Hi griz,
Maybe BMD got the assay procedure fixed, and are getting consistent results now,...and perhaps the numbers are looking good. Canacrap certainly wants to buy, and they seem to love to runup stocks just before test results come out.
Last stuff from stockwatch. No gloating Chucka!(ggggggggggg)
Birch Mountain Resources Ltd BMD
Shares issued 27,777,790 1999-12-31 close $2.1
Friday Dec 31 1999
LETTER WRITER MAINTAINS SILENCE ON HIS TOP PERFORMER
by Stockwatch Business Reporter
Canadian precious metals explorer Birch Mountain Resources ended the year as John Kaiser's top performer in 1999. The stock finished the century at $2.10, up from 30 cents on Dec. 11, 1998, when he recommended it in his 1999 Bottom-Fishing Guide.
Birch Mountain's gain of 579 per cent helped advance Mr. Kaiser's 1999 portfolio 21.64 per cent for the year.
Birch Mountain came to dominate Mr. Kaiser's portfolio throughout most of the year, even though little news emerged from the company that would account for its stellar performance in an otherwise flat market. Mr. Kaiser was even less forthcoming about the company than was Birch Mountain itself. During the year he had nothing to say in print about his portfolio leader. (The letter writer has dropped it in his bottom-fishing list for 2000, but he rarely picks stocks that are much over a dollar.)
Stockwatch last reviewed Birch Mountain in September, when it led Mr. Kaiser's portfolio at $1.25. Even then it was a standout, given that his overall portfolio was off 2 per cent. Since then, the company has done a modest financing of 491,305 units at $1.15. In the Nov. 24 financing, each unit comprised one share and one warrant for half a share. Each whole warrant entitled the holder to purchase one share at $1.50 until Nov. 10, 2000.
There were three major placees -- G. Walter Loewenbaum (150,000 units), Daniel Tessler (125,000 units), Au Capital LP (86,957) -- and four others that shared the remaining 129,348 units. Between June, 1991, and May, 1995, Mr. Loewenbaum was a director of Nasdaq-listed 3-Systems (last $8-1/2 (U.S.)), a company in which Swiss financier Carlo Civelli was an early shareholder. More recently, Mr. Civelli attracted attention to Jordex Resources Inc. when he rejoined its board.
Au Capital, meanwhile, has a connection with uber-promoter Robert Friedland, who also has, or had, ties with Birch Mountain. In January, 1994, Au became a shareholder in brother Eric Friedland's Carson Gold Corp., which in October, 1996, became DiamondWorks Ltd. As a shareholder/promoter, Robert played a large role in DiamondWorks' affairs and in February, 1997, the stock reached its high of $2.95. That was shortly before revelations of adventures in Papua New Guinea involving South African mercenaries and a number of DiamondWorks employees and directors.
In October, 1995, Robert Friedland sold the company a property in West Kalimantan, Indonesia, and for this he acquired an option on 4.5 million Birch Mountain shares -- 23.2 per cent of the company -- in May, 1996.
When he recommended Birch Mountain, Mr. Kaiser was less than encouraging in his assessment of the company, calling the Prairie gold model "controversial." (Prairie gold is Birch Mountain's somewhat lonely search for precious metals in sedimentary formations where such metals are not believed common.) Also in his December report, Mr. Kaiser pointed out that the company's finances were low ($800,000 in working capital). Still, he said, the diamond potential of Birch Mountain's claims under option to Lytton Minerals Ltd. could help boost finances. (Lytton amalgamated with New Indigo Resources Inc. to form Tahera Corp. in March, 1999.) Few noteworthy developments on this front took place, however.
On July 16, 1999, president Douglas Rowe reviewed and analyzed the data collected on the model. He said the analysis of drill core and surface samples "conclusively prove the existence of anomalous quantities of gold, silver, platinum, palladium, and other precious and base metals and rocks from its Athabasca properties" in northeast Alberta.
Mr. Rowe cautioned, however, that testing of quantitative assay methods developed by the company and other parties "has not yet achieved the objective of developing a method for repeatable, statistically sound estimates of precious metal concentrations." Nevertheless, he said, the company "feels" that the variability in results "is related to control of certain process parameters that are now systematically being tested." He added, "Birch Mountain feels that gold, platinum and other precious metals are present in its Athabasca rocks."
Internet hypsters are fond of promoting the notion that the Prairie gold model could one day uncover a "Carlin-like" deposit deep below the surface.
Not surprisingly, little of this merited comment or discussion from California's baron of bottom fishing. Mr. Kaiser was, however, much more forthcoming about his second top performer, Corner Bay Minerals Inc., which closed on Friday at $2.80, up from his Dec. 11, 1998, buy price of 45 cents. He also liked it three times dating back to December, 1994, at prices all under a dollar. Corner Bay gained 503.5 per cent, making it the only other stock in his portfolio to top the 500-per-cent mark. (Five hundred per cent is a Holy Grail in bottom fishing; if enough stocks reach this level they will pull up the non-performers for an acceptable overall gain.)
In March this year, Corner Bay confirmed that it had a significant discovery at its Alamo Dorado silver prospect in Mexico. Mr. Kaiser had recommended the stock in December, 1998, in the hope of good results. The results were confirmed again in October. The stock moved too quickly for Mr. Kaiser to confidently issue another bottom-fishing buy tip, but he monitored Corner Bay's progress, making five subsequent comments on its affairs.
In one of his comments, in early December, Mr. Kaiser noted that a number of analysts have target prices for the deposit ranging from $4 to $7, but he cautions that for those numbers to hold, an upcoming metallurgical study must confirm silver recoveries of 65 per cent or better. A bulk sample is in Tucson, Ariz., being prepared for column leach tests, while further drilling is scheduled to take place by February.
At $2.80, the stock is near its closing high of $2.95 reached in November.
Mr. Kaiser's third best performer was one of the few resources-to-technology stocks on his list, Meteor Technologies Inc. It closed Friday at 59 cents, up from the Dec. 11, 1998, recommended price of 12 cents. The gain was 329.2 per cent. When he named Meteor to his portfolio, the company was an idle holdover from the Alberta diamond play, calling it a "dumpster stock." He recommended it once before, in December, 1997, at 29 cents, on the strength of strong management and exposure to Alberta diamonds. Whatever excitement surrounding the play was extinguished by the middle of 1998, however, and Meteor drifted to the two-cent level in September, 1998.
By June, 1999, Meteor's Internet plans were released and Mr. Kaiser recommended the stock as a strong buy at 15 cents. He said the deal with ThoughtShare, which was developing a revolutionary Internet browser plugin with Simon Fraser University, offered "extraordinary fundamental potential." The software allows users to store information about what sites they have visited and which ones they liked. The result amounted to a roadmap of the user's preferences. Most of the market was lukewarm to the plan in spite of the letter writer's constant reminders that Meteor was a silicon bottom-fish of the first order.
Then in mid-December, 1999, a U.S. company founded by a couple of ex-Netscape executives -- and which does the same kind of thing that ThoughtShare does -- began to gain a lot of media attention. Coverage of backflip.com sparked interest in Meteor, and the stock rose from 17 cents on Dec. 15 to its present level of 59 cents. Mr. Kaiser looked at what backflip.com had to offer and declared ThoughtShare superior; for one thing, backflip.com offers far less privacy and the bookmarks a user makes is used by backflip.com to target advertising. ThoughtShare, on the other hand, offers full privacy, which is a highly sought-after commodity in the world of the Internet. "Right now Meteor is developing into a momentum play driven by the ThoughtShare potential," Mr. Kaiser said on Dec. 19.
The negative side of Mr. Kaiser's portfolio was led by Lucero Resource Corp. (at 12 cents from 64 cents since Dec. 11, 1998, off 79.9 per cent). Lucero stayed with resources after moving out of Alberta diamonds but had less luck than former fellow diamond hunter Meteor. On Nov. 8, 1999, Mr. Kaiser wrote that Chilean-focused Lucero faces "death by dilution," over terms of the Macromin option agreement.
Second worst performer was Minera Andes Inc. (at 18 cents from 70 cents since Dec. 11, 1998, off 75 per cent). According to Mr. Kaiser, Minera failed to impress investors with its recent strategy of exploring in Romania. When Mr. Kaiser placed it on his list, Minera Andes was working in Argentina with $4-million in cash and a strong technical team.
Mr. Kaiser's third worst performer was Alberta diamond diehard New Claymore Resources Ltd. (at 15 cents from 55 cents since Dec. 11, 1998, off 73.5 per cent). Mr. Kaiser picked New Claymore as an "excellent hedge" on the diamond play, adding the company would survive no matter what. Mr. Kaiser did not comment on New Claymore's affairs during the year, but fellow letter writer Brian Fagan of The Fagan Report recommended selling the stock in November, saying the company was looking for a new deal.
Throughout 1999, Mr. Kaiser's portfolio had its ups and downs. Things began well enough, with a 12.3-per-cent gain by February, when Altoro Gold Corp. was the top performer. By March, Pacific Rim Mining Corp. was the standout, but the portfolio eased to a nine-per-cent gain. In April, Birch Mountain became the portfolio leader for the first time, and the 100 bottom fish gained 17.7 per cent overall. In May it was Aquest Minerals Corp.'s turn, leading a portfolio that gained 23.7 per cent -- a mark that would not be matched for the rest of the year. By June, when Birch Mountain reappeared as the leader, the portfolio had sagged back to a 14.5 per cent gain. In September, with Birch Mountain leading once more, the portfolio had returned minus two per cent.
Even though several stocks made strong gains in November and December to turn around the portfolio's performance, Mr. Kaiser is clearly unhappy with both the quality and number of his picks. This year for the first time since he established his bottom-fishing system of 100 picks in late 1994, Mr. Kaiser has not reviewed each one individually. Further, his new portfolio will comprise only 20 stocks and these may be added to or listings deleted as the year progresses. He envisions the list expanding to hundreds of listings, or very few covered only as spec-cycle holds. "In short, the mediocre performance of my last three annual bottom-fishing guides is forcing me back to the drawing board," he says in a Dec. 28 Bottom-Fishing Digest.
Among his stock selection and coverage methods are: a sectoral approach in which he will make the best picks for each sector; his preference for the bottom-fish chart pattern in picking stocks (i.e., no momentum plays); and a preference for juniors that score well on structure, people, capital, story, and valuation.
Mr. Kaiser's goal is focusing on stocks that show the greatest potential for gains of 500 per cent or more. "The lesson I learned from 1997 is not to get caught with low-quality inventory during a market downturn," he says.
(c) Copyright 2000 Canjex Publishing Ltd. canada-stockwatch.com |
