New York, New York (PressExposure) March 21, 2012 -- Sasha Cekerevac, co-editor for online financial newsletter Penny Stock Detectives, believes that China's decision to limit the supply of the element tungsten in the world market will be a boon for the few tungsten stocks out there. In a recent Penny Stock Detectives article, Cekerevac argues that miners around the world that can now supply tungsten to the world will benefit greatly, as China supplied the world with roughly 85% of the supply of tungsten needed.
"When it comes to investing, tungsten stocks tend not to be mentioned in the same frequency as other junior mining companies," notes Cekerevac. "Part of the reason is that investors aren't aware of the variety of uses for tungsten. As the second-hardest substance after diamonds, tungsten's industrial usage is increasing substantially, including for drilling and cutting purposes. There are some very interesting junior mining companies that are penny stocks involved with tungsten extraction."
Cekerevac believes that Malaga Inc. is one of the more interesting tungsten stocks operating as one of several junior mining companies with intriguing future prospects. The company has properties in Peru with over 688 hectares in total area. Malaga recently raised its reserve and resource levels for its Pasto Bueno mine in Peru. This is always a good sign for junior mining companies, stresses Cekerevac. Considering there isn't a ton of tungsten stocks publicly traded, any increase in reserves is always a positive.
Given the news on the increase in reserves, this pushed up the price of Malaga, as it would with any of the tungsten stocks had they announced such good news. With the move up in price, Cekerevac recommends waiting for a slight pullback, as a common occurrence with penny stocks in general is that, when they move up to the 200-day moving average, they will encounter resistance.
Cekerevac says that, while China is by far the biggest supplier of tungsten to the market, one advantage for an investor in tungsten stocks looking at Malaga is that it is based in Peru, a country that is favorable for junior mining companies. Malaga produces approximately 10% of the tungsten for sale outside of China and, with this recent increase in reserve estimates, this market share is poised to grow. The market now needs this tungsten since China has limited its supply to the world markets.
Investors in penny stocks shouldn't avoid tungsten stocks simply because there aren't a lot of publicly traded companies available to invest in, insists Cekerevac. After a lot of research and due diligence, there are long-term possibilities for investors in tungsten stocks and other junior mining companies, as long as the investor understands the risks.
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