Monday, May 2, 2011

What a trying time this has been recently for the TSX Venture board

I suppose it could be very easy to become somewhat disillusioned with the performance of most stocks on the Venture board over the last several trading sessions. Personally I prefer to take a different view of this in many instances. Admittedly I tend to be a contrarian in my strategies generally, and as such I would find it necessary to expect the Venture board to sink to the point that it would not exist. I am sure most of you aware that this is so highly improbable it would defy the greatest of odds. This, in my opinion, is the time to buy those stocks that one has had on their watchlist and that you have done all your due diligence on. If the company has shown above average chances at outperforming most other stocks in the long term then this type of market correction creates superb buying opportunities.

One of the companies, that I personally think has tremendous upside potential, is Focus Metals (TSXV:FMS). This company will be receiving their updated NI 43-101 very soon which I believe will help the stock with some support and hopefully some movement up. What I truly believe will make a big difference is when they announce a take-off agreement which the CEO has recently been working on in a recent trip to Europe. This will draw the attention of the market in general and once that happens they will begin to realize this company will progress to the next level. The large investment people do not tend to get involved at the present levels, they prefer to invest in companies that have been de-risked to a large degree. With the value of the graphite deposit alone being in the vicinity of $2.5B - $5B, and this could possibly turn out to be much higher once more drilling is done to expand on current resources. Now add to this the fact that FMS has another project called Kwyjibo in which they have as a joint partner none other than SOQUEM. For those unaware of who SOQUEM is, they are basically the mining arm of the Quebec provincial government. SOQUEM is easily recognized as one of the most progressive, socially responsible and developmentally-aggressive operators in the province of Quebec.
The value of this relationship – through new discoveries, infrastructural and administrative support and tax benefits – flow through to our domestic and international shareholders. Focus Metals has the option after two years, of acquiring 50% of SOQUEM’s interest in Kwyjibo.
Additionally, external factors such as Chinese export restrictions; national security obligations; government mandated production targets for electric vehicles and the discovery of new manufacturing applications for carbon tube nanotechnologies from graphene bode well for our investors for the foreseeable future.
On a personal note, and as someone with an international marketing and sales background with a history of cold-calling, door knocking and brick pounding, it was personally gratifying that commodity buyers and investment bankers saw the Focus Metals opportunity and came knocking on my door when we listed on the TSX Venture Exchange.
In the short time since listing, FMS has attracted ample funds to support and expand our Quebec drilling activities and has permitted us to take our first steps towards graphite production at Lac Knife.
Our Kwyjibo Cu-REE property is considered one of the best iron oxide, copper and gold (IOCG) prospects in Quebec.
And at the beginning of 2011, as one of only a handful of publicly-traded graphite and rare earth element miners, we find ourselves perfectly positioned to meet our core objective of building and increasing shareholder value as we expand and grow.

Then one must also take into consideration the properties FMS holds in the Labrador Tough. There has not been much activity on this property but it is situated in a very likely place to be of value.

In closing, I reiterate that I do not see the TSX Venture board becoming defunct anytime soon and likewise I feel confident buying more FMS shares which I have been doing. I urge all those who think this company sounds like it may fall within your risk tolerance to go to and do your due diligence. This to me is a rare find to get in at these levels in a company that holds this much potential.

For disclosure purposes I have received no compensation of any kind for this post. I do own shares in FMS and could possibly buy more in the future.

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