David Pescod's Late Edition December 16, 2005
Note: Today's issue contains a graph that is worth seeing. You can send an email to sandra_wicks@canaccord.com asking for the 12/16/05 edition. While you are at it, why not ask to be added to their email distribution.
GREAT PLAINS EXPLORATION (T-GPX) $2.48 +0.02
CONNACHER OIL & GAS (T-CLL) $3.89 +0.13
RIDER RESOURCES (T-RRZ) $21.05 -0.36
We are fans of the work done by Peter Knapp and his team at Iradesso Research. Some of the quarterly reports they have put out looking at publicly traded oil and gas companies, is done in such a way that the average retail investor/speculator has a pretty good look at a company just from the charts that they have published. It does not have any of that confusing language that goes with so many research reports, these days, and all this information is yours for free! So how does Iradesso make a buck at a time like this? Well, they do public relations for some of the companies that might be enclosed, but if you got a little time on your hands, you might want to go to their website at www.iradesso.com and get a free sample. I am sure, it is going to give you a new prospective on some of the junior oil and gas stocks that you might own, it’s worth the exercise.
It was back on June 29, 2005 that we featured Peter and his three picks, in our Late Edition, and at that time his picks were the following. His number one was Diamond Tree (which is up 108%), his number two was Rival Energy (which is up 142%), and his number three pick was Diaz Resources (which is up 46%). That is pretty good in a market that has recently had some bumps! So we ask him the obvious question, “what do you like now, if you could only buy one stock?” GPX is the stock symbol and Great Plains Exploration is the stock, he says, and it is run by Stephen Gibson who has a history in the oil and gas patch. Steve did have some trouble with Probe Exploration when oil prices dropped out of sight, but he has also successfully run Rider Resources and some other companies of note as well.
“Currently GPX has some of the best net backs you can find in the industry” he says, “and they also have some of the lowest cost per share per flowing barrel of production.” He also suggests that “they also have a very aggressive drilling program and should it deliver, they could come up with some exceptional numbers”.
What we find interesting, though, is that Knapp and his team do have a relationship with Connacher Oil & Gas. They are a paying customer that gets some public relations work done by Iradesso. But so what! If we mention that there might be conflicts of interest, we still ask Peter, “what do you think Connacher can do over the next year?” He confidently suggests that “Gusella is building a big company” and that he thinks that so far they are delivering the goods. The big question is, how many Pods in the Great Divide have the reserves? “What’s the biggest thing to worry about on Connacher”, we ask, as we are big shareholders and so are many of our clients?” Knapp says that you have got to be watching the price of oil closely, because Connacher like many heavy oil producers are very leveraged to any drop in the price of oil, as heavy oil producers are amongst the higher cost producers.
Given Peter’s reputation, today we buy a bunch of Great Plains and hope he’s as good with this pick as he was with some others in the past. For those with a little time on their hands, we really suggest you take a look at the charts and work that they produce at Iradesso Research. It will be worth your while.
*BRAZMIN CORP. (T-BZM) $1.80 +0.03
We’ve written up BrazMin eight times in the last four months, so you know we like it and own a bunch. Of the thousands of junior mining explorers out there you know only a handful have the potential or the properties to make some dreams come true and this is one we are counting on.
But this was supposed to be its quiet time. Hey, it’s the rainy season in Brazil and you wouldn’t expect much to be going on, so just how come Jim Mustard (the analyst with Haywood Securities) BrazMin has already met your target of $1.90 in a month instead of 12 months and what are you going to do about it next?
Well, you wouldn’t expect an analyst to apologize for getting his targets right and erring on the side that he has, and you can tell from his voice that Mustard is not about to change his target just yet, but you get the inkling that he is looking forward to the time that he can. The rainy season is just starting and it will be April before people are at work, because of the monsoons in the Brazilian jungles.
Mustard just simply points to the companies assets and suggests it’s not only one or two projects they have, but three that he thinks have a legitimate shot of becoming something commercial.
The Sao Jorge which they are drilling now, has released so far 42 of the 48 holes and he suggests that while they develop their economic model, he wouldn’t be surprised the number of ounces might be a tad lower than some people expect. He suggests the model they develop, could have a richer grade.
Meanwhile he points to the Agua Branca which he has big hopes for, and points to the work that all the garimpios are doing in the area and suggests he has high hopes for this project when they finally get to work on it. It’s a vast area that has never really been examined and only two holes have ever been put into this area and it’s a big chunk of land that features a wide distribution of mineral components.
One thing also helping the price of the stock he suggests has been the big move in gold of late, which can move valuations up smartly.
So okay Mr. Mustard (it’s a Mister now that his story which he first wrote up as a feature in his 20-page is still probably the industry model) what can you do for us next? Is there a new story out there that a person looking for a chance to make a buck should be looking at? He suggests that if you are not afraid of going into the wilds of Africa—Senegal to be exact, that maybe a person should be looking at Oromin Resources (V-OLE).
They are in the area where Mineral Deposits Limited out of Australia has come out with some very interesting drilling results and suggests that the experienced management of Oromin led by Chet Idziszek and Nell Dragovan, have some very interesting targets with all the right geochem, mapping and the like. What we find interesting on this particular play is that he does not have a target.
Disclosure: BrazMin Corp: Canaccord Capital covers this stock and has a Speculative Buy rating on it. (Speculative buy: Stocks bear significantly higher risk
that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss.)
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