It involves a distant island bounced back and forth between colonial powers… a secession movement that’s brewed for decades… rebels who live in the jungle taking every resource they need from the woodland and earth…

…and in the middle of it all an abandoned copper mine – once the lifeblood of a thriving economy…

Now its shafts bleed with rot… the beams barely held up by 20 years of neglect and miss-use. But at it’s heart one of the worlds most bountiful supplies of copper.

And one company… one tiny barely noticed company, practically unheard of here in the West, is on the verge of opening it up again.

If it succeeds like we believe it will, it has the potential to bring its daring investors a windfall of profits.

When we originally uncovered this story back in 2005 we believed it could make investors up to seven times their money.

Today, this share’s potential could leave this forecast for dust.

This story is picking up speed

The copper mine is situated on the island of Bougainville, just off the coast of Papa New Guinea. And it’s sparked the interest of a few eagled-eyed analysts on the Continent.

Germany’s leading financial magazine Wirtschaftswoche, estimates it has the fourth largest copper deposit worldwide.

Thanks to technological improvements in the sector and new underground mining techniques, the mineable deposits are very likely higher that initially thought.

The article doesn’t add anything to what Profit Hunters already know… But for most German investors, this was a revelation – their first introduction to the massive profit potential that Bougainville’s massive copper mine holds.

There’s no doubt about it. This story is beginning to appear on the radar screens of analysts everywhere…

A real chance this mine will re-open

German fund manager Martin Siegel, who specialises in gold mines, estimates the cost of re-opening the mine would come to about US$770 million over three years.

That’s significantly lower than the existing US$1bn to US$1.5bn estimates. Sydney-based commodities analyst Gavin Wendt thinks the Chinese might bid for this company to secure the resources they need to feed their industrial demand.

He mentions China Aluminium (Chalco) as a possible bidder.

But we don’t believe there’s much chance of that happening.

The major shareholders in the company that owns the Bougainville copper mine have held on to this asset for so long it would be incredible if they decided to sell out now. Especially now there is a realistic chance the mine will re-open.

Well ahead of the curve

While the mainstream media is now reporting on what Profit Hunter readers have known for a long time, we can reveal another bit of information that will keep you well ahead of the curve…

Yesterday, one of our contacts sent us a feasibility study on the development potential of this company’s license area. This in-depth report was written by Dr. S. Bornain, who works for a specialist soil analysis company in Luxembourg.

This is information you won’t anywhere else.

You see, Bournain analysed data and geological maps from the Geological Institute of Hannover, which collected data on all this company’s licence areas from 1985-1990.

According to Bornain, another area (which lies to north-west of the island) is very similar the mine’s surroundings from a geological point of view. Both mining areas have the same type of rock with identical depth of mineralization.

The upshot: they’re likely to have similar copper and gold content.

If Dr. Bornain’s estimates are correct, these combined reserves would make this remarkable company the owner of the largest copper deposit on earth.

The biggest opportunity we’ve ever seen

Should a soil test finally confirm Dr. Bornain’s theoretical analysis, we will need to raise our target price for these shares significantly.

But let me stress that these are still very preliminary estimates. So, we are going to be extremely cautious in using them.

If they are correct, though, Profit Hunter readers could be in for a pay-off bigger than anything that we imagined when we first tipped this share.

Right now the share is past my ‘buy-in’ limit. But the volatile nature of this opportunity means you may have a chance to get in at any point before the mine re-opens.

But that’s not all. You see, right now we are hard at work on our next ‘special situations’ recommendations, which could prove to be just as profitable.

We’re on track to get it to readers early next week.

It’s a tale of arms dealers, diamond smugglers, stunning women, fabulously rich mines… and Che Guevara!

All of which could add-up to one of the biggest profit opportunities we’ve ever seen.

Make sure you’re ready to receive all these details here.

Regards,

Manraaj Singh
Editor
Profit Hunter

Source: Lost Copper Mine Set to Trigger a Pay Off Bigger Than You Ever Imagined!

Chinese shares have fallen so much this year that its markets now offer bargains galore. Just about everywhere you look, some of the world’s most exciting companies are going for a song. China’s “great spring sale” has kicked off. And we’re going bargain hunting.

Take the Guangshen Railway Co., for example. It operates trains in China’s richest province, Guangdong. Analysts expect that its net earning will grow by 41 per cent over the next two years. Contrast that with America’s second biggest railway company Burlington Northern Santa Fe. Burlington is expected to grow earnings by 31 per cent over the same period.

At the end of last week, Guangshen was trading at a price-to-earnings ratio of 17.3. Burlington was trading at a P/E of 20.8. So, right now you can pick-up the faster growing Chinese company at a 17 per cent discount to Burlington.

Why am I focusing on Burlington? Because investment legend Warren Buffet sees it as one of the best investments available in the U.S. He has bought about 20 per cent of the company already and is keen on adding to his holding.

Guangshen isn’t a one-off case either. Look at Aluminium Corp. of China Ltd. (Chalco). It is offering investors twice the profit growth of America’s Alcoa Inc – the world’s biggest aluminium company. Chalco’s Hong Kong listed shares now trade at a P/E of 14.5. That puts them at an 11 per cent discount to Alcoa.

So many bargains… so little time…

China’s CSI 300 Index, which tracks the leading companies on both of China’s stock markets, has fallen by 32 per from its October peak. That’s the biggest decline among the world’s 20 biggest equity markets. Hard luck if you were already invested in it, but excellent news if you’re looking to get in.

The slump has narrowed the CSI 200’s price-earnings gap with the Standard & Poor’s 500 Index to just 13 per cent at the end of last week. It was 139 per cent at its October peak. Companies in the CSI 300 now trade at an average price-earnings ratio of 26.4, down from a record of 52.8 in October. So, right now, they’re just slightly above the 23.4 ratio for the S&P 500. And China’s higher growth rates justify that.

But take a look at the Hang Seng China Enterprises Index. It measures the performance of 42 major Chinese companies that trade in Hong Kong. It has been cheaper than the S&P 500 since March and is now valued at 18.1 times profit. That puts it on a 12 per cent discount to the U.S. markets.

China is over-sold

That brings me back to a point that I have been making here in this newsletter – The Asian markets have been massively oversold. A correction was in order, but the current sell-off has gone beyond what can be justified by the fundamentals.

The CSI 300 surged by 478 per cent over the last two years as China’s economy continued to race ahead and the government increased the supply of state-owned shares. But valuations clearly got well ahead of themselves. The rally fizzled this year on fears that prices had outstripped earnings prospects, that new share sales would overwhelm demand and that the highest interest rates in nine years will slow profit growth.

But those fears have been overblown. Chinese companies’ earnings actually grew by 5.5 per cent in the first three months of this year. Things haven’t gone so well in America. U.S. companies profits have dropped by 16 percent in the first quarter. China is clearly the better bet right now. Even after this years’ declines, the CSI 300 is still 322% higher than it was three years ago.

A good time to buy in.

So, the correction in China provides a good opportunity to get in. A lot of the best companies are now trading on very attractive valuations. Even if we make allowance for overly optimistic growth forecasts for some of them, they still offer much better value than you are getting in the West right now.

How do we best play this? I like the country’s transport sector. The Chinese economy is still booming; and so is most of Asia…

I am tremendously bullish on Asian shipping companies at the moment. Right now, I see fantastic value in this sector, and nowhere better than in China.

Regular Profit Hunter readers will be receiving my brand new Chinese shipping recommendation very shortly. Get in on this service now so as not to miss out on our latest tips, reports and much, much more…

Regards

Manraaj Singh

Profit Hunter
Editor

Source: Chinese Share Panic Gives Us Once in a Lifetime Opportunity

In fact, rumors that BHP may increase its bid have brought about even more speculation that China’s largest steelmakers will further enter the fray.

Rio Tinto Group, the world’s third-largest mining company, rose in London trading yesterday (Tuesday) on speculation BHP Billiton Ltd. will increase its $179 billion hostile bid for the company.

“The rumor doing the rounds is that BHP will increase its bid to 3.8 shares for each Rio share,” Manoj Ladwa, a derivatives broker at TradIndex in London, told Bloomberg News.

Rio Chief Executive Officer Tom Albanese rejected BHP’s initial $127 billion offer saying it “significantly undervalued Rio Tinto and its prospects.” Albanese also said the bid, which offered three shares of BHP for every one share of Rio, was not just out of the ballpark, but “several ballparks away” from being an accurate appraisal. A second offer of 3.4 BHP shares per share of Rio Tinto was also rejected.

BHP has refused to comment on the rumors, but it’s not too great a stretch to imagine another bid might be on its way. That’s because the one thing the world’s second and third largest mining companies can agree on is that Asian markets should be paying more for their iron ore.

Both Rio and rival BHP Billiton are believed to be pushing for an 85% increase in 2008-2009 benchmark iron ore prices, despite the 65% to 71% rise agreed to by Brazilian mining rival Vale (RIO).

The two Aussie juggernauts believe their proximity to Asian markets gives them greater leverage to charge higher prices.

“Rio Tinto will continue to negotiate to obtain a freight premium, to reflect its proximity to Asia and its major customers,” Sam Walsh, Rio’s chief executive of iron ore projects said in February.

Freight accounts for 30% of the landed cost of Australian iron ore in China, but close to 50% of Brazilin iron ore. China, the world’s largest steel producer and consumer, imported 383 million metric tons of iron ore in 2007, up 56.8 million tons, or 17.4%, from the previous year, the China Iron and Steel Association reported.

China’s Chess Game

China is perhaps most affected by the increase in iron ore prices. The country produces about a third of the world’s steel and the vast majority of that output is being used to build the foundation of what will one day become the world’s premier economic power. A boom in commodities prices that has caused the spot price of iron ore to triple in the past five years threatens to derail the country’s fast track development.

However, the only thing that scares Beijing more than soaring ore prices is the prospect that BHP and Rio will team up to ensure that high metal prices are supported well into the future, and perhaps through the duration of China’s economic and industrial expansion.

So far, Xiao Yaqing, chief executive of Aluminum Corp. of China (ACH), otherwise known as Chalco, has given the strongest indication that the state-backed Chinese company is uneasy about the prospect of BHP and Rio forming an ironclad alliance.

“A firm that owns too many resources is not good for the world,” he said in an interview with Hong Kong’s South China Morning Post. “People do not want to see a company dominate the market in any industry.”

Earlier this year, Chalco and Alcoa Inc. (AA), the U.S. aluminum company, bought a 9% stake in Rio Tinto Group for $14 billion. The move turned the duo into Rio’s single largest shareholder, ensuring BHP would have to obtain a 50.1% stake in the company to complete its takeover.

Last month, Sinosteel Corp., China’s second-largest iron ore trader, won over Midwest Corp. by raising its takeover bid to $1.3 billion. Sinosteel has also acquired a 2.4% stake in Murchison Metals Ltd., a rival iron ore producer to Midwest.

Few believe that Chinese companies will stop there, however. The Australian newspaper reported Monday that China’s three largest steel firms – Sinosteel, Chinalco and Baosteel Group Corp.- were looking at a 16% stake in Fortescue Metals Group Ltd., that Harbinger Capital Partners is considering selling. Fortescue is Australia’s third largest iron ore producer behind BHP and Rio Tinto.

“Harbinger chief executive Philip Falcone has been regularly contacted by many Chinese and European companies, particularly in recent weeks,” the paper said. “But because of federal Government concerns about the level of foreign investment, any sale to the Chinese will probably be for only about half of the Harbinger stake.”

Even Marius Kloppers, chief executive of embattled BHP Billiton, thinks a stake in his company will soon fall into Chinese hands.

“Various parts of China that have got surplus funds, capital to deploy, are deploying that across a wide range of things in the world,” he said at an investor briefing. “I have no doubt that one day we will see them show up on our register.”

Source: Iron Ore Proves to be the Most Coveted Commodity in the Pacific