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http://ymlp300.net/zjM3Fc ——————————————————————————– February 19, 2013 Penny Stock Profile ….
(OTCQB: LSTS) For complete profile, CLICK HERE: (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp).
“CEO William Farley previously served as Chairman and CEO of Farley, Inc. and Fruit of the Loom, Inc. where he built the company from a$500 million domestic underwear company to an international company with $2.3 billion annually in sales before it was acquired by Warren Buffett’s Berkshire Hathaway.” Company Profile (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp) Quote & News (http://app.quotemedia.com/quotetools/clientForwardtargetURL=http://www.baystreet.ca/quotedata/partners/allpennystocks/quotes.asp&action=showDetailedQuote&symbol=LSTS) LSTS Profile Governments across the globe are clamping down on mining activities that are polluting the environment. Yes, regulations have been in place for decades, but often times ignored or not closely enough monitored. Before a greater environmental consciousness, mining operations certainly paid even less attention to the impact of tailings ponds. Tailings, or piles of waste material left over after rocks are shaken, tumbled or crushed and washed to separate the rock from the mineral at a processing plant, are a major concern as they often contain deadly poisons, many times cyanide.
The good news for the environment is that experts agree that the tailings can be cleaned through advanced technologies today to remove the remaining water trapped in tailings and not only clean it, but make it safe for continued use in mining operations.
The good news for companies in the mining business is that there’s plenty of money left in the tailings.
Chile is a primary country of focus with respect to tailings, particular tailings from copper mining. The reasons are multi-fold.
For starters, Chile is the world’s top producer of copper. In 2010, state-owned mining giant Codelco produced about 1.76 million metric tons of refined copper on its own, more than 10 percent of the world’s output. In 2009, the country as a whole produced 5.4 million metric tons of copper. Five of the six largest copper producing companies in the world have a presence in Chile. BHP Billiton Ltd (NYSE:BHP) and Rio Tinto Group (NYSE:RIO) have 57.5% and 30% stakes, respectively, in Minera Escondida, the world’s biggest copper producing mine, located in the Atacama Desert in Chile.
The second reason that Chile is on “tailings radar” is because of the prolific nature of copper mining for centuries, a large number of mines have been abandoned, leaving behind an exorbitant amount of tailings that must be dealt with. Companies with the technology and the resources are in an enviable position to capitalize on this situation because each one of those tailings piles contains mineralization that was left behind that can be used for a variety of applications.
It’s important to note that older mining technologies were simply not efficient, so tailings that were left behind that employed those arcane methods can be loaded with large percentages of copper and potentially other minerals.
While some companies look at the mineralization in tailings for metals in the traditional sense of copper used in construction, cars, etc., there is an extremely lucrative market in utilizing the mineral extract for copper sulfate, a value-added product derived from copper ore, which most people aren’t aware of.
A company already in the space and poised to transition into a revenue-generating machine is Lustros Inc. (OTCQB:LSTS), a California-based junior that through its 100-percent owned subsidiary Lustros Chile Spa, holds a majority equity position (60%) in Sulfatos Chile SA, which owns the Anica Copper Mines as well as a copper sulfate production project. Lustros also has an 80 percent stake in Mineraltus SA, the company’s subsidiary that uses its state-of-the-art, patent pending technology to extract copper from the tailings of expired copper mines to secure the raw materials to manufacture high quality, feed-grade copper sulfate.
At Lustro’s 1,325-hectare Anica mine, preliminary drilling indicates 3 million tons of resources with a copper concentration of 1 percent to 3 percent.
Lustros is not only setting its sights on the mine that it owns which can produce copper and other metals in the traditional sense, but also on the more than 800 mines in Chile which have been closed, including more than 400 that have been abandoned. Further, the expansive copper mining efforts mentioned by the majors above, combined with smaller mining endeavors generate a whopping 280 million tons of new tailings annually. This creates a virtually endless supply of tailings that can have copper extracted at significant margins for Lustros while also cleaning-up the environment.
The initial tailings operation of Mineraltus is a fully permitted project consisting of 80.4 hectares of land with approximately 2.4 million tons of copper tailings. After the clean-up, Lustros retains 21.2 hectares of usable land in the Santiago metropolitan area for real estate development projects.
The estimated revenue for Mineraltus is $69 million over by 2020, with a stellar EBITDA or $36 million.
As mentioned, governments are far more proactive than ever before.
Chile has recently passed a law mandating all mines have an exit plan, including treatment of tailings. Companies like Lustros stand to profit handsomely because not only can they retrieve all the minerals in the tailings, but they can also charge the owners of the mines, albeit state-owned or private, for the clean-up.
Copper Sulfate, or CuSO4, is one of the most flexible and reliable tools for the agriculture industry as a chemical used to treat a variety of problems, including prevention of E.coli and listeria as well as a natural growth stimulant in animals. These products are referred to as “food-grade copper sulfate,” and they are seeing rapidly growing demand that is outstripping supply.
Currently, the food-grade copper sulfate industry is valued at $1.2 billion and is growing at about 15 percent annually.
The current standards of production of feed-grade copper sulfate by many others in the industry have not only been heavily scrutinized, but now are being flat-out rejected. This is because others produce the product from copper scrap that contains toxins, such as cancer-causing dioxins generated in the original smelting and metal production of copper. Canada, Australia and Brazil have already banned feed-grade copper sulfate produced from scrap copper and it is likely that other large countries will soon follow.
Lustros, on the other hand, produces their copper sulfate from mineral-rich ore which is a far superior – and legal –product; explaining why the company says it is receiving strong interest from leading countries like Brazil, Canada, Columbia, New Zealand, Chile and Peru for their feed-grade copper sulfate.
In fact, the demand may already outpace the supply capacity that Lustros has at this point and that’s not a bad problem, considering Lustros already has plans for expansion. The company’s current facility is slated to be on line and processing 5,000 tons of material per month by the end of March. Capacity can increase to 15,000 tons per month upon permits for unlimited capacity by the end of the year.
Cash flow from the first phase of operations starting in the first quarter should allow the company to complete a new 25,000-ton per month facility; bringing total capacity to 40,000 tons per month by the start of 2014.
If the business model isn’t impressive enough all on its own, the management team that is behind the company is like“icing on the cake.” Chief Executive Officer William Farley previously served as Chairman and CEO of Farley, Inc. and Fruit of the Loom, Inc. (FTL) from the time he acquired the company in 1986 through December 1999.
When he started with FTL, it was basically a $500 million domestic underwear company, but by the time Farley was done, it was an international company doing about $2.3 billion annually in sales. In 2002, Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A)bought FTL for approximately $1 billion. For brevity’s sake, without going into great detail about the rest of the management team and directors, suffice it to say that Lustros has assembled a top-notch team with decades of highly relevant and senior-level experience covering the mining, corporate, finance and public sectors.
The company has an acute business model delineating the growth potential given several scenarios from operating with current revenue streams to modest capital raises of up to$40 million that will facilitate rapid production expansion to meet demand. At the company’s current market capitalization of an arguable undervalued point of $49.5 million, the “limited growth” projections show a five-fold increase based upon measurable data to $250 million valuation by the end of 2014. At the high end (with a $40 million raise), the market capitalization mushrooms to $734 million at the end of 2014.
Given the management teams history of success, potential investors would be wise to relent and examine the potential very closely.
(Tech Analysis Chart: http://www.allpennystocks.com/images/Tech_Analysis_Charts/tech_analysis_chart_V_LXV_feb_19_2013.png) Technically speaking, the Lustros chart looks to have found a bottom when it bounced off of lows at 32 cents last week. That mark held as a new bottom support, springing upward off it each time it hit it before making a stronger move to climb back over 55 cents. After a one-day pause, the stock price continued to rise to 70 cents on an increase in volume, lending further credence to the stock finding a bottom and traders seeing it as a buying opportunity. On any pullback, the 55 cent mark should serve as a new area of support. Resistance enters the chart around 80 cents, which was an area of support in the past (technical analysis rules says support become resistance once broken).
Further, the 50 day moving average is moving down on that point and will add dynamic resistance. Above that, however, a stronger resistance doesn’t surface until a nearly 50 percent climb to the $1 mark.
With the recent share price appreciation, key indicators are showing a definite shift in trend and momentum. The Relative Strength Index, or RSI, has climbed from oversold territory to a reading of 50.
Technical traders view the 50 mark as a barometer of bullish momentum, with levels above 50 indicating that the bulls are in control and vice-versa for readings below. The recent uptrend in the RSI shows that the momentum is building and is reinforced by the Full Stochastics, or STO, which has made a sharp move upward over the past week. Similar to the RSI, the STO breaking through 50 into the upper half of the indicators represents bullish momentum in the chart. Used in combination with support and resistance levels, traders will be looking for both of these momentum guides to hold above 50.
The Moving Average Convergence/Divergence, or MACD, just dropped a bullish cross last week with the 12 EMA passing through the 26 EMA.
This is a key sign for a potential shift in overall trend for the LSTS chart. The MACD is still in an overall downtrend and will be closely watched for continuation of the bullish cross to break that trend and start rising towards zero. A move above -0.05 in the MACD should denote a major shift and reinforce the idea that the stock price has found a bottom and is now ready to continue on an upward path.
While the chart is making the move, stop losses around 55 cents would be considered a wise move, depending on a trader’s risk tolerance.
As we always mention at this point, this is merely AllPennyStocks.com`s interpretation of the stock chart and we encourage all investors to consult with a qualified financial advisor before making any investment decisions.
Lustros appears to have positioned itself in a niche market in the biggest copper-producing country in the world. Demand plainly outstrips supply, giving the company exponential headroom for growth in the short term. It’s rare when a company is in a position to grow as quickly as they possibly can with no concerns about outgrowing consumer demand. The management has the team in place, the subsidiaries in place and the properties in their portfolio to make it happen. Still undervalued and flying under the radar of the general investment community, our examination of the company is the reason that we at AllPennyStocks.com have decided to turn our latest US spotlight on Lustros Inc. (OTCQB:LSTS) and encourage our members to immediately begin their due diligence and add the company to their watchlists.
As always, more information on the Company can be found on AllPennyStocks.com, or by clicking here: (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp).
INVESTMENT HIGHLIGHTS * Majority Stake in Subsidiaries. Lustros Inc.’s 100-percent owned subsidiary, Lustros Chile Spa, holds a majority equity position in Sulfatos Chile SA, which owns the Anica Copper Mines as well as a copper sulfate production project. Lustros also has an 80 percent stake in Mineraltus SA, the company’s subsidiary that uses its state-of-the-art, patent pending technology to manufacture high quality, feed-grade copper sulfate.
* A Mine of Their Own. Preliminary drilling at Lustro’s 1,325-hectare Anica mine indicates 3 million tons of resources with a copper concentration of 1 percent to 3 percent.
* Growing Industry. Currently, the food-grade copper sulfate industry is valued at $1.2 billion and growing at about 15 percent annually.
* Government Mandates Support Growth. Chile has recently passed a law mandating all mines have an exit plan, including treatment of tailings. Companies like Lustros stand to profit handsomely because not only can they retrieve all the minerals in the tailings, but they can also charge the owners of the mines, albeit state-owned or private, for the clean-up.
* Additional Regulation Supports Growth. Lustros produces their feed-grade copper sulfate from high-grade ore, the purest material providing a superior product. Canada, Australia and Brazil have already banned the use of feed-grade copper sulfate derived from scrap metal, a common production source for companies today, opening the door for Lustros to acquire those customers with their fully-approved product.
* Unlimited Supply. More than 800 mines in Chile have been closed, including more than 400 that have been abandoned. Expansive copper mining efforts by companies of all sizes generate an additional 280 million tons of new tailings annually.
* Amazing Growth Potential. Management projections have the company’s market capitalization growing from a paltry $49.5 million currently to$250 million at the low end to as high as $734 million by the end of 2014.
OVERVIEW Lustros, Inc., through its Chilean subsidiaries, is in the business of copper mining and the manufacturing of food-grade copper sulfate.
Lustros has a majority equity position in Sulfatos Chile S.A., which owns the Anica Copper Mines as well as a copper sulfate production project and employs a highly experienced staff of mining professionals. Lustros, Inc.’s subsidiary Mineraltus SA is a Chilean corporation that extracts copper from the tailings (waste products) of expired copper mines to secure the raw materials to manufacture high quality, feed-grade copper sulfate.
Corporate Information * Exchange: OTCQB * Market Cap: 48.1 Million * Outstanding Shares: 70.6 Million * Price: $0.68 * 52 Week Low / High: $0.20 / $2.48 * Information As Of February 19, 2013 Useful Profile Links * Corporate Write-Up (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp) * Recent News & Press Releases (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp) * Management Team (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp) * Contact Information (http://www.allpennystocks.com/aps_us/company_spotlights/archives/lsts.asp) Forward Looking Statements This report includes forward-looking statements that reflect Lustros Inc. current expectations about its future results, performance, prospects and opportunities. Lustros Inc. has tried to identify these forward-looking statements by using words and phrases such as “may,” “will,” “expects,””anticipates,” “believes,” “intends,””estimates,” “plan,” “should,” “typical,””preliminary,” “we are confident” or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Lustros Inc.`s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company`s growth expectations and ongoing funding requirements, and specifically, the Company`s growth prospects with scalable customers, and those outlined above. Other risks include the Company`s limited operating history, the Company`s history of operating losses, consumers` acceptance, the Company`s use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company`s securities, the possible volatility of the Company`s stock price, the concentration of ownership, and the potential fluctuation in the Company`s operating results.
Disclaimer AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable.
For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company`s expectations and estimates.
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