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Third Purchase - MSQ - Mosquito Consolidated Gold Mines Limited

I did lots of research into the mining sector because of the fact that while I was researching companies listed in the Toronto Stock Exchange (TSX) and the Toronto Venture Exchange (for startups) it appeared to me as though a lot of companies listed were in the mining industry.


Of course there are plenty of other companies out there, but keeping in mind that I have little to no money in the first place, I have to stick to the cheapest ones. Shares that cost as little as a few cents each. Mining seemed to have the most variety of choice at that cost range.

Otherwise I would probably have never even considered the mining industry or sector since I have had no interest in it my entire life. In addition, I wanted to stick to Canadian companies.

After searching lots of different companies in the mining sector, I began to learn a little bit more about the mining industry -- and I mean a little -- and started to settle on a couple of companies.

After comparing a few, I finally chose a Canadian mining company called "Mosquito Consolodated Gold Mines" (MSQ). Their shares, at the time I chose to purchase them, were at just .63 cents each, well within my range so I purchased 600 of them!!!

Holy crap! Yeah, 600 shares! Sounds like a lot, but at only .63 cents each, I only had to use a total of $407 ($378 in shares + $29.00 commission to the bank). These commission fees are a good reason why you have to be careful not to buy, sell, buy, sell, at every up and down because those transaction fees add up and destroy your potential profit.


The name Mosquito Consolidated Gold Mines (ticker symbol 'MSQ') might make you think they are only focused on Gold mining. However they have several different properties which contain gold, molybdenum, copper and others. What caught my eye was not the Gold, even though at the time Gold prices were shooting through the roof, was the Molybdenum. I had no idea what that was. So I did more research and found out that basically, Molybdenum is a form of metal which has a high melting point, (takes a extreme heat to soften or melt it), is extremely hard (strengthens steel), and is also resistent to rust and corrosion making Molybdenum very valuable to the construction industry, and many other industries (car engine parts, and anything that needs really strong steels etc.). Molybdenum gets mixed with steel (alloyed) to make it stronger.

Mosquito, (a Canadian company) owns a property in the states they call CUMO which their drill tests have revealed contains somewhere in the neighbourood of 2 Billion Tonnes of Molybdenum! A HUGE deposit. To be more precise, I'll quote from their website below:

Current resource estimate consist of 1.3 Billion tons indicated and an additional 2.25 billion tons inferred of open-pit accessible multi-element mineralization, containing: in the indicated category 1.8 Billion pounds of 'moly' (molybdenum oxide), 2.1 Billion pounds of copper, 90.8 Million ounces of silver and 123.5 Million pounds of tungsten, with an additional, in the inferred category, 2.3 Billion pounds of 'moly' (molybdenum oxide), 3.3 Billion pounds of copper, 143.8 Million ounces of silver and 158.9 Million pounds of tungsten.  
http://www.mosquitogold.com/s/Cumo.asp?ReportID=144392

I wondered what "indicated" and "inferred" meant so by looking at WikiPedia I found the following:

Inferred Mineral Resource is that part of a mineral resource for which tonnage,grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological/or grade continuity. It is based on information gathered through appropriate techniques from location such as outcrops, trenches,pits, workings and drill holes which may be of of limited or uncertain quality and reliability.

Indicated resources are simply economic mineral occurrences that have been sampled (from locations such as outcrops, trenches, pits and drillholes) to a point where an estimate has been made, at a reasonable level of confidence, of their contained metal, grade, tonnage, shape, densities, physical characteristics[4].
 http://en.wikipedia.org/wiki/Mineral_resource_classification



Knowing there is going to be exponential growth in construction over the next 20 years in countries like China and India, I thought this might make a good investment since they need hard, strong and corrosion resistent steels.

Share price wise, it has been an exciting ride so far. Since I bought the shares, they have done nothing but go down. However, I'm not worried since I bought them thinking about the long term potential of this construction boom.

I also know that Mosquito has not yet begun digging the mine at CUMO. So this too tells me that I have to wait. Be patient and just wait.

After reading  a few books on investing, especially books on investing guru Warren Buffet, I learned that my own style of investing seems to be buy and hold ... and wait for it to grow... eventually. So that's what I did.

 I now own 600 Shares of Mosquito Consolodated Mines Limited and I feel good about it. I watch the press releases as they come out, every now and then I will continue to buy more shares as the price stays low, or even if it drops, I'll buy more to get a better deal with the potential for further growth should they go higher in the future. As always, keeping in mind the possibility that no matter what you invest in, it could all dissappear. So only invest money you are initially willing to burn. Depend on nothing, hope for the best :)

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