David Pescod's Late Edition February 23, 2006
NOVA URANIUM (V-NUC) $3.56 +0.04
PLAYFAIR MINING (V-PLY) $0.95 +0.01
WOLFDEN RESOURCES (T-WLF) $3.80 n/c
It’s probably getting a little scary. I swear, at cocktail parties
they are starting to talk about things such as the price of zinc, tungsten,
molybdenum and uranium. Who would have thought? But
obviously, people gravitate to whatever is hot and moving and let’s
face it, commodities have been. Even with the recent correction in
the junior resource sector, there are still pockets that are creating
excitement.
As we look at commodities, we note building inventories in copper
which suggests it may be near a peak, molybdenum prices have
dropped dramatically as production increases, but elsewhere it
looks like tungsten prices continue to go through the roof and with
zinc inventories dropping dramatically seemingly everyday, we
wouldn’t be surprised to see if after a correction, zinc start flying
again. This week we have yet another rise in the price of uranium
which steadily-eddily just keeps going up.
When you get to hot, there’s probably no one hotter these days
than Don Moore. The Vancouver Mining Man is the driving force
behind both Nova Uranium, just about to start drilling on their Mont
Laurier property in Quebec and Playfair Mining, which has put together
a package of very prospective tungsten plays that have
made him one of the most watched-guys in Vancouver mining circles
these days.
Don’t get the impression that he totally walks on water though.
There is always Rupert Resources to bring him back to reality.
Rupert Resources was the junior explorer looking for gold in the
Red Lake Camp which was trying to do it in a different way. They
were using new rig technology to drill from surface to depth almost
never drilled before of almost 6000 feet. The technology has
caused endless grief and they still don’t know what they have or
haven’t got on that play. What they do know is that they have a lot
lower stock price.
As to Nova Uranium, after the volume and the recent spike in the
stock, Don is more excited than ever. While he does have a bit of a
promotional side, he’s never given us a target on the play (unlike
Eric Coffin who has been quite bullish) and says simply that they
have labs lined up so that when they do start drilling, they’ll have a
very quick turn around.
Remember, this was drilled three decades ago and came up with some
rather significant results when people last cared about uranium prices.
So he suggests that within three weeks of the drills first turning,
they could have results on the first ten holes and one should know
then whether they are able to replicate results from three decades
ago...or not. Then he will give us a price target for the stock. That
would be about March 20, 06…..we’ll know if this is a hit or not…...
The one thing appealing to our sense of greed with NUC, is leverage.
It only has 17 million shares outstanding, so if they hit this
could be ultra-successful. Compare that to Paladin with 400 million
shares outstanding, UEX with 180 million shares outstanding…...
Meanwhile, being one of the more intriguing guys in the mining
industry these days, we ask him our favorite question. “If you
could only buy one mining stock today (other than your own and
not something that you are a director or otherwise have conflicts
in) what would it be?” And of course, we need at least a double!
Anything less than a double means that you owe us a bottle of
scotch (or a trip to Mexico).
Moore suggests Wolfden Resources and is quite confident about it.
With zinc/copper prices doing well and gold not doing so badly
either, he suggests that Wolfden’s recent deal to pick up the assets
of Inmet Mining Corp - the Northern Canadian zinc/copper projects,
plus having the gold assets in Red Lake camp and deciding to split
the company up means that the two smaller companies will probably
be worth more than the one larger company.
SHININGBANK ENERGY I.T. (T-SHN.UN) $24.62 -0.28
Matthew Simmons wrote a book on his theory that the world
is running out of oil, at least easy-to-find and cheap oil. It’s a
theory and over time is probably correct. The fact is though,
that we are awash in oil right now and we almost have a glut
of natural gas due to the warm winter. The bulls in the oil
and gas patch seem to be ignoring this fact. But those owning
income trusts might want to pay attention as the Financial
Post today features an article with the headline, “Price
Dip Could Sink Gas Trusts”. It quotes CIBC, which is concerned
about the low gas prices and has pushed a slew of
gas trusts into the “under-perform” category including Advantage
Energy Income, PrimeWest Energy, Shiningbank
Energy, Trilogy Energy Trust and True Energy Trust. Canaccord
recently issued some concerns also in an Income Trust
report and if you would like a copy, just-email Debbie at debbie_
lewis@canaccord.com. |
