On October 21st, I told readers of my Alternative Energy Speculator to buy shares of a company called Canadian Zinc (TSX: CZN)(OTC: CZICF).
On December 9th, we sold it for a 31% gain.
Zinc is a critical metal used for galvanizing iron and steel.
It’s used as an anode material for batteries. It’s used in alloys to make bronze, machine bearings, and nearly 14 billion pennies to date.
It’s part of photocopying products, fire retardants, luminescent pigments, and dietary supplements.
But none of that is why we so easily profited…
And as I’m about to show, you have the chance to make that same kind of gain in the next few days.
Timing
I have an advantage.
I sit in front of two computer screens and read all day. I get to follow multiple markets, stocks, trends, and patterns very closely. And because I’m tuned in, I pick up on a lot of things earlier than most.
A couple months ago, I came across some articles on Canadian Zinc. The story was interesting and promising, so I dug a little deeper…
It didn’t take long to learn the company had been pursuing permitting for its Prairie Creek mine since 2009. Delays and bureaucracy ensued, and by August 2010 the latest news was that an environmental permit decision would be issued by March 2011.
I came across the story in October, and still no decision had been issued.
So I dug deeper still.
The First Nations seemed to support the project, which is critical in Canada. The company had done community outreach, and had been developing the project for years. A working mine had existed on the site before.
In other words, I deduced there was no way a negative decision would be issued. Canadian Zinc was going to get that permit.
Since a decision was supposed to be issued in March, I figured it had to be fairly soon. So I alerted my readers:
We’ve also been talking more about zinc. Specifically, the qualities that make it a good option for grid and electric vehicle batteries and some of the other metals that can be produced alongside it.
As promised, I have a zinc play to release to you today.
The company is Canadian Zinc (TSX: CZN)(OTCBB: CZICF). It has a large zinc mine ready to go in the Northwest Territories.
The final permitting process has been ongoing for years. A decision was supposed to be issued in March of this year. It hasn’t happened yet, but it’s getting closer. And all signs point to a positive outcome, including starting to incorporate First Nations into the plan.
We’re buying Canadian Zinc (TSX: CZN) (OTCBB: CZICF).
We bought in at $0.61.
What happened?
From Reuters on December 9th:
Up to $0.83 from $0.61!
We took the money and ran.
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It Ain’t Luck
You see what happened there?
No mention of Europe, the stalling economy, unemployment, or housing woes. None of that stuff mattered in this case. The bullish scenario was irrefutable.
I have a habit of finding situations like that — and it goes back to when I first got started nearly five years ago.
My readers were in Xantrex (a electric inverter company you’ve never heard of) before it was bought by Schneider Electric in 2007; Solarfun as it ran from $9 to $19 in five months of that same year (it’s not even called that anymore and it trades for $1.00 — but that doesn’t take our double away!); BYD Company (PK: BYDDF) as it went from $11 to $55, thanks to Warren Buffett’s buying 10% of the company for $230 million…
And on and on.
I clocked 16.4% in 2007 as the Dow only rose 5%.
I reported 46.01% in 2008 — not closing a single loser — as the entire market tanked 31%.
I put up 15.87% in 2009 by closing over 80 winning positions.
My total 2010 portfolio was up 19.01% while the Dow only went from 10,000 to 11,500.
And I’ve done it by spending eight hours a day in front of two screens — as well as countless trips abroad for further investigation — finding gems like Canadian Zinc.
Your Turn
I know something else about Canadian Zinc…
Environmental approval wasn’t the only permit needed, though it was enough to send the stock higher.
Next, the decision goes to the Federal Minister of Aboriginal Affairs and Northern Development, who either accepts or rejects the environmental approval. He has ten business days to do so.
Today is day nine.
If approved (and I think it will be), the project then moves to the regulatory phase managed by the Mackenzie Valley Land and Water Board, with input from territorial and federal agencies for final permitting and licensing (I mentioned the bureaucracy.)
Because this was already an existing mine, the company could be a major producer of silver and zinc very quickly.
Internationally recognized metal analyst Greg McCoach has written that once the permit is received:
[…] this stock could be $10 to $20 very quickly. Remember, this is not an exploration play; this is a story that could be a major producer of silver and zinc within six months of receiving the final permitting.
You don’t see too many situations like this; it is very unique.
The measured and indicated resource is capable of supporting a mine life in excess of 10 years at the planned 1,000-tonne-per-day mining rate. With the inferred numbers, you easily have a mine life of over 20 years and still have plenty of extra exploration upside potential.
I like the odds and the potential payoff.
And I’d be buying shares of Canadian Zinc (TSX: CZN)(OTC: CZICF) ahead of that looming decision — just like I did back in October.
Call it like you see it,
Nick Hodge
@nickchodge on TwitterNick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street’s Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor’s page.
