Portage Resources soars on Aggressive Acquisition Campaign
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    What’s behind the Portage Resources Trading Flurry

    What’s behind the Portage Resources Trading Flurry

    Shares of Portage Resources Inc. (OTC PK: POTG) soared more than 20% for the second day after the company completed the acquisition of two precious metals projects: Wukakuy and Lideros Properties in Peru. These assets expose the company to a significant resource of silver and gold, as well as to the escalating gold and silver prices. Silver is the best-performing precious metal so far this year, with prices up 9 %, while gold gained 5.4%.

    Portage shares commenced trading on pinksheets this month, rallying from $0.15 on June 13 till the current quote of $0.95 on acquisition news.

    Portage is focused on the exploration and production of precious and base metals in Peru, a country with a rich mining tradition and opportunities. Peru holds about 16% of the world’s known mineral reserves and is also known to have the largest silver reserves in the world. Many reserves have been exploited intensively in the past, however, to date only about 12% of Peru’s mineral resources have been worked. Accordingly, the country has the capacity to double the current levels of minerals output.

    The Wukakuy Property, totaling 600 hectares, was acquired in exchange for 20 million shares of POTG from Airon Peru S.A.C. The project has estimated potential reserves in excess of 58 million oz of silver. Based on today’s silver prices of nearly $35/oz, the reserve estimates have a potential value in excess of $2 billion. Given these estimates, the project provides an immense opportunity for the company to start an extensive drill program and establish mining operations in Peru.

    The second project, the Linderos #4 property was acquired in exchange of 10 million shares of Portage from Nilam Resources S.A. Based on data from Peruvian government, there are approximately 500,000  proven ounces of gold in the area of Linderos Project. Moreover, several independent studies evaluated that the project’s area could contain more than 1 million ounces of gold immediately near surface and the further drilling could significantly boost these estimates.

    The escalating gold and silver prices have kept precious metals stock soaring during the course of 2010 and 2011.  The uncertain economic environment has spurted the investment demand for silver and gold, pushing prices to record levels in 2011. Silver reached an all time record of $49.51/oz on April 28, and is currently trading around $35/oz, compared to approximately $19/oz one year ago. A number of analysts expect silver prices to range above $50/oz in the next two-three years.

    Gold prices have also ascended to record levels in 2011 hitting a record high of $1,575/oz last May. Since then, gold drifted back bellow $1,500/oz and is currently trading around $1,498/oz, compared to $1,244/oz one year ago. Analysts covering the market, expect the prices for gold to continue growing to reach $1,700 by the end of 2011.

    As the economy recovers, silver companies could further benefit from the rebirth of silver industrial demand, thanks to the emergence and growth of a number of new end uses in computer and consumer electronics. According to the Silver Institute, the silver supply increased modestly by 2% per year over the last decade to approximate 710 million ounces in 2010. Meanwhile, the modest rise in supply is not sufficient to cover the burgeoning fabrication demand, which rebounded strongly in 2010 and is poised to outstrip supply in 2011.

    The combination of strong investment and industrial demand could push silver prices to beat analyst’s estimations and set new records in the coming years. Portage is poised to benefit from strong industry’s fundamentals, despite the fact that it is in the early stage of exploration.

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    One Response

    1. I received at least 20 SPAM emails on this Stock POTG saying it would go up 500%. So it will probably drop just as FAST!

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