David Pescod's Late Edition December 19, 2005
*BREAKWATER RESOURCES (T-BWR) $0.50 n/c
We don’t know why in the past it has worked, but as we wrote up Breakwater back on October 5, but it seems if you stepped up to the plate and pick up some shares of Breakwater over the last three years, over September—October and rode them to March, you did quite well.
One thing helping this play these days, though, are the unheard prices for copper, as it is over $2.00 a pound. Breakwater is very leveraged to the price of zinc and zinc is also hitting numbers zinc producers have never seen before.
We wrote this up back on October 5th when Breakwater was $0.39 and we are actually a little surprised that it hasn’t done better with this huge run in commodity prices, but then the whole ideas was to get in, in September/October and out in March.
Breakwater has a great web site at www.breakwater.ca and it offers you an investor presentation to see what they got, which is basically three producing mines—the Bougrine mine in Tunisia, the El Mochito mine in Honduras and the El Toqui mine in Chile.
They also have the Myra Falls mine in British Columbia, which has been causing them a little grief over the last while and recently the operator was replaced. They are also spending almost $2 million a month getting the Langlois mine in Quebec up and running, which may mean something significant for their future.
Last year Breakwater’s mines produced 375 million pounds of zinc, 18 million pounds of copper, 32 million pounds of lead, 2 1/2 million ounces of silver and a smidgen of gold. So you know that this penny mining stock actually delivers something.
One of the reasons that it is so cheap is that they have almost 340 million shares outstanding. Meanwhile, what next for commodity prices? The chart to the left shows you the fundamentals for zinc right now, and with inventory heading down it looks pretty good. What’s changing is that Breakwater is expected to give investors some guidance as to what they should expect next from the company sometime in the first week in January. I suspect that when those numbers come out it is going to make or may not-make a significance difference to Breakwater’s share price, but we are still long and strong.
For a good look at the company, go to the web site at www.breakwater.ca. If you take a good look at the company’s long term chart, you will notice that they have things in their past history that won’t necessary warm up all investors hearts.
www.breakwater.ca
Breakwater Resources
Disclosure: *Breakwater Resources: Canaccord Capital covers this stock and has a Hold rating on it. (Hold: The stock is expected to generate riskadjusted returns of 0-10% during the next 12 months.)
It has been a very generous year for some of the gold stocks in the last few months and for the oil stocks through much of year, but it is also the time of year a person should spend a few minutes to look at their taxable situation. If you are in the venture market, there is probably no way you missed having a few junior mines that have simply not performed and maybe it’s time to grab the tax loss when it could do you some good. It’s a reminder that for Canadian tax payers the last day for tax loss selling for normal settlement will be December 23.
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*Hey folks it’s Christmas coming up, so don’t expect too much out of us this week. In the meantime, if you have any good Christmas jokes, Christmas sayings or Christmas stories, please send them off to us as we would love to print them this week.
Many thanks for all your help! |
