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🕐24.02.10 - 10:29 Uhr

The Bottomline Report: Undervalued Explorer Strategically Positioned for the Next Commodity Crunch

<html dir="ltr"> <head> <title></title> </head> <body> <div align="center" style="font-family: Arial,Helvetica,sans-serif; font-size: 11px; color: rgb(85, 85, 85); text-align: center;">If you have trouble seeing this e-mail, please click here: <a href=" /> Add <a href="mailto:"></a> to your address book or safe list to ensure delivery of email blasts (<a href=" for instructions</a>) &#160;</div> <table width="768" cellspacing="0" cellpadding="8" bordercolor="#000000" border="1" align="center"> <tbody> <tr> <td width="748"> <table width="749" cellspacing="0" cellpadding="5" border="0"> <tbody> <tr> <td><a href=" width="800" height="292" border="0" alt="" src=" /></a></td> </tr> <tr> <td> <div align="center" style="font-family: Arial,Helvetica,sans-serif; font-size: 20px; color: rgb(0, 0, 0); font-weight: bold;">Undervalued Explorer Strategically Positioned for the Next Commodity Crunch</div> </td> </tr> <tr> <td> <div style="font-family: Arial,Helvetica,sans-serif; font-size: 12px; text-align: justify;"> This boom is just is getting started. The combination of surging demand for super alloys, high speed steel, chemical catalysts to "desulphur" heavy oil, and the explosion in personal electronics like smart phones and net books over the last few years has propelled demand for a little-thought-of commodity: cobalt. The rush to satisfy the "wants" of a growing middle class around the world has created a massive surge in demand for cobalt. Demand for the essential, useful, irreplaceable blue metal has grown at a 5.6% annual rate over the past 10 years. Meanwhile, cobalt supply has only been increasing at 3.8% per year. The supply demand imbalance, growing wider and wider each year, has caused a near-panic situation in the cobalt market. And it went a long way to driving cobalt prices up more than 600% from an average price of $6.91 per pound in 2002 to a recent high above $50 per pound. Despite the rise in cobalt prices, demand continues to outstrip supply and the situation is only going to get worse. The real reason forward-thinking investors are getting interested in cobalt now is because demand growth for the "strategic metal" is about to double to 10% per year thanks to one of the biggest trends sweeping through one of the world's largest industries. 1,525% Growth Ahead The next big driver of cobalt demand growth is the batteries for electric and hybrid cars. Since cobalt is an essential element used in many types of lithium-ion batteries, demand for cobalt is about to soar. A recent industry analysis by Credit Suisse estimates hybrid electric vehicle (HEV) sales to surge form 400,000 in 2009 to 6.5 million in 2020. That's an increase of 1,525%. On top of that, Credit Suisse finds sales of plug-in HEVs and EVs to go from "virtually zero" to 8 million per year by 2020. That's a lot of batteries and, from cobalt's perspective, that's another new layer of demand on an already tight market for cobalt. Demand is soaring and there isn't much new supply coming on line to produce it. That's why it's no surprise to see a top metals industry web site like Metal-Pages.com warn, "Cobalt prices could go off the scale..." Of course, one industry's supply crunch is another industry's opportunity. That's why Resource Investor says, "There is huge potential for companies positioned to provide a stable supply of cobalt." One of those companies positioned to take advantage of the cobalt boom is <a href=" Ventures (TSXV:PVS)</a>. Puget Ventures is positioned to become Canada's next primary cobalt producer. The company has assembled the essential combination of the right project, the right personnel, at the right price, and, with a new 43-101 compliant resource estimate just a couple months away, everything is coming together at the right time. The Right Project... Puget's flagship project is the Werner Lake Cobalt Mine. Located in the mining friendly province of Ontario, about 50 miles across the US-Canadian border, Puget's Werner Lake Cobalt Mine development project hosts an ore body of high-grade cobalt, copper, and gold. The project has previously discovered reserves and resources (non-43-101 compliant) of 1.1 million tonnes of 0.31% cobalt, 0.29% copper, and 0.011 ounces/t of gold. In the 1940's, the property contained an operational cobalt mine which found grades as high as 20% and mined ore at grades above 2% cobalt. To put those grades in perspective, two other top cobalt development campanies' flagship properties contain 0.13% cobalt (Fortune Minerals) and 0.21% cobalt (Geovic Mining). That's just one piece of the large and growing Werner Lake pie. In December 2009 Puget commenced an aggressive 4000 meter program of deposit definition drilling. And the early results from the program are starting to show there is a lot more cobalt and other valuable reserves and resources to be found. Results of the first eight holes have been very encouraging. The near-surface cobalt discoveries include grades as high as 0.44% cobalt and 0.28% cobalt with copper mineralization in some areas above 2%. The full NI 43-101 compliant resource estimate is due out in the spring of 2010. Erin Chutter, President of Puget Ventures, explains, "Over the last few months, we have developed a very good understanding of the terrain, geology of the deposit and historic engineering, metallurgical and drilling work previously completed on the Werner West cobalt mine. With our NI 43-101 resource targeted for April/May, the next few months are going to be quite extraordinary as we combine the knowledge from our technical team with the results of this ongoing program." Puget Ventures' future doesn't depend on one project though. The company has amassed an entire stable of mineral claims. For example, surrounding the Werner Lake Cobalt Mine project is surrounded by the entire Werner Lake Mining Belt. And thanks to a recent strategic transaction Puget Ventures increased its ownership of the entire mining belt from 60% to 100%. The Werner Lake Belt is host to many high-potential prospects: Werner Lake West Werner Lake Minesite Cobalt Eastern Shallows Cobalt Big Zone Norpax Nickel These mineralized zones have historically shown they contain all kinds of increasingly valuable minerals. For example, the 60 km mineralized strike encompasses copper, copper-cobalt and nickel-pge resources. To give you an idea of the potential of the Werner Lake Mining Belt prospects, just take a Norpax Nickel. Norpax is a previously explored and developed copper-nickel project with old shafts that leftover from the 1950s. It contains very strong grades of copper and nickel. The minimum initial estimated resource of 1 million tonnes of 0.5% copper and 1.2% nickel. In addition to owning practically the entire Werner Lake Mining belt, Puget's entrepreneurial leadership inked a deal with mining giant, Goldcorp (NYSE:G). The joint venture gives Puget a 40% interest in 3,423 ha of prospective exploration territory in the prolific Red Lake mining district. The joint venture, named Trout Bay, has already shown it has some serious potential. Past drilling results include 11% zinc, 1.64% copper, and 0.34% lead with showings of high-grade germanium, indium, and silver too. Clearly, Puget is not a one-trick pony when it comes to resource development. It has some serious high-potential assets. But more importantly, from an investment perspective, they're valued at exceptionally discounted prices. The Right Price... At the current market value Puget is fetching a market value of about $5.5 million. It has just fewer than 26 million shares outstand and is trading for about 21 cents per share. In addition to that, Puget is sitting on a relative of cash, cash equivalents, and marketable securities of more than $2.6 million. That's nearly half the market value of the company! And it cuts the Enterprise Value (how much it would cost to takeover the company including cash, securities held, and debt) to a mere $2.9 million. In the cobalt development sector, a value of less than $6 million for an entire company is a stunningly low valuation. Other cobalt development companies are being valued by the market for more than $100 million. For example, Baja Mining (TSX:BAJ) is developing a cobalt-copper deposit in Mexico. It has a market value of $101 million. Also, other top resource development companies with cobalt exposure are getting much higher premiums than Puget. Leading the way are Formation Metals (TSX:FCO), Geovic Mining (TSX:GMC), and Fortune Minerals (TSX:FT) are currently valued at $56 million, $76, and $77 million respectively. Puget Ventures, at less than $6 million, is trading for 90% less than most companies in the same sector. That's why it's safe to say, relative to its assets, Puget shares are deeply undervalued. Compared to other resource development companies with cobalt exposure, Puget shares are downright cheap. The Right Personnel... Leading the way at bringing the full value of the cobalt upstart's assets to shareholders is an experienced management team with proven capabilities: Michael Dehn � CEO, Director: Former exploration manager of Goldcorp in Red Lake and currently sits on the boards of directors of Metalore, Orex Exploration, Argex, and NWM Mining. Erin Chutter � President, Director: Puget Ventures with extensive experience in the in the mining industry including leading strategic planning for three TSX-listed exploration companies. Chris Couzelis � Chief Financial Officer: Years of public company financial management experience and financial consultant to ICO Therapeutics, Bionic Power Corporation, and Ability Pharmaceuticals Tim Mann, P. Eng. � Engineering Advisor: Mining engineering with international operations and technical mining development management experience, engineering and operations with Goldcorp, SNC-Lavalin, and Detour Lake. Adrian Mann, Phd, P. Geo � Consulting Geologist: Experienced project evaluator who also has developed expertise in drill program planning and execution, geological reconnaissance analysis, and operational management. Also currently acts as VP Exploration and sits on the board of directors of Planet Exploration Inc. Toby Hughes, P. Geo � Project Geologist: Extensive experience in Ontario, including with Goldcorp, managing base metals exploration and discovery activities in North and South America. The people are just as important as the project and the value. Despite everything Puget has going for it from the fundamental "bottom-up" perspective, if it's not the right timing or the right "top-down" winds blowing in its direction, it's racing uphill. In this case, the timing is actually an added attribute for Puget. All at the Right Time Everything appears to be coming together at for Puget. Years of geological reconnaissance work and millions of dollars of pre-drilling development and planning are on Puget's sizeable properties is on the verge of coming to fruition. And it could not be coming together at a better time. As discussed earlier, the cobalt market is poised to make another epic run. Remember, when cobalt demand was increasing at a 5% clip over the last decade, cobalt price rose as much as 600%. Now though, due largely to surging demand from battery-makers supporting the rapidly growing hybrid and electric vehicles markets, cobalt demand is about to rise at a 10% annual rate for the foreseeable future. There's no telling how much higher cobalt prices could go. A few of the leading mining and metals industry publications have gotten the first bits of the unfolding cobalt story, but it's only a matter of time until the mainstream puts all the pieces of the cobalt puzzle together. And you can bet companies like <a href=" Ventures</a> (<a href=" which have strategically positioned themselves by acquiring sizeable, high-grade assets, and that trade for a fraction of their peers, are going to go along for a very enjoyable and lucrative ride. </div> </td> </tr> <tr> <td width="100%" bgcolor="#003366"> <a href=" Click Here for a Free Real-time Stock Quote on TSX-V: PVS</a> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> &#160; <table width="760" cellspacing="0" cellpadding="0" bordercolor="#111111" border="0" align="center" style="border-collapse: collapse;"> <tbody> <tr> <td> Disclaimer: Vantage Communications Ltd. was paid to distribute this bulletin. 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