₪ David Pescod's Late Edition March 23, 2006
SHERWOOD COPPER (V-SWC) $3.65 +0.49
What’s great about the “Hard Rock Analyst” is that it is a junior
mining-centered letter that an experienced geologist will get
all the data he would need from, but the average punter who
doesn’t know graben from gravel can also, almost understand.
To us with the boom in the junior mining sector right now, it’s
mandatory reading and if you aren’t receiving it yet, maybe you
should. Go to www.hardrockanalyst.com and it will make it easier
for you to find out about subscribing.
What’s wrong about the letter is that when they have something
really, really, really exciting, they merely say “buy”. Every
once in a while, we need the Coffin’s to act like a Kerry Sully,
who kind of physically grabs you, drags you down and says,
“You absolutely must have this”. That’s what Sully did after a
COPIC Conference some time ago about Connacher Oil and Gas
(CLL) when it was yours for $0.70. There was no doubt we had
to have a bunch.
We bring this up now because of Sherwood Copper, one of the
stories that the Coffin Brothers were quite aggressive on and
definitely liked. On telephone conversations with the Brothers—
particularly Brother Dave, they were quite keen on this story and
its potential. (That’s why we featured their pick SWC back on
January 4 at a mere $1.42.)
For others and possibly even ourselves, of all the stories they
were talking about, something that’s way up north in the Yukon
where costs are high it might not have stood out like it should.
Obviously, we shouldn’t have had some of our preconception
concerns about the North Country as Sherwood Copper again
today, comes up with more assay results. Lately if it hasn’t been
for unbelievably good drilling results, they wouldn't have had
any results at all. Hole 06 SWC-68 was released today and had
220 meters of some nice stuff. But inside that, were some unbelievable
intervals. Fifteen meters of 2.7% copper, 2 grams gold
per ton and 10 grams silver. Another interval had 22 meters of
1.7% copper, 0.7 grams per ton gold and 5 grams silver.
When we talked to Bruce McLeod, one of the directors of the
company today, he suggests that “the key to this play has been
for some time, its exploration potential”.
There was historical drill holes in the area that showed it was
possible to find more, and geology and geochem was encouraging.
He suggests that based on these results, you are way too
early to arm-wave yet as to what kind of grades and tonnage you
can expect, but he suggests this shows that there is potential for
one or more Mintos to be found.
“How big and rich they are is open to debate, whether you are
going to find something with half a million tons or something that
could be 8 million tons in a stand-alone project”, he adds.
He suggests that this is making a incremental difference in tonnage
and resources and he points that some of the grades discovered
are significant, even for underground developments.
Which brings up the big problem in most mining and oil and
gas operations these days and that’s finding people to get the
work done—tradesmen, miners and the like. McLeod tells us that
the miners are actually already hired and much of the other trades
people are lined up and they are hoping with the 70 people on
board, to build a first-class facility.
It’s going to be important down the road, he suggests, to let
trades people in the area know that the projects are going to be
there and running for a while and that people aren’t going to have
to be worried about where their next job is and having to go to
Alberta or other places.
Interesting to see the market reaction today and I suspect there
is going to be a few analyst upping their targets in the next while.
As far as stock picks—he suggests you take a look at a base
metal play—Selkirk Metals.
Sherwood Copper
www.sherwoodcopper.com
Selkirk Metals
www.selkirkenergy.com
NATURAL GAS: $7.32 +0.375
Trying to predict the weather is usually a mug’s game and those
who counted on a regular kind of winter past, lost big in natural
gas commodity prices. With the warm winter overall in North
America, there wasn’t a lot of people needing to turn on their
furnace like in normal years. Nevertheless, there are those that
still aren’t afraid of making predictions as witness high profile
market commentator, Dennis Gartman in the USA. He writes today
in his newsletter, “Warm water makes for hurricanes; hot
water makes for big, dangerous hurricanes and for the moment,
the waters in the Gulf and the South Atlantic are what we would
consider hot. Weather 2000 suggests that there will be 15-22
“named” storms in the Atlantic and Gulf this year; that there will
be 8-13 hurricanes and that 4-7 of them will be intense hurricanes.
Colorado State’s well known weather forecasting team
expects 17 named tropical storms of which nine will be hurricanes”.
What’s all this weather got to do with natural gas? Almost
23%-25% of the natural gas in the US comes from those big
rigs in the Gulf of Mexico and if there are more hurricanes heading
that way, you know many of them will be shut down or possibly
severely damaged. That of course, would be good for natural
gas prices.
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