The Abundance Engineer April 2010 - Become A Farmer

Become A Farmer Dear Investors, Since I sent out my newsletter in December outlining the promising growth of Gold, Silver & Agricultural Commodities. Gold is up 4.5%. Silver is up 8%. Agricultural Commodities have fallen off about 5% making them even better value. To capitalize on the coming agricultural commodities boom there are various Commodity ETF's available RJA & DBA are two of the main ones or as Jim Rogers advises become a farmer.   Gold & Silver Last week I highlighted some ways of capitalizing on this commodities boom. While purchasing Gold & Silver outright are great ways of investing safely in the market there are other ways which are likely to produce a stronger return if you can handle a little more volatility. Mining companies like Barrick (ABX), Anglo Gold Ashanti and Goldcorp present excellent value at current prices. Recommended ETF's are (CEF) & (PHYS) Back in December I outlined how excited I was about silver as an investment. While the silver spot price has increased by 8% since then. There are again better ways to capitalize on the coming Silver price boom. My favorite silver play is a silver streaming company called Silver Wheaton (SLW). Silver Wheaton is up 24% since I highlighted Silver as an investment back in December.  From their company website :  Silver Wheaton is the largest metals streaming company in the world. The company currently has thirteen silver purchase agreements and two precious metals agreements where, in exchange for an upfront payment, it has the right to purchase all or a portion of the silver production, at a low fixed cost, from high-quality mines located in politically stable regions. The price that Silver Wheaton pays for future silver production is pre-determined in the agreements, typically US$3.90 per ounce with a small inflationary adjustment, which ensures costs are fixed. This allows Silver Wheaton to avoid variations in operating costs, reducing downside risk, while providing the upside of significant leverage to increases in the price of silver.  Other than the initial up-front payment, Silver Wheaton does not contribute to future capital expenditures or exploration costs invested by the mine, yet benefits from the production and exploration growth that results from these expenditures. This often translates into significant value creation for shareholders. A silver stream allows a mine operator that produces silver as a by-product, such as a base metal company, to monetize the value of its future, non-core silver production. Mine operators typically receive the upfront payment in the form of cash which can be used to continue growing their company, either through exploration, capital or production expansions, or by making acquisitions.  Alternatively, the proceeds can be used to strengthen their capital structure by paying down debt. In short, Silver Wheaton helps mining companies grow their businesses by offering a very attractive financing alternative over traditional sources of capital such as debt or equity. Current Silver Purchase Agreements Silver Wheaton pursues acquisitions that are accretive to shareholders and low-risk in terms of asset quality and political jurisdiction. To this end, the company currently has 13 long-term silver purchase agreements and two long-term precious metal purchase agreements with nine operating partners around the globe. These agreements cover 14 operating mines and five development stage projects, and are set out in more detail on their website. I'll be in touch next week with some more stock tips and additional ways to invest in the commodities markets. Sincerely, Robert McManus rob@theabundanceengineer.com www.theabundanceengineer.com