MineCore International (fka MCIO)

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Has anybody seen this?

http://www.themoneyblogs.com/trading/underground-trading/mcio-shakeout-opportunity-and-update.html

MCIO Shakeout Opportunity and Update
Jea Yu | Sun, 05/10/2009 - 1:53am | largest emerald, MCIO, Minecore, sapphires | Add a comment

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MCIO Shakeout Opportunity and Update



MCIO stock has taken a hit in the last several weeks as it appears a handful of sellers have finally thrown in the towel. For those who have pinksheet level 2, UBSS market maker has been steadily downticking from the .80 level but rarely getting hit. This same seller looks to have finally been taken out at the .18 x .23 level, absorbing over 50,000 shares and finally upticking. NITE seems to have a few more shares but once MCIO cracks through the .35 area, then it should resume back to it’s prior base levels .70 x 1 range. My longer term target still stands in the $10-12 range.



mcio0510.gif



This makes the .20 x .30 range a very attractive add/entry level.



On a bright note, there was a lot of accumulation and support off the .20 level last week with some heavy volume. It’s better to shakeout down here to relieve upside resistance than later on at higher levels. Remember, that thick UBSS seller was trying to unload over 50,000 shares from .80 and threw in the towel in the .18 x .23 range. That relieves over 50,000 shares of upside resistance. Better to eat through that down here than have to deal with it back at the .80 range.



MCIO released an annual company update Friday. I really liked the transparency given on what is happening with the company. This is a must read for any investor in MCIO. It can be found here: http://www.marketwire.com/press-release/Minecore-International-Inc-986647.html



There are two very significant items that stuck out the most to me. These two items can bring significant value to MCIO shares.



MineCore is exploring strategic opportunities with various sovereign Chinese groups pertaining to investment, optioning and/ or Joint Venture to develop MineCore's properties in Madagascar. MineCore will provide updates upon mutual acceptance of disclosure terms.



This line is very significant. It pretty much confirms the possibility of an acquisition interest from China. Why is China so significant? In case you haven’t paid attention, China has over $2 trillion (US dollar) in surplus reserves. They have been buying up natural material resources all over the world in an effort to accumulate tangible assets aside from American treasury bills (which they already own over $1 trillion worth). I’ve stressed the superior efficiency of natural sapphire in the industrial applications from semi conductors, solar cells, lasers and LCDs. This was notably pointed out as well in the press release and highlights of the white paper research MineCore commissioned. MineCore is not only an attractive target for a pure sapphire play (15,000 hectares of sapphire bearing properties), they are the ONLY publicly traded target. This should put a halo effect of the possibility of acquisition as the lotto ticket portion of the play.



Secondly, the discussions with Societe Oregaco has significant undertones. Looking up this company on Google, I found something very interesting. Oregaco seems to be the apparent owners of the world’s largest emerald, weighing 1182 pounds with values ranging up to $200 million USD. It is currently on display in a Hong Kong museum. The old Madagascar administration was claiming it as a national treasure but lost claim in court. Even more significant, the old administration is no longer in place. Madagascar will soon be appointing a new minister of mining.



Here’s a link: http://www.lifeofguangzhou.com/node_10/node_37/node_83/2008/07/29/121729456545449.shtml



From the article, “However, a spokesman for gallery said Chan, a painter, is not related to the incident and the stone is owned by a French company Orgaco.

In an e-mail reply to China Daily, the gallery said Orgaco did not make any false representation on the nature of the gemstone, saying emerald is a member of the beryl family.

"Beryl is the substance, emerald is the color of the substance," it said.

The gallery said a court in La Reunion, a French island situated east of Madagascar, ruled in June that the stone belonged to Orgaco and it has been legally exported.”



While there may be unclear details, there is a clear link on the ownership of the stone. Consider if MineCore acquires Oregaco’s assets, that would literally bring $200 million in a tangible asset right onto the books adding an extra $2/share on just the emerald alone. This asset could serve as leverage/collateral for financing its mining operations. Just thinking outside of the box on this point.



Thanks to the press release update, I am just as confident as ever that this shakeout in MCIO is bullish for the stock and should snap back up to the prior range .70 x $1 before breaking out with less overhang. I still feel $10-12 is a solid long term target based on forward projections. I’ve gone into details deriving that valuation in my prior blog entries.



I will post updates when more news or developments form. Please remember that this is a highly speculative asset play. It is basically an all in type speculation and not meant for intraday trading. Risk capital is all that should even be considered on this one after you’ve done your research. The upside for me is more than enough versus the downside risk, which is why I am a long term holder in this one. Good trading and good luck gang!






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