All zinc stocks have taken a big hit, and as a pre-production junior on the bulletin board that had been up a lot on the year, MMGG has taken a bigger hit than most. Once it broke the support in the mid-2's, it headed straight for the support in the mid-1's, where it has bounced from the 1.51 low (the 1/23 high was 1.51). There was one seller (through JEFF on level II) who had pressured the stock down for months, but apparently is done now.
The fundamentals have only improved since the stock hit over $5 in May, with the feasibility study advancing and some great drill results for silver (http://www.metalin.com/05-24-06.pdf ) and a potentially new zinc deposit (http://www.metalin.com/06-01-04.pdf ) along with higher zinc prices. With the stock losing over 2/3 of its value on relatively low volume the last few months in the sector downdraft, I think it's an amazing bargain and have been accumulating more since $3.
At the current price under $2, the stock is trading at well under 1% of the value of the zinc in just the deposit undergoing the feasibility study. That's ridiculous for a world-class zinc project at such a late stage in a safe area of the world with existing infrastructure from previous production (high-grade silver direct shipped without milling).
Here's a writeup explaining why several major mining companies are likely to try to buy Metalline's zinc project after they complete the feasibility study late next year: greatinvestments.blogspot.com
While, as a pre-production bulletin board stock (though there are rumors they may get Amex listing soon) that hasn't completed their feasibility study yet, MMGG's not for everyone, I believe its world-class project size, tiny market cap, high silver potential, high zinc exploration potential, and politically safe location combine to give it the highest upside potential of any zinc stock in the world.
When the largest late-stage zinc project in the world outside of Iran and Bolivia goes on clearance sale because of a sector correction, I'm a buyer. |
