namekhala area in Manafwa to be among the biggest single concentrations of the mineral in the world.

...
The pioneer company that prospected the mineral in 1998 was Canmine Resources Ltd - a subsidiary of IBI Corporation of Canada - which started the mining in 2001.

It later sold its assets in 2007 to Rio Tinto at $5 million, and the latter sold out to Gulf Resources in 2009.

Rio Tinto had drilled over 64 holes for resource definition, pit optimisation and design, and has also done some market research.

Just after the acquisition of the mine last year, Gulf Resources executive chairman Scott Reid said that the resource had one of the largest deposits of coarse grained vermiculite that was well suited to meet the requirements for both local and world markets.

Gulf Resources said that they would invest $500,000 over one year to meet the production target of 2012.

The reasons why we buy speculative stocks

We don't want to wind up in a dead end job and have no freedon. What holds back a guy from getting ahead is that he doesn't feel he deserves it. Remember you do deserve it. It's that simple.

IBI is now trading below a penny, and market cap is 1.5 million bucks

Maybe I'm hanging onto straws. Things just don't add up.

IBI is in control of many prospective gold mines in Uganda.
Has a stake in Uganda's uranium exploration and nuclear aspirations.
Won a lawsuit where they have a stake in a miner that may discover Rare Earth metals.

But the stock is priced for oblivion. Experts agree.

www.observer.ug/index.php?option=com_content&view=article&id=3127:experts-laugh-at-ugandas-nuclear-energy-ambitions&catid=38:business&Itemid=68

So if there is a billion dollars under the ground and I put $10,000 of hard earned money and the stock appreciates to a $1 billion price tag, then my selling price would appreciate 66,700%, or net me before taxes of $6,670,000.

Encouraging signs, again, in Uganda

Essar, Kenya Seek Ugandan Oil to Secure Refinery Supplies

www.bloomberg.com/news/2010-09-06/essar-kenya-seek-ugandan-oil-to-secure-refinery-supplies.html?cmpid=yhoo