This is an update on my speculative long term position play in MineCore (symbol: MCIO).  Please read the prior blog entry http://www.themoneyblogs.com/undergroundtrading/my.blog/mcio-possible-20-bagger-only-for-longer-term-speculation-players.html for my original thoughts.  Its also a good idea to familiarize yourself with the company.  They had a nice editorial in Equities magazine worth reading here http://www.minecore.com/investorrelations.html

Quick analysis of my thoughts on Minecore:

MCIO has sapphire, gold and ammolite properties worldwide as well as several revenue generating divisions integrated into their vertically integrated model.  My main interest is the 15,000 hectares of sapphire properties in Madagascar.  Their website gives access to the third party field reports. 

The significance of sapphires is their superior durability (2^nd hardest stone next to diamonds and 2040 celsius melting point vs 1414 for silicon) and conductivity (mixed with iridium an gallium nitrate has shown at least 70% efficiency for solar cell vs 15-20% industry rate using polysilicon).   The additional revenues that are harvested from their waste/surplus byproducts added to the original plan to sell the cut gemstones to the retail market.  All this is contingent upon financing to commence production, which the company is planning for in 2009.

Their strategy is to distribute their higher quality sapphires to the worldwide gemstone markets but also plan on harvesting their surplus and ‘waste’ sapphires to supply the semiconductor and solar cell markets.  Their waste is the 75% lost when a rough sapphire is cut into a piece of jewelry.  This means a 16 carat blue sapphire ends up being a 4 carat after cutting and polishing.  The other 12 carats can be salvaged to make natural sapphire wafers.  In addition, the sifters usually release rough stones under 4 millimeters but now they will be collected.  This adds up to an exponential increase in potential revenues and valuation.  It also makes MCIO a solar/tech play in addition to a mining/resources play.

MCIO has consolidated firmly between the 1.70 x 1.90 level for the past six trading days. It looks poised for the next leg up. I mentioned the weekly pup breakout possibility in my last blog entry.  The weekly pup is a POWERFUL breakout that requires the stochastics to cross back up with candle closes above the weekly 5 period simple moving average. 

This has triggered as well as a daily mini pup.  The $2 level is the key trigger.  I will be adding to my position near $2 breakout level.  Due to the thin nature of this stock, the spike can be dramatic.  The initial weekly upper bollinger bands indicate 2.51 but the overshoots can be as dramatic as spikes to 3-4 range.  My longer term target still remains in the 10-12+ range.  The float is razor thin so be aware of the spreads.  It’s a good idea to bid under $2 but be ready to enter if it breaks.  I plan on holding the majority of my position well into next year to let this play out.  It’s highly speculative and only pure risk capital should be even considered.  Good luck to us!