Wednesday, August 15, 2007

Bright Future For PGM Metals

The future of SWC all depends on the future of PGM metals, palladium and platinum. If the price of PGM metal continue to grow up, SWC will be making tons of money in the near future. I spend extensive time studying PGM and everything I know convinced me that the future of palladium and platinum is absolutely bright!

Every precious metal analysts have made bearish predictions of palladium price, not just recently, but for each of the past 4 years. They based their accessments on known supply/demand numbers, which says the Russians are massively dumping their government stockpile of palladium into the market and there is an over-supply, therefore the price must drop. But the fact speaks otherwise. Palladium price in the past 4 years nearly tripled as the Russians dump up to 2M ounces of palladium a year into the market, on top of 7M world mine production. So what does that tell you?

There is a strong hand in Switzerland, loading up every excessive ounces of palladium that the Russians dump. The strong hand kept loading for several years, driving up palladium price. Strong hand sees something that most people do not see. He sees the emerging applications which will make palladium HUGE in the near future. This is a determined strong hand, determined to make BIG MONEY in this.

What emerging applications? You might think about palladium jewelry. But that is only a small potato in comparison to what is really BIG. The real biggie is Fuel Cell applications. Any fuel cell, regardless of their design, MUST use palladium and platinum. There is no replacement.

We talk about hydrogen fuel cell vehicles, which is big but will be some time away. But the mobile fuel cell application is something way much more closer than you think. We are not talking about a few years down the road. We are talking about seeing real commercial product on the store shelfs, as early as later this year! We are talking about fuel cell battery for laptop computers, for your cell phones, for your digital camera and other mobile electronic devices.

The high energy density of fuel cells allow such mobile electronic devices to work several months at a time without having to recharge. And recharge is as simple as just replace a methane catridge in a few seconds!!! Imagine that! Who wouldn't want one? And it is coming to mass market as early as later this year!!! Do a web search of DMFC, Direct Methanol Fuel Cell. The Chinese are pursuing DMFC developments, among other international players, judged from this academic paper. The US DoT just ruled that laptops and cell phones powered by direct methanol fuel cell CAN BE carried onto an airplane, removing one of the obstacles for broad acceptance.

Of course mobile fuel cell will have very broad application in military equipments. It's life or death in battle fields, you can not afford to have your electronic devices run out of battery power at critical times. So fuel cell will see the fastes adaptation in military equipments!

According to some research, we expect the mobile fuel cell market to grow to 80 million unit per year by 2012. That will surely consume a lot of palladium and platinum! One of the best sites to check out news, articles and analysis of latest fuel cell development is Fuel Cell Today. The other is Fuel Cells Works.

The future of SWC is extremely bright. SWC clearly has bottomed in price. This is a rare opportunity for people to load up SWC at dirt cheap price. Don't let the opportunity slip away!

Update: Yahoo user Orsa Maggiore recently started a blog discussing PGM metals and SWC. He does a much more detailed analysis of stuffs. Please have a look at his blog site.


grant said...


A serious query.

You have effect two separate components for analysis;

*the market price for palladium
*the efficiency of the business

On the basis of an analysis of SWC as a producer, the financial statements indicate that the management of this company are either;


Thus, the analysis of the economics of palladium are a moot point currently.

Viz, palladium may very well become extremely valuable, that however does not automatically guarantee that SWC can capitalize on this outcome.

jog on

August 19, 2007 4:05 PM

*I left this message on the "MONEY SKATER blog

JJ2000426 said...


Welcome to the discussion. Of course it is natural for any one who first look at SWC and see they are not making much profit right now, and begin to wonder why, as the palladium price has grown up a lot from the $142 low in 2003. But it is unfair to directly jump into conclusion and accuse the management being dishonest or inefficient. Feel free to give the SWC management a call and talk about it. They are pretty straight forward and approacheable people, especially Greg Wing, the CFO.

The point is, palladium at low $300-ish per ounce, is still NOT a profitable price for a mainly palladium mine. You are talking about a mine grade of half an ounce per ton of hard rocks and recovery efficiency of about 75%.

How much would be the cost of digging one tons of very hard rocks from a hole a few miles down the ground, and then cook the rock to extract just half ounce of palladium, and refine it to 99.9% purity. Just think about it! And this half ounce now sells only $160. Of course that is not profitable. The south Africa mines are making tons of money because they are mainly platinum, which is several times more expensive. The cost is about the same but they make more money.

The point is as there is huge market demand and palladium price continue to be driven up, SWC will start to make big money once the price raises above the money making threshold, which is some where between $340 and $360 for palladium.

Look at PCU before 2003, same situation. They were not making money when copper was only $0.76. But look at where PCU is now today!

grant said...


Out of interest I ran an analysis on SWC dated August 7 2007

This link will take you to the analysis if you are interested.

Based on this analysis I came to the following conclusions regarding management;

That they are either;
*some combination thereof

Moving on to the initial comment that I left......

It would seem that you are providing an analysis of palladium rather than the company.

With a resource company, an analysis of both is required.

SWC as a business does not seem to pass the initial hurdle.

Thus an analysis of palladium seems premature at this point.

jog on

grant said...


Sorry my blogs spam catcher is turned up high.....caught your corrected.

jog on

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