STOCK PROFILE - Breakwater Resources Ltd. - Nov. 8/06; 

Breakwater Resources Ltd. is a Canadian Zinc-Copper-Lead-Gold-Silver mining company... it's head office is located in Toronto, Canada... shares of the company trade on the Toronto Stock Exchange under the symbol "BWR" (Yahoo Finance Quote: BWR.TO)

Recently inventory levels of Zinc on the LME (London Metals Exchange) passed under the important 100,000 ton mark, it's lowest level in well over a decade... in fact, current LME Zinc inventory levels only account for approx. just less than 4 days of world-wide consumption, some analysts are now arguing that current Zinc levels are approaching critical levels.

Many Zinc analysts also predict that the demand for Zinc will outpace the ability of the mining industry to keep up with corresponding supply, as large lag times exist in increasing supply due to under investment/development in the Zinc mining industry for the past many years.

And unlike Copper (where supply/demand is linked to the housing sector) Zinc is used in many applications outside of housing... Zinc is an ingredient for a wide range of products... so even if the current US housing market correction slightly softens world-wide demand on other commodities like Copper; Zinc has its own unique set of supply/demand fundamentals.

BWR is currently in the enviable position of being a real "producing" Zinc mining company... the company is not merely just a "exploration" or "development" mining company... and this is a very important distinction to make, because statistically; less than 1 in 1,000 mining exploration projects ever make it to the true "production" stage.

BWR currently operates 3 Zinc mines... and has an expansion planned to include a 4th Zinc mine in approx. mid-2007... BWR also produces (in lower quantities) Copper, Lead, Silver, and Gold.

As the LME Zinc inventory approaches critically low levels (a trend unlikely to reverse in the short-term, IMO) I expect more and more Investors, Speculators, and Momentum Traders will eventually become aware of the pending Zinc inventory crisis... and after studying public Zinc companies, IMO, many will be attracted to BWR as a proxy Zinc investment due to it's appealing features, such as; 3 existing Zinc mines, plans for a 4th Zinc mine, and strong cash-flow, in fact, I wouldn't be at all surprised to see BWR the subject of a take-over by a major mining company in the not to distant future.

Also, for investors who wish to invest in Zinc penny stocks, there simply aren't many "producing" companies available... and while there are a small handful of Zinc companies available for a lower price per-share than BWR, most have no current Zinc production... and consistent Zinc production from most of the non-producing Zinc penny stocks are still years away, and thus carry a very high degree of investment risk.

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