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Tuesday, February 07, 2006


MMGG and Other Zinc Stocks

Since our MMGG Valuation Analysis, the price of zinc has continued to climb from $.9366 to $1.08 per pound. Zinc stocks have rallied sharply as well. Amazingly, despite its recent rally, MMGG is still significanly behind in price appreciation relative to other zinc stocks, near historic lows in relative terms. It has a long way to go to catch up...

Here's a comparison chart with EZM showing MMGG was 17.86 times EZM's price in 2003, and is only 1.29 times EZM's price now.

Here's a comparison chart with YZC showing MMGG was 13.49 times YZC in 2004 and is only 3.55 times YZC now.

Here's a comparison chart with BWR showing MMGG was 8.3 times BWR in 2003 and is only 1.92 times BWR now.

With them well into their feasibility study with one of the few huge zinc deposits in the world ready to go into production in the next few years, one would think MMGG would be leading the zinc stock performance, not pulling up the rear. Our original report described the reasons MMGG sold down to such a tremendous value level. Add in the silver/copper potential, and MMGG should improve significantly on its relative performance vs. other zinc stocks.

This article discusses takeovers in the gold industry at a very steep price ($1100 per reserve ounce). Given this premium takeover situation in the gold mining sector, it makes sense that Anglo American is selling their gold mining unit and focusing on investing in base metals and other areas. To give you some idea of how undervalued MMGG is, these gold mining companies were bought out for more than 200% of the value of their gold reserves. By comparison, MMGG is currently valued at 1-2% of its zinc resource.


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