₪ David Pescod's Late Edition April 10, 2006
ASCOT RESOURCES (V-AOT) $0.65 +0.03
We kind of hinted over the last two months, more than a
few times, that we are more than a little due for a correction.
Nothing ever goes straight up, although lately the junior
mining markets have done just that! They have been held
up by commodity prices, that have been moving with passion,
and they certainly have attracted a lot of money to this
part of the market.
Whether this is the start of a correction or not, we will
find out soon, but one stock that is up today is Ascot Resources,
which we had featured a few days ago because of its
stewardship of John Toffan.
Toffan, is one of the most memorable of Canada’s mining
guys, because of his participation in the Stikine discovery
and the incredible story that was. Now, he’s the man behind
Ascot, which is not a pizzazzy story at all…….for pete sakes
it’s gravel, an aggregate business, but these days every
commodity is in demand.
If we are going into a correction, this might be a quaziutility
type story a person should take a look at and for
those who would like a copy of the interview, that we have
done with John Toffan, give Sandra an email at sandra_
wicks@canaccord.com and she will send it off to you.
Interesting reading!
PETROFALCON (V-PFC) $2.06 -0.06
We’ll show this chart again, because we remember it so vividly. A
well run company by accomplished oil and gas guys that had previously
built a 50,000 barrel a day company and sold it and then decided
to try it again and things were going great! And then came
along the problem…..Hugo Chavez the leader of Venezuela decides
to change the rules dramatically and all oil and gas companies
there have seen their bottom lines affected. So what next for Peru?
Peru is one of the worlds leading producers of many mineral commodities,
but the recent Presidential election had produced a run
off that is down right scary! A recent report, and this could change
on the hour, reported that it looks like it will be a race between the
former President Garcia, who bankrupted the country, and Ollanta
Humala the nationalist who scares international investors just as
much! Today, www.minesite.com writes an article and using the
“N” word….nationalization. It’s that scary of a place! While Peru’s
economy has been booming the last few years, helped by international
investment in mining, Peru is still a country where the press
suggest ramped corruption exists and there is a privilege class of
people there. Half the population, it is suggested, still tries to get
by on a $1.00 a day. What’s best for the average Peruvian? Well,
we don’t think it’s yet another dictator running the place, but for
investors it’s going to continue to be a scary place to be.
Interview with Pamela Strand
President of Shear Minerals
Today, we are with Pamela Strand, the President of Shear
Minerals, who is a very happy person. They announced
some very significant developments along with partners
Stornoway and BHP Billiton on the on-going search for the
next commercial kimberlite-pipe in Canada’s Arctic and the
last year or two has been a lot of work and not a lot to show
for it….until now!
Pamela: Yes, thanks Dave! We put out some diamond results
yesterday from Churchill and the results are quite fantastic
and we are very excited about them. The diamonds
have come from a till sample from the surface that yes, I
took last summer while prospecting - that is why the sample
holds my initials “PS”
I was out prospecting in an area where we had identified
some very high diamond indicator mineral counts and
chemistry within a mineral train outlined from our detailed
sampling grids. The results obviously were quite a breakthrough
for us. As you mentioned we have found a lot of
kimberlites through drilling at Churchill, 41 to be exact and
obviously they haven’t been the right ones!
So what we have discovered in this sample was first,.
abundant indicator mineral and the right type (G10 pyrope
garnets) and then we found kimberlite fragments, again the
right type, and now diamonds. We now have the proof that
there is a distinctly different type of kimberlite out there on
our property than what we have drilled to date, and it’s got
higher diamond potential.
David: They suggest that 1 out of 1,000 kimberlites is commercially
economic, is that roughly right?
Pamela: Yes, that is roughly right. Diamond exploration it is
the proverbial “needle in a haystack” - that is what we are
looking for and have always been focused on at Churchill.
Churchill has this high interest chemistry that we have been
unable to find the source of and that is what Shear has been
focused on. It takes a lot of time and money to explore for
diamonds. With risk also comes reward.
David: In plain English, what does this mean now for Shear
and its partners?
Pamela: I think it speaks quite highly of the technical merits of the
Churchill Diamond project and what we have believed in now for
years. We have been systematically sampling there and doing very
detailed exploration and it takes persistence! We have always
known that the mineral chemistry suggested a source rock more
diamond bearing then the kimberlites we have discovered to date
and I think that results yesterday are proof of that!
David: You start drilling here in just a couple of days, what kind of a
schedule do you see for this summer?
Pamela: The schedule for this year is to open up the camp in a
week or so and then we have to send the ground crews in to do
detailed ground geophysics on this one target area.
Our spring program is focused on the area where the diamonds
have been recovered and what we hope to do is successfully drill
this kimberlite—determine the size and send that sample in for further
diamond analysis. Then the drill will shut down for a bit of a
window, so that we can target the additional areas of high interest
mineral chemistry (about 12 areas in total) and then it will restart up
for the balance of the summer.
We will have two phases of drilling and hopefully news of this
new kimberlite type to release. Churchill is our flagship project, but
Shear will also be doing some work on our diamond projects in Alberta
and the NWT.
David: One could say that this discovery that was announced the
other day came in the nick of time, because the interests in diamonds
has definitely been subdued compared to the precious metals
and base metals. It does take a lot of time and money for the
search of diamonds, doesn’t it?
Pamela: It does! It takes a ton of money and there is risks, but
there is rewards! We all know that diamonds can be very lucrative
for companies and investors that have invested in them and it is
quite a technical science. Our first sample at Churchill was taken
back in 2001 and we have now spent more than $19 million on systematic
exploration there. It takes time to narrow the target areas -
we started with 8.5 million acres at Churchill and we are looking for
something the size of one or two football fields. You know that
takes time and also you need a bit of luck.
David: Of course diamonds tend to be much more rewarding if you
ever do find one, compared to precious metals or base metals.
What kind of reward could one be looking for on this joint venture.
Pamela: I think that the ultimate reward would be to find another
Ekati or Diavik mine and those mines are world class diamond deposits.
Collectively the two of them will generate more than
$25 billion of revenue over their life span. So, that’s
(you know) very, very lucrative.
They have both paid back their capital costs, which
have been quite high. For example: Ekati at $1 billion
dollars, paid that back in less than 4 years. So the return
for investors in diamond juniors for discovering
diamond mines can be very high! One has to also always
the odds and the risk associated with diamond
exploration.
David: Okay, one last question. If you could only buy
one junior other then your own or one that you have no
conflicts with, which one would it be and of course we
would prefer something that’s going to double!
.
Pamela: Yeah, I’m only looking for doubles these days
myself! That’s a hard one, and I know that you always
ask this question! I have thought about it and I think
one that is undervalued compared to its peer group
and that’s going to have a lot of exciting gold numbers
coming out of it, with future drilling, is Strongbow Exploration
(SBW).
David: Okay, where are they?
Pamela: It is a Vancouver based company and they are
working one very exciting project in British Columbia,
but they also have a lot of projects in Nunavut.
They got a deal with the NTI government but their
project in B.C. is called Skoonka and its north of Hope
and if you check out there web site
(www.strongbowexploration.com) they’ve got some
very impressive initial drilling results from last year
and they will be back in there this year!
David: Okay, super. Thank you very much for your
time!
Disclosure: Peru Copper: Canaccord Capital covers this stock and has a Hold rating on it. (Hold: The stock is expected to generate riskadjusted
returns of 0-10% during the next 12 months.)
Canaccord has recently participated in a financing for Stornoway Diamond Cp and Strongbow Exploration. |
