Download now: The Downfall of Cable, and the Rise of 5G!

Palladium Hits 2-Year High

Carmakers Look to Economic Recovery

Written by Luke Burgess
Posted April 7, 2010

Palladium prices are trading at a 2-year high as automakers rush to stock up on the precious metal in the economic recovery.

Before the market opened today, Renault, Nissan, and Daimler became the latest auto manufacturers to announce a deal to jointly develop smaller and more efficient cars.

The automobile sector has been scrambling to meet tighter emission rules and make the most of rising consumer interest.

Palladium and platinum ended the first quarter 17% and 12% higher respectively, surpassing the single-digit gains posted by gold and silver.

Palladium Stocks

Since most of the world's palladium comes from South Africa and Russia, investing in palladium stocks can be a bit tricky. There are just a handful of large North American palladium producers including Stillwater (NYSE: SWC) and North American Palladium (AMEX: NAP)

There are also a few smaller companies exploring and developing similar palladium projects — including one that my colleague I'm particularly excited about...

It's a junior exploration and development mineral company with over 100,000 hectares, and it's located smack-dab in between the two largest palladium deposits in North America.

To the west is North American Palladium's Lac des Iles Mine, one of the largest palladium mines in North America. Lac des Iles has 3.7 million ounces of palladium resources and is projected to produce 140,000 ounces next year.

To the east is Marathon PGM's Marathon Mine — containing 2.4 million ounces of palladium reserves plus 3.0 million ounces of palladium resources. It was just bought by Stillwater for $118 million.

Take a look for yourself:

September 2010 Great Lake Map 600x308

These are two of the most important palladium mines in North America.

Every junior palladium explorer wants land around them.

This junior company has already made the discovery of a palladium deposit on one of its many mining claims of 730,000 ounces of palladium-equivalent resources...

But the company is actively working to upgrade and increase its palladium resource base.

The target: 2.6 million ounces of palladium-equivalent resources.

And it's worth 12.6 times more than the company's current market cap.

This means that — once this company becomes resource-heavy and properly valued — share prices could increase 1,163%.

And that's just at current palladium prices!

The last time palladium was entering a similar bull market, prices rapidly surged from $160 to over $1,100 an ounce — a 588% increase!

Fortunately, palladium prices have pulled back quite a bit, allowing for a buying opportunity. And if we have a similar bull market for palladium, prices could hit $3,438 an ounce!

With palladium prices nearing $3,500 an ounce, the investment gains from this small stock will start to increase exponentially...

I've already taken up too much time here. There's a lot more to this story that I want you to hear.

I haven't even begun to touch on how palladium prices are about to be forced higher by the global auto industry's “big switch.”

But you can learn more about the global palladium industry and how the auto industry's "big switch" will drive prices even higher simply clicking here or copying and pasting the following link into your internet browser's address bar: https://www.angelnexus.com/o/web/23291

Good Investing,

luke_signature.gif

Luke Burgess
Editor, Wealth Daily
Investment Director, Hard Money Millionaire and Underground Profits

Buffett's Envy: 50% Annual Returns, Guaranteed