Here is the Mining News Newsletter with some interesting information.
Mining Stock News (printed newsletter OnLine (e-mail edition) are published 24 times yearly, on the 1st and I5th of each month.
**Insight Into Metals Markets & Mining Stocks For Intelligent Investors**
July 15, 1999
Table of Contents:
1. M~SN Outlook & Updates
2. MSN Feature Company Profile: Orex Gold Mines Corp. (OTCBB: ORXX]
3. Metals Research: Gold Analysis
4. MSN Events
1. MSN Outlook & Updates
We are excited to announce that our recommendation to begin accumulating select mining issues in our June 1st update has shown profitable results. The stock prices of the major gold producers seem to be forecasting a recovery in the precious metal for the 2nd half of the year · even though gold prices have dropped 10% in the first six months of 1999 to a twenty-year low.
Our biggest gainers (NEM & A~X), are the top two gold producers in North America.
Newmont Mining (NEM) gained 15% with its 3-point jump from $1E 1/2 to $19 1/2 while Barrick Gold (ABX) rose 3 1/2 points from $16 to $19 1/2 for a 22% advance.
Placer Dome's [PDG) i 1/2 point move to $11 3/4 was equal to a 15% rise and Agnico Eagle (AEM) managed a strong spike of 24% from $5 1/16 to $6 1/q. Even with the mild pullback last week, we are still ahead in our portfolio. The recent trading activity is evidence that this sector is in play and we are accumulating on dips.
These are nice gains from a depressed group, coming back to life in Just Six weeks. These issues are and have been under heavy accumulating by specialists and floor traders. The good news is with most "metals buyers" on the sidelines at the start of move, the trend haven't seen anything positive from NEM since mid-October '98, but its shares erupted from $13 to $30 between September 4th and October 9th of the same year.
A major score was achieved by our subscribers in the copper market and in the shares of the largest US producer, Phelps Dodge (PU). While copper prices slumped last month to a 12 year low forcing major producers to cut production, our PD recommendation has netted 27% as shares rose from $51 to $65. Copper futures have recovered somewhat from .60 cents to .75 cents per pound on the COMEX. The highlight of the year so far has been the largest single gain in copper futures for one trading session An 28 years on June 30th. More strength is expected in this area with the continued growth in the housing end automobile markets and further production cuts to eliminate a world glut of copper.
2. MSN Feature Company Profile
MSN continuously researches and investigates the mining industry and mining related stocks in order to reveal undervalued or special situations. Our features in the past have always been mining companies where we have been impressed with their properties, reserves, production, or some other aspect of their mining operation. So it is safe to say that today's feature we are adding to our "Ones to Watch in 1999" group of mining companies is our most unusual but perhaps most magnificent of all. This company is without all the typical characteristics but we feel that it has the capability to completely revolutionize the mining industry with their gold extraction process.
we were first introduced to Orex Gold Mines Corp. (OTCBS: ORXX) via an article in
"Business Week" magazine (April 19, 1999; page 156; "Developments to Watch" section) and could hardly believe our eyes. The article focused on the use of cyanide being banned for extracting gold from ore in Montana, which we were well aware of. The toxic nature of cyanide is environmentally cruel, but "Business Week" had uncovered a safe, viable solution.
The article went on to state that the Orex process is "environmentally friendly, non-toxic, and that "independent tests show that it extracts more gold, faster than cyanide does.- You could imagine our excitement as we set out to investigate further.
Using 'Business Week's" information that the harmless solvent is referred to as the Haber Gold Process (HGP), MSN was able to discover that Orex has been granted a license for the right to be the first company in the world to commercially use the ~GP for mining operations. This license was obtained from Haber, Inc. (OTCBB: HABE) for a fee of 600,000 restricted Orex shares. Haber's acceptance of restricted, non-tradable shares is the perfect evidence that they have confidence in their product and in Orex.
Reviewing Orex's news releases indicates that they have the financing and the contacts
Haber lacked to secure sizable gold processing deals. You can check out the Orex news stories here: httP://~lote.yahoo.com/q?s~ORXX&d=5d.
Considering =hat other major m/ning states (AK, AZ, CO, NM, OR], have also either banned or placed restrictions on using the cyanide method, Orex should be in line to cash-in on an abundance of stockpiled gold ore which has already been maned and is now ready for the extraction process. A recent Orex press release refers to several projects now in the works and of the overwhelming interest and proposals now being reviewed from mining companies worldwide. These facts seem to tie in with 'Business Week's" comment from Orex's President that HGP extraction is expected to began at an existing goldmine this summer.
It's no secret that there is a heightened sense of global environmental awareness. The devastation caused by the use of cyanide leaching to dissolve gold from ore is finally being addressed as the equivalent of dumping toxic waste on Mother earth. The Haber Gold Process is EPA approved and has passed the California Department of Health Services Acute Aquatic Bioessay and Toxic Metals Leach Analysis to qualify as non-toxic.
We strongly feel that the majority of ore processing deals entered into by Orex will be highly profitably joint ventures that could also include the merging or acquiring of their gold mining partner. Further, MSN has reviewed the stats proving that the HGP extracts a greater percentage of gold from ore and in much less time than with cyanide extraction. Additionally, the cost per ton of concentrate for :he HGP solution is about 85% less than the cost per ton of cyanide.
The strong union between Orex and Haber has created a dual stock play. The inventor of the RGP, Norman Haber, an accomplished chemist, scientist, and engineer, sits on the Orex Board as a Technical Advisor.
Although Orex has traded publicly for only a few months, they have already begun the process of becoming a fully reporting company. Orex is in the early stages of gaining national attention as we have found several other write-ups, specifically, "Mining Stock
Digest' (April '99) and "Financial Sentinel" (Hay/June '99).
Obviously, its only a ma~tar of time before Orex Gold Mines Corp. gets the attention it deserves from both the mining and investment communities. We will be providing updates on Orex when available, but until then, consult with your financial professional before investing.
3. Metals Research: Gold Analysis
We have stayed away from gold and mining stocks as a group for quite some time, mostly focusing our attention on certain select plays or special situations. Our feeling is that now is the perfect time to take gold seriously once again.
It would not be a surprise to us if gold would "quietly" be the big winner as we cross over into a new millennium. There is more to it than just the psychological effects of Y2K making gold a calming and stabilizing force for those who are hedging their wealth as a precaution. There will certainly be a flight to gold as we watch to see if the “World Wide Web” crashes while we protect our "world wide wealth.”
Even though interest rat s won't jump dramatically, it is likely that several rate hikes are coming. If rates are one-half point higher (.5%) by year-end, how will that affect stock prices in a market that is obviously not as robust as we've seen? Sure, these are all opinions, and sensible ones at that.
Now for the FACTS...
The World Gold Council (W~C) reports that annual demand for gold is approximately 4,000 tonnes while annual new production of gold is about 2,500 tonnes. Adding on the 600 tonnes of Scrap gold recovered each year brings the available real gold total to 3,100 tonnes, still well short of worldwide annual demand. With record levels in the 4th quarter of '98, there is surely no excess supply of newly mined gold to the market.
Which brings us to where the excess supply has been coming from in an attempt to keep gold prices artificially low. World Governments have been large on-balance sellers of their gold reserves at the continued urging of US monetary and financial authorities. This is part of a US plan to cause these nations to become more dependent on the US dollar and other fiat currencies as a higher percentage of their portfolio reserves.
What is interesting of late has been the failure of gold to continue to decline in value even as more governments have called for its sale. With the price of gold now threatening to rise above the 200-day moving average, things seem to be looking up for gold.
RECOMMENDATION: ACCUMULATE
4. MSN Events
Mining Stock News will be interviewed live on CNBC this month :o discuss our strategies for metals trading and our opinion on Orex Gold Mines Corp. We will send out a bulletin when we have locked in a date and time so you may tune in. CNBC has proven to be a healthy forum with regard to stock Performance. Following a "Business Week" article, Hauppauge Digital (NASD: HAUP) was discussed on CNBC, Friday, May 21st , with the stock at $12. By Monday, May 24th, the stock had exploded to $38 on two-day volume of 41 Million shares!
MSN will be present at the "Metals & Mining Stock Investment Seminar" in Anaheim (8/6-8/8) and An Seattle (8/13-8/15). Hope to see you there.
Sincerely,
MSN
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