I hope you have had a good and prosperous summer, and I know it has been a few weeks since our last report! With the traditional slower time for the markets in the summer, and vacation time for both us, and the management of some of the companies we are following, it was difficult for us to get some “face time” with them. However, I believe that the first pick of the fall season will prove to be well worth the wait!

Do you know what metal has the highest melting point? Which metal is the most resistant to corrosion? Is used as a strengthening alloy in steel and is a major component of most pipelines and nuclear reactor tubing? ´This metal is also used to help clean the impurities from heavy oil. With all the infrastructure spending and stimulus money about to be put into play in a major way, on a global basis, this metal, and the companies that explore for it and produce it, should stand to gain quite handsomely.

I am talking about molybedenum. This metal had a high profile back in 2005 when the price hit $40 per pound. And the companies that were exploring for it and producing it did very well. A lot of those were copper plays, as “moly” is mostly a by-product of copper production, but nonetheless investors made a tidy profit. The price subsequently fell dramatically, as did most o the metal prices over the last couple of years. But a quick look over the last few months shows us that the price of moly in May of this year was about $7 per pound and is now currently at about $16+ per pound. What does this indicate? For one, that as global economies strive mightily to turn the corner in this recession, infrastructure spending is a large component of that recovery, and for that, they need metal. And lots of it. Molybedenum will be a significant part of the global recovery, and countries like China, Russia, Brazil and India will be the major buyers.

There are only a few pure moly producers, and the company I want to talk about is a pure moly explorer. That company is Velocity Minerals Ltd, VLC on the TSX. The company listed in May of 2008 and have two properties in northern BC. They just came out in August with a NI 43-101 compliant resource on one of their properties, Mt Haskin, that gives them almost 28 million lbs. of moly at 0.08 per cent. At today’s prices, and given that this would be an open pit operation should it get to the production stage, this estimate is fairly robust economically.

I met with management last week, both in their office and then for a round of golf, and found out some further information. Velocity has over $3.4M in the bank, and will be spending about $1M over the next few months combined on both properties. They will do some further drilling on

We believe, with a couple of caveats that moly prices remain stable or continue to advance, and that the stimulus money that is globally being injected into the world economy is put to the use intended, that moly companies, both producers and explorers, will perform well for investors. We believe that Velocity has the expertise to achieve its corporate objectives, and with an investment anywhere in the $0.17-$0.22 range, will provide investors an opportunity to trade out of their position in the $0.60 range within the next 6 months.