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Platinum, Palladium Surge to 18-Month Highs

Written By Luke Burgess

Posted January 27, 2010

Platinum and palladium prices climbed to 18-month highs this week, boosted by demand from two newly launched ETFs.

The ETFS Platinum Trust (NYSE: PPLT) and ETFS Palladium Trust (NYSE: PALL) began trading on January 8 with much fanfare. And in the three weeks since their NYSE listing, both ETFs have witnessed large investments.

These ETFs — like many others — are backed by the physical metals. The platinum ETF currently holds 195,000 ounces; the palladium ETF holds 400,000 ounces. The metal currently held in the platinum ETF is worth over $300 million and is equal to over 11 times the world’s daily platinum output.

Platinum for immediate delivery rose as much as $1,629 an ounce this week, while palladium peaked at $466 an ounce.

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:

Good Investing,


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