Canadian Company Spotlight

CMC Metals Ltd. is focused on providing sustainable growth and value to the shareholders through the progressive development of precious metal properties to production phase. There are few companies that are focused on bringing mineral properties into production. CMC is only interested in properties that have a high potential of becoming mines. To successfully accomplish the task of developing a mine, a strong management team is critical. There is over 100 man years of experience on the CMC Board of Directors. Each member brings a unique contribution to the company to ensure that the properties, capital, and labour resources are utilized efficiently.

Profile

It may have gotten slightly lost in the near-hysteria over recent peaks in the price of gold, but silver is still a force to be reckoned with. Both an industrial metal and a precious metal, silver – whose chemical symbol is Ag — boasts thousands of uses due to its outstanding qualities, among them, the highest electrical and thermal conductivity of any metal. It is also an agent for killing bacteria, and is used in water filters to do just that.

Silver has also been a vital component in photography, and while lacking the sex appeal of the gold we see in the Academy Award statue, silver was initially used in early motion pictures, embedded into movie theatre screens upon which fans watched their favourite stars (hence the term, “silver screen”).

As an industrial metal, the list of silver’s uses is expanding all the time, to include the manufacture of batteries, bearings, soldering, catalysts and electronics; in mirrors and coatings, medical applications and solar energy. And the list is growing all the time, which is why silver deserves to be watched regularly.

The metal’s widespread use in electronics is again being pointed up this summer, as soccer aficionados take in the action from the World Cup tournament in South Africa, the first television event to be viewed in 3D (albeit in movie theatres rather than at home). Soccer’s governing body, FIFA, has joined with Sony (NYSE:SNE) to broadcast 25 World Cup matches in the 3D technology made popular by the blockbuster movie Avatar. With this new technology making its way further into our consciousness – and with the economic recovery gathering steam, enabling more folks to buy this new technology -- silver will be all the more prized as the years wear on as people replace their old TV’s in the future for 3D TV’s.

As a precious metal, silver has no equal in its widespread use. Silver coins are among the oldest examples of coined money, gold being too far out of reach (at 16 times silver’s value) for everyday common use. What’s more, if properly cared for (unlike gold, it can tarnish otherwise) silver jewelry is highly prized for its brilliant luster and its ease of fabrication, properties that it shares with gold and for which it has nothing to apologize.

And experts strongly suggest investors consider owning silver in their portfolios. As far as these experts are concerned, silver is insurance, a safe haven against some of the uncertainty that makes other markets jittery (to compare with gold), and hence, something folks of modest means should make a priority. Some silver watchers go even so far as to advise that folks put as much as 40% of their overall precious metals’ holdings in silver.

And with the white metal’s relatively cheap price these days, why not? One commodity analyst at New York-based CPM Group, Chintan Parikh, insists that with a bit more help from investment demand (and factors mentioned above) silver may rally appreciably from its current perch, just shy of $19 U.S., before calendar 2010 is out.

“Prices may spike as high as $25,” Parikh says. At the very least, it should breach its most recent high, which was set at $20.79 in the spring of 2008,” he adds.

Parikh also says much of the trend toward higher prices is being driven by the fact that traditional industrial end users of silver, such as the ever-burgeoning global electronics industry, have in recent weeks begun to replenish severely depleted inventories.

Another key agent of higher prices in 2010, Parikh says, will be the advent of new market places for silver, including pent-up demand for silver-zinc batteries in ‘smart’ automobiles and an array of portable electronic devices.

In fact, the widespread adoption of silver-zinc batteries is going to be “one of the major drivers behind a rise in prices because it may absorb a lot of silver,” he adds. Though this important new application for silver might not necessarily become a major factor in demand for silver right away, it promises to become a very sizeable marketplace down the road, he suggests, especially for those sexy new electric automobiles.

Mostly, China is forecast to become a huge adopter of electric cars to curtail its rising dependence on foreign oil and to reduce its air pollution. In fact, electric cars and hybrid plug-ins will account for more than half the auto market in China by 2020. In short, folks should get hip to these possibilities and get on the silver bandwagon before things get too expensive.

Indeed, the $18.75 price recorded on June 21 is just a shade below its 52-week peak of $19.64, to which silver climbed in May, after making its way out of a $12.64 basement which the metal occupied in February. However, all the above prices are positive bargains, relative to silver’s modern high of $49.45 U.S., achieved in the early 1980s. But while gold is closely monitored toward its dizzy new record heights, silver is kept under a bushel, relatively speaking, making it possibly the best-kept secret in town.

Aware of the promising and exciting immediate future for silver, Vancouver-based CMC Metals Ltd. (TSX-Venture:CMB) took the bold step of announcing last month it had purchased the Bishop Mill in the town of Bishop, California – a mill first built in the mid-1980s for Mammoth Mountain Mining. And CMB is putting its money where its collective mouth is, investing $250,000 U.S. for the mill itself, another $350,000 U.S. to upgrade and make it fully operational. The cash buys CMB five claims surrounding the mill, as well as a 3,200-square-foot warehouse and 960-square-foot equipment maintenance building.

What has CMB CFO Michael Scholz particularly excited is that, in contrast to his company’s holdings in the very-seasonal Yukon Territories, California provides a setting of seemingly endless sunshine, plus a place for neighbouring miners to send their ore for manufacture into silver – an outlet he says they’ve lacked until now. It is important to note that the Bishop Mill is fully permitted and was acquired to tap into the resources of fully permitted mines in the area.

Finally, Bishop’s Mill provides CMB with a place to produce potentially lucrative silver year-round, providing cash flow to complement the work being done at its Canadian operations in the Yukon. No wonder Scholtz is excited.

“(Bishop’s Mill) is about three hours from Reno. How could we afford NOT to buy it? It’s like a house you love and you ask, ‘how could I afford NOT to buy it?’ While we are preparing to initiate a bulk sample on our Silver Hart property (and other properties in the Yukon), we’ve got this on the go.”

Scholz is also not above making predictions that the price for silver could double over the next two to four years. “Silver has been the poor, distant cousin of gold over the years,” he says, “but it has many uses, in currency, in telecommunications and TV, in the jewelry component. Plus, there’s the fact that the cost of production hasn’t changed in recent years. I mean, there’s no need to lay out up to $200-$300 million to set up a mill (as there might be with gold); $1 million, maybe.

CMB is focused on providing sustainable growth and value to shareholders through the progressive development of precious metal properties to their production phase. There are few companies whose priority is on bringing mineral properties into production. CMB doesn’t invest recklessly; it is only interested in properties that have a high potential of becoming mines.

Consolidation of the mineral industry has boosted the economical size of properties, creating a niche for small to mid-size properties that are below large mining companies-required criteria. CMB views this as an excellent opportunity to acquire and develop properties that are economical on a small to mid-size mine development scenario.

Advantages of small to mid-size mine developments – which should raise the pulses of those wishing to partake in the silver industry -- include quicker permitting process, smaller environmental footprint, less startup capital required, flexibility of semi-mobile milling, efficient leveraging of equipment capital at several properties, as well as lower labour-management requirements.

As earlier indicated, the company has built its reputation on several holdings in the Yukon. One is CMB’s 100%-owned Silver Hart property, home to high-grade silver mineralization with silver grades positively shining.

Last fall, the company revealed some eye-popping assay results from Silver Hart. A total of 1,928.7 meters were logged in 2009, with 28 drill holes completed to test new areas plus step-out and down dip depth drilling. Mineralization ranged up to a staggering 54,660 grams per tonne!

In the south-central Yukon lies the Logjam Property, located in an area that contains numerous epithermal silver-rich veins and replacement style deposits. The property is comprised of 32 claims, and contains nine high grade veins that are ready for development.

Lastly, CMB boasts the Wheelbarrow property, located 20 km northeast of Atlin, B.C., comprising four claims with a surface of 1,489 hectares. There has been a substantial amount of historical work conducted on the property since the original discovery in the early 1900's. Mining has been so much a part of Canada’s historical economic development, and mines such as the one at Wheelbarrow have been an integral and exciting part of that tradition.

Nearly 4,000 metres of drilling, extensive trenching, geological mapping of host units, soil surveys, and airborne Mag and VLF-EM was conducted over the entire property. The property borders two past producing mines plus the Adanac Ruby Creek property. There are seven known mineralized zones that have been identified with high-grade silver, providing more to tantalize investors unaware of CMB’s exploits in the Yukon up until now.

CMB plumbed a 52-week low in terms of its stock price, hitting 13 cents CDN per share last July, in contrast to its 52-week high of 36 cents CDN only a month later, in August 09, in the throes of the mining season up in the Yukon. This stock has shown the willingness to move quickly when there is reason to, something that we are hoping can be repeated with future results from several of their properties.

Looking at the stock from a technical perspective, there are a lot of positive signals that are worth mentioning. First off, looking at the stock chart over the last six months, its clear that the technical outlook for CMB has been improving, and it currently is finding itself in the crossroads of a longer term bullish trend. With Friday's upward price movement, a moving average crossover just occurred. The stock has been on a medium term downtrend that appears to have just finally crossed over into positive territory. The 10 day EMA just crossed the 50 day EMA signalling a new possible bullish trend. The stock also crossed over the middle bollinger band on Friday and also recently performed a MACD centerline crossover, all highly important technical indicators, and all are pointing upwards.

Looking at our video chart for CMB, it is clear to see that even a little bit of extra volume really moves this stock, and 25k to 30k in extra buying interest could cause the stock to breakout of its current trading range. In the video chart, key support and resistance points are described as well as other trading strategies. The major support level for CMB seems to be around $0.16, and this level has been respected for several months, so stop losses just below that level should be a safe area to setup in case prices don't go in the direction that one would have hoped. To view the full video chart, investors are encouraged to click on the link located here.

Like we always say at this point in our profile, remember that these are only our interpretations of CMB`s stock chart, and in the video chart case, 123LearnToTrade.com's interpretation. As always, we encourage all investors to do their own due diligence and consult with a financial advisor prior to making any investment decisions.

This still affordable price of 19 cents should plant a special urgency in the minds and hearts of prospective investors who are anxious to cash in on the upward momentum of the “white metal”, for stock prices for silver producers like CMB are not likely to remain low for very long, bearing in mind the predictions of silver experts, the many applications for the metal, and the immediate prospects for the company in California, not to mention the success it is already enjoying in British Columbia and the Yukon. CMB looks to be well-positioned to take full advantages of these opportunities, and fulfill its mandate of maximizing shareholder value.

We at AllPennystocks.com are also feeling the buzz, and look with interest to the earliest results from all CMB’s properties, within Canada and without, while still urging investors to perform their own due diligence on the company.

Donald Wedman, B.Sc. (Engineering), P.Eng.

Position: President and CEO

Mr. Don Wedman received a Bachelor of Science, Mining Engineer, at the University of Alberta. He has over 25 years experience in mine feasibility assessments, development, and environmental permitting. His project management skills are an asset in moving exploration properties into the development/production stage. From 1981 to 1997 he was a Senior Engineer with Alberta Power Limited (ATCO Power) managing fuel contracts, contract negotiations, and conducting mine resource assessments. In 1998 he joined Geographic Dynamics Corp. as the General Manager, for project managing environmental and ecological resource assessment studies. From 2003 to 2005 he also was the Vice President of Coremetric Development Corp., assisting in the development of the first iron quarry in Alberta. He has served on a number of volunteer boards including APEGGA Career Committee (Chairman), and the Edmonton Branch of CIM.


Michael Scholz, B.Com., LL.B.

Position: CFO and Director

Mr. Michael Scholz received both a Bachelor of Commerce (B.Com.) and a Bachelor (LL.B.) of Law from the University of British Columbia. From 1978 to 2001 he was Solicitor and Senior Partner of the law firm Alexander Holburn, and is a member of the BC bar. He is a director and Chairman of Avcorp Industries Inc., a director of Uniserve Communication, and from 2001 to 2004 was President, Vice Chair and director of Great Canadian Gaming Corporation.


Steve Mathiesen, B.A. (Economics/Commerce), LL.B

Position: Director

Mr. Steve Mathiesen has been a business lawyer for 25 years and is a partner with Lang Michener LLP, in its Vancouver office. His practice includes acting for public and private companies in mergers and acquisitions and in financings. Steve was the founder of CMC's predecessor company.

Jacob Brouwer

Position: Director

Jacob Brouwer is the Chairman and Chief Executive Officer of Brouwer Claims Canada & Co. Ltd., an insurance adjusting firm, and is the founding director and Chair Emeritus of Bank West Inc., Governor of both the YMCA, Vancouver, BC, and the Vancouver Aquarium and Member of its Finance Committee. Mr. Brouwer is a Charter Member of the International Institute of Loss Adjusters Inc., world headquarters in Chicago, Illinois, and a member of the B.C. Premier's Fund Raising Committee and Federal Conservative Fund Raising Committee. In addition to Mr. Brouwer's many accomplishments, Mr. Brouwer has sat on the Board of many commercial, public and other organizations during his reputable career and brings to the Company his many years of business experience.

Jatinder (Jack) Bal

Position: Director

Jack Bal is a business executive, with over 11 years of experience in the resource industry and public markets. His contacts in several international countries known for precious metal mining are invaluable in identifying potential property acquisitions for CMC. Mr. Bal was the founding member and Vice President of Apparo Software Inc., past Director of Saintstar Ventures Inc. and is currently a Director of Eaglestar Ventures Inc. and President of Journey Resources Corp.

Daryl Pollock

Position: Director

Daryl Pollock graduated from the University of Manitoba with a B. Comm (H) and has since enjoyed 35 years of business experience in marketing and investment related endeavors. More recently he served as President and CEO of Olympic Resources Ltd. from 1992-2002, prior to its merger with Whittier Energy Corp., with whom he sat as a Director. Mr. Pollock is currently involved in a variety of early stage development projects, primarily related to Alternative and Clean Energy.

Corporate Address:

CMC Metals Ltd.
Suite 305 - 369 Terminal Avenue
Vancouver, BC
V6A 4C4

Phone: 604-605-0166
Fax: 604-692-0117

Email: cmcmetals@shaw.ca.

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