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!

For the tale of the tape, the TSX Exchange lost 0.26%, while the TSX Gold Index gave back 0.7% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, added 0.09% with the declining issuers beating the advancers by a 550 to 490 margin on robust volume of nearly 255 million shares traded.

Arctic Star Diamond Corp., WSR Gold Inc. and Metalex Ventures tabled visual estimates for their joint venture project some 45 kilometres north of Noront resource’s Eagle One discovery in Ontario’s James Bay lowlands. Of particular interest is hole 5.01-06 that cut 95 metres of near massive sulphide. Results are still pending. Arctic Star ended the day down C$0.01 at C$0.135, Metalex closed up C$0.02 at C$0.385 and WSR added C$0.13 to close at C$0.79. It is worth noting that WSR can earn 50% of the property by spending C$20 million over 4 years and currently Metalex, which is run by legendary Canadian diamond finder Charles Fipke, owns 91.5% and Arctic 8.5%.

Word that the Saskatchewan Mines Branch has issued a potash permit covering 91,000 acres to Potash North Resource drove the junior’s share price C$1.34 higher to C$1.54.

Despite the healthy volume, it was another generally quiet trading day. We will see what Thursday trading has in store.

Source: Resource Stock Roundup: Thursday, June 5th, 2008

For some reason, Gambia’s president, Dr Yahya AJJ Jammeh, has it in his mind that Carnegie Minerals is stealing his precious metals. So he threw one of Carnegie’s mining engineers in jail.

All of this is a lesson in risk. Carnegie’s share price graph now looks like someone’s been jamming on the brakes to stop within ten yards. The shares are bouncing sharply around 3p having crashed from 8.25p. This is a bit sad as it raised money from investors in February at 4p.

Britain’s Foreign Office (FO) website for Gambia gave no warning that this sort of thing could happen. Perhaps this is because the drama has been going on since February. The site was last updated on January 2. Not a lot of help for UK investors!

So the FO has Gambia down as a republic under multi-party democratic rule. The ruling party currently holds a huge majority (45 of the 48 elected seats). The president came to power in a bloodless military coup which toppled the elected government in 1994. Only 1.7m people live there. The economy is all about tourism and peanuts. Foreign aid fills the gaps.

The site does state that trade with the UK is strong. The UK is consistently among Gambia’s top two or three trading partners — not that this means a lot!

UK exports to Gambia to 2006 amounted to £14.0m, down from £16.47m the previous year. Trade in the opposite direction was valued at £3.5m, up from £3.3m the previous year.

Jammeh obviously has ambitions to boost Gambia’s status. He wants the country to become an oil state. He’s been quoted by the BBC as saying that this could usher in a “new future”.

Trouble is, no one has yet found any oil!

He also made a claim to be able to cure AIDS in three days. Last year he said he was treating ten patients with secret herbal-based medicines.

The “economic crime” of finding uranium

So, warnings of more than one kind are in order here, even if they’re not spelt out on the FO site! The best to be said of Gambia is that it seems a mite bizarre. So what were Carnegie and its investors doing there?!

Carnegie was floated on AIM to tackle the Astronhe SeneGambia Mineral Sands project. This is a cross border project extending along the coastlines of Gambia and southern Senegal. Its aim was to produce zircon/rutile concentrate for sale at the mine gate.

This project was a 50-50 joint venture with off-take partner Astron, which has ties to China. Any concentrates were to be shipped bulk in containers to China for final processing. Washed sand was to be sold to the local construction industry.

Carnegie also has exploration projects in Australia and the US. Until January 16 it was getting on with its business of keeping all this work ticking over. Then, the bomb shell hit.

A presidential dictat ordered Carnegie to stop working in Gambia. As alleged by the president, Carnegie was commercially mining titanium and uranium. This was an economic crime. It had a licence only for mineral sands.

Mineral sands are an important source of zirconium, titanium, thorium, tungsten, rare earth elements, as well as the industrial minerals diamond, sapphire, garnet, and occasionally precious metals or gemstones. So if it was processing uranium this was out of order.

Presidential claims of super-power status to come

Two days later the president announced the good news to the Gambian people, amidst the celebrations of Islamic New Year. Gambia was now a source of strategic mineral resources! Hurrah for all of us!

And he reminded them that a few years before he had announced the country also had oil.

Now the biggest find was uranium! It had been there all along, but he had not been able to announce it!

“But I wanted to make sure that what I announce is a reality,” his speech went. So the country must stop being divided and work together on the oil and uranium to become a great superpower…

This was to be a superpower of hope for humanity, where people of all kinds could live and work together in peace! Obviously, that excluded Carnegie’s people.

On February 14, Carnegie’s licence was cancelled. Then, a couple of days later, in spite of reassurances that Gambia accepted that it had not found uranium, Gambian police detained the new country manager.

Charlie Northfield, who had only just been appointed, was bundled into prison on landing.

Carnegie pointed out in vain that traces of uranium are found in soil everywhere. So, of course there was some in the Gambian soil — but not in anything like the commercial quantities the president dreams about.

A few days later, and $450,000 poorer after bailing out Charlie Northfield, Carnegie wrote off its Gambia operations.

Now Carnegie is sticking to more normal places

Now Carnegie is sticking to more normal places. It is still operating in Senegal, a country where there are fewer funny stories to be found (a good barometer).

And it has announced a three-year co-operation agreement with the US Geological Survey to look for rare earth deposits in the US.

No-one is forecasting any profits for a long while. Last year Carnegie made a pre-tax loss of £1.7m, or 3.19p a share.

Yet, before its Gambian adventure, Carnegie had been tipped as an interesting little speculation for those precious rare earths.

The lesson is — beware of any country where the stories of its rulers are as bizarre as they are in Gambia!

Keep mining!

Erin and Isabel

Source: Carnegie Minerals’ Gambian Adventure

Here is a country that has bucked the trend of dismal economic performance witnessed by most resource-rich countries in Africa.

The reason? The first diamonds were discovered in Botswana back in 1966. Yet it now produces 22% of the world’s sparklers. Revenue from those diamonds contributes 33% of GDP. But that is not all. Instead of simply squandering its resource wealth (as many African countries do) it has ploughed it back into health care, education and transport.

So Botswana looks after its people and it also invests in infrastructure! There is good governance too and, better still, no exchange controls. The list of positives goes on. What was one of the poorest economies on the continent is now one of the wealthiest. In 2006 and 2007 growth rates sat at around 4.7%. Result!

Botswana and economic freedom go hand in hand

Not surprising then that the Index of Economic Freedom (developed by the Heritage Foundation and the Wall Street Journal) gives Botswana a rating of 68.6%. Better still, Botswana has the lowest tax burdens in Southern Africa. It scores 76.4% in fiscal freedom.

That is not bad going if you consider that the UK’s overall score was just 79.5%! To come to this conclusion, ten factors are considered – business freedom, trade freedom, fiscal freedom, property rights, freedom from corruption and so on…

DeBeers is one that has been there for the long haul! The diamond giant has clearly no intention of leaving. It has recently funded the development of a technology-driven diamond sorting facility to the tune of US$83m. Phew! This will be known as the Diamond Trading Co (DTC) Botswana. The line will make De Beers the biggest sorter and valuer of diamonds in the world. And it is even willing to share in the success too – this is a 50/50 joint venture between Botswana’s government and the world’s most famous diamond miner.

The venture is expected to increase value for this southern African country by spinning out new industries. The project is expected to create 3,000 jobs in diamond cutting, polishing, sales and marketing and jewellery manufacture. That translates to 30% increase in diamond jobs and a 10% rise in manufacturing jobs. Furthermore by 2009, De Beers’ global production of diamonds is expected to be aggregated in Botswana.

So a big vote of a confidence from the biggest diamond company in the world! In fact Nicky Oppenheimer, De Beers’ chairman, can’t sing Botswana’s praises loudly enough. He reckons that Botswana is a glittering example in Africa and others could learn from its success. And that is expected encourage other businesses to invest here too!

ETFs – a golden glow on Botswana’s horizon

But it also rouses the interest of private investors like us! According to global index provider Standard & Poors, the strong performance in many African markets is making the region increasingly attractive for investors. Though we are fully aware of the risks in Africa, Botswana, it seems, is one of few exceptions. It has the resources and it has good government too.

Continues below

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How much will you make?

In 2007 the number of ETF launches rose 64% to 457. And in December last year assets under the management of listed ETFs came in at around US$796bn. But we are interested in commodities, and gold ETFs have done particularly well.

But they are not yet widespread in Africa – there are said to be about 11 ETFs on the continent. In fact only South Africa and Egypt (which we sometimes forget is in Africa) offer ETFs. But it now seems that the BSE really does mean business. It recently held an ETF conference in the capital Gaborone. That proved to be very popular – it was booked out! The BSE only expected 60 participants but 102 fund managers, stock brokers and finance managers turned out in force.

Setting up for more investors

The BSE seems to mean business. It has done several detailed studies on the mechanism and feels confident that it has the capacity to handle ETFs. It has already helped to fund the central depository system (CSD) necessary for ETFs.

Now it says it will stump up the cash for an automated trade system (ATS) – to be installed by this summer. BSE CEO Hiran Mendis says that would help provide trustee services and have the capacity to act as administrator of the fund. Last but not least it is awaiting a central securities depository (CSD) licence from the Central Bank.

The BSE, which lacks liquidity, will probably first list international funds. And that could happen as early as the summer. That will transform capital markets and bring much needed liquidity to the Botswana exchange. And it could attract banks like Deutsche!

So keep polishing,

Erin and Isabel

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