12/09/2005 12:00 am EST
Platinum Group Metals is an intriguing—albeit low-priced and highly risky— stock. The junior platinum mining company, which is based in both Canada and South Africa, is a current favorite speculation from Eric Roseman. Here's his review.
"Based in both Canada and South Africa, Platinum Group Metals Limited (CA:PTM Toronto) is a junior mining exploration concern with combined management experience of 20 years on two continents. Formed in 2000, PTM is focused on the development of platinum operations in Canada and South Africa with significant mineral rights in the Northern and Western Limbs of Bushveld Igneous Complex of South Africa, including a large scale joint-venture with Anglo-Platinum.
"When I see a junior exploration company hooking-up with a major, I get very interested. The majors don't invest millions for nothing; partnerships of this magnitude usually, but not always, promise a discovery. The Western Bushveld partnership with Anglo-Platinum, where PTM has the right to earn a 37% interest, includes a total inferred resource of 4.7 million ounces of platinum, palladium, rhodium, and gold with additional areas under drilling investigation. This site sits in prime platinum territory surrounded by 12 mines that produce 70% of the world's platinum supply.
‘In Canada, Platinum Group Metals is a large mineral rights holder in the area surrounding Canada's only primary platinum and palladium mine near Thunder Bay, Ontario. Thirty-five times rarer than gold, platinum is vital to the production of 20% of the world's consumer goods with 70% of the supply coming from just 220 square miles located in the Western Bushveld in South Africa.
"Though PTM is still hoping to hit the discovery jackpot, I think it's a fair gamble at this low price, combined with a major partnership with the king of platinum - Anglo-American. PTM is in good company, sitting smack in the middle of proven reserves. Currently, this stock is the only one to receive our 'Best Buy' designation. We consider it a tremendous speculation at this low price. If there's any discovery to be made in South Africa's rich platinum basin, then PTM is the way to play this hot commodity. We're aggressive buyers up to C$1.70. This could be a $3 stock over the next six-to-twelve months."