₪ David Pescod's Late Edition April 25, 2006
GOLD $631.50 +10.40
ANATOLIA MINERALS (T-ANO) $ 3.85 -0.01
We’ve been mumbling about a correction in the junior mining sector about two months now and there’s this new thing in our account which hasn’t been there a lot before... it’s called cash! We are almost hoping for a correction now, but finally analysts are saying something that gets us to look forward to it.
First, the Coffin Brothers suggest a correction is coming and now Andrew Kaip the Haywood mining man in Toronto suggests that last week was not a correction, but a minor jitter. He figures that gold could correct further to the tune of $50 and that, he suggests, “could spook people quickly”. He is almost looking forward to it as well as an opportunity to pick up some more of his favorite stories in an ongoing bull market.
Fifty dollars sound like a lot, but he says, “Look at the charts on gold and you realize how quickly it has gone up over the last while. It could drop just as quickly” he suggests.
As far as his favorites? He is obviously not afraid of places in the world that some of us prefer not to go. On his top three list is Moto Goldmines (MGL), which is developing their Moto Project in the Democratic Republic of the Congo. It’s not a democratic place, it’s a long way away from what you consider a republic...but, you get the drift.
Another story that’s made him and us very happy because he talked us into owning a lot is Anatolia Minerals. With their feasibility report just out a few days ago, he’s now becoming of the belief that he thinks this one has a lot more traveling left. If gold corrects and a person gets an opportunity to buy it cheaper ...
A third pick is AXMIN (AXM).
As far as his favorite silver story, he is not concerned about what’s currently going on in Peru and is a big fan of the management team and the projects that Bear Creek Mining (BCM) has.
Meanwhile, in Peru they will have the presidential run off in just a few weeks and it will feature the ultra-Nationalist going against the guy that previously bankrupted the country. Now doesn’t that sound appealing?!
GRAND PETROLEUM (V-GPP) $4.70 +0.05
WATCH RESOURCES (V-WR) $0.41 -.005
STEALTH VENTURES (V-SLV) $2.23 +0.16
A little more tomorrow on the mining show of this past Sunday/Monday held in Calgary...but it being Calgary, they had to have at least one oil and gas panel and we got to M.C. it. Some interesting comments from Haywood’s Fred Kozak. He is extremely bullish on the price of oil for the next while as anyone who heard the discussion can vouch for.
As well, Jim Letourneau of the Big Picture Speculator who is rapidly becoming one of this country’s better known experts on stuff like coal bed methane and unconventional gas. He’s thinks that gas has bottomed and its about to go whereas he is not quite as bullish on oil.
We were glad to have Jim Welykochy of Genuity Capital on our panel as well.
They each talked a bit about some of the companies they are quite well-known for following—Welykochy for following Delphi Energy (DEE) and Burmis Energy (BME) (both of which he likes); Letourneau for Panterra Energy (PAN), Stealth Ventures (SLV), Exxel Energy and Falcon Oil & Gas (FO) and Fred Kozak for Oilexco (he still maintains his $8.00 target and likes their portfolio of exploration).
The important point though, was that “of all the companies they followed, could you please focus, and pick one oil and gas company to buy right now… and what would it be?”
Letourneau, as he did on the panel the previous day, mentions Stealth Ventures, the coal bed methane play in Nova Scotia that shortly starts drilling and testing their projects to confirm just how much they can recover of the estimated 1.6 trillion cubic foot reserve there. If the recovery is only 10%, that will disappoint people, but if it is closer to the 50% number some people hope for, this could be one heck of ride.
Kozak picks Grand Petroleum, a story that has attracted take-over talk and Kozak says just what one might have thought, “It seems that to gain recognition in the oil patch, one has to have sold one’s company successfully to attract attention”, he says. Grand is his pick.
Welykochy picks junior Watch Resources, which has already doubled for him, but he suggests that results continue to point to ever-higher potential targets. Watch is his pick.
FALCON OIL & GAS (V-FO) $3.09 +0.04
I’m sure you’ve all heard of the “Million Dollar Man” so may we introduce you to the “Quarter Billion Dollar Man”. Today, a senior player of the Falcon Oil and Gas story is suddenly gone from the scene, as Allan Laird has resigned or been replaced or whatever you want to call it when you read the news announcement from the company today.
Obviously, the market didn’t like the news and in the first bit of trading, the stock was down as much as 70 cents or in other words, a quarter of a billion dollars worth of asset value disappeared. Later in the day it recovered.
We track down Allan today, and he says simply that the travel was getting to him, that he has to spend some more time with his family and that they’ve got such a team that if anything should happen to anyone of the players in Falcon, “it shouldn’t really matter anyway!” As of now he suggests, he’s on sabbatical over the summer and hoping to get his health back in order. That’s what he’s saying ...
Excuse us, but we are going to read something into this. When you’ve got two interesting characters like Marc Bruner and Allan Laird involved in a story, how dare we suggest something might have happened between the “Dynamic Duo”, but that’s what we suspect. These two, were the founders of Ultra Petroleum and two of the key players and many people following the Falcon story are hoping for a similar success story.
Just look at the volume today and it tells you how widely followed this story is, not just in Alberta folks—this is from Bay Street to Wall Street to London’s financial district. It’s one of the stories of the day. Does this big Basin Centered Gas play work or not and I suspect by mid to late June when they finally test some of the first wells on this play, we will get a taste. Once again, the excitement about Basin Centered Gas is usually if you get a couple of wells, that tells you, you’ve got hundreds if not thousands more potential wells.
Which of course is the good news. It was Jim Letourneau of the Big Picture Speculator and someone getting quite a reputation for following unconventional gas plays, be it basin centered gas or coal bed methane, that got us involved in this story, although we have followed Laird for years. He told us recently that as the stock went up, he sold half and as it went farther up he sold another half. Today as the stock cratered, he actually nibbled on a few.
Well, we are a little more nervous than him and it seems every time we check, there is ever more stock issued without yet, one successful well to show for a market cap that was approaching almost a billion and a half dollars. We suspect that if the well in June is not awesome, the market will be more than a little disappointed.
We wish Allan Laird and his former teammates well, but we are gone! |
