₪ David Pescod's Late Edition April 27, 2006
CONNACHER OIL & GAS (T-CLL) $3.70 -0.20
NOVA URANIUM (V-NUC) $2.75 -0.20
One thing the market just doesn’t have patience for...and that’s delays.
There are a couple of stories we’ve kind of liked that have been plagued with
them of late.
Connacher Oil & Gas has been one of our favorite plays over the last 18
months or so and it has done incredibly well for us. But with no news out of
the EUB on a decision to go forward on their project, this delay is causing
more than a little consternation. Needless to say, when there are delays,
there is always fear creeping in, and one suspects until the fears are put to
rest and progress resumes, stocks go lower.
We caught up with Dick Gusella today who has got to be one tired hombre.
He was supposed to be vacationing in Hawaii, but the last two weeks
there has been anything but a vacation. He has got to be fatigued from all
his travels to Argentina, Peru and elsewhere around the world for Petrolifera
Petroleum (PDP) plus their demands of building Connacher into the company
that he has—with the purchases of a refinery, and so forth.
Most important is the oil project that is the key for this whole development.
Today all he’ll tell us is that talks are at a very advanced stage and
they hope for a resolution in the near term with both parties. There is a native
group and Paramount Oil & Gas currently opposing Connacher at the
EUB hearings and I suspect the day that they announce that there has been a
resolution to whatever problems exists, will be a happy day for Connacher
shareholders.
Meanwhile, Nova Uranium is probably going to exemplify what is going to
happen to a lot of uranium players. Once again, delays. First there were two
to three weeks of unbelievably heavy snow that wouldn’t allow drilling equipment
and crews on site on their Mount Laurier property in Quebec. Then
they finally get drilling and find the people and skills needed aren’t around.
They have to search and have a two week delay to find trades people that
can cut the core.
Now, while Don Moore tells us that they are currently drilling the 15th hole
and should be starting the 16th (finishing Nova B and starting on Nova A).
The new delay that is going to plague the uranium business is that assay
labs have such a back up, that just when Nova is going to have the results is
still open to debate. Moore is hoping that it will be within two weeks...but
that’s a line you’ve heard before.
It has been decades since anyone has cared to drill and hunt for uranium
projects because there was little market for the goods. Everyone was refining
old nuclear weapons and uranium prices were but a pittance.
Now the reverse is true and try and find labs that can tell you if you’ve got
some uranium in your core. There aren’t that many and those that can, have
huge line ups.
Meanwhile, we’ve gone from four or five uranium explorers to around 250
and I guess one could expect waits for almost all of them when they finally
do get working.
S&P/TSX CAPPED INDEX:
It’s an ugly day out there today and the question is...is this the
start of a correction we’ve been mumbling about? It’s been
weak for a couple days now. But still, for those who follow the
energy index, high profile Josef Schachter of Schachter Asset
Management Group has his new monthly report just out and it
might have hit your desks today. The issue features “The Energy
Bull Market Party is On” and he suggests “Enjoy this up
leg in the S&P/TSX Energy Index to 425+ into Summer 2006”.
He writes, “From the US$59.20 level in mid-February, we have
now reached US$72 and expect to see even higher levels for oil
prices as we see the hurricane season and gasoline demand lift
prices toward US$80/boe. On top of this remains the ongoing
supply disruption in Nigeria, Chad, Venezuela, Iraq, etc. Any
additional supply losses could cause prices to lift even higher
than our forecast. The risky gamesmanship of Iran could be
one such event”. As far as his top picks for the month, we notice
his favorite for the internationals is Oilexco (OIL), a story
that we’ve mentioned more than a few times and for the domestic
arena, Delphi Energy (DEE) which I’m sure you’ve noticed
just the other day, two analysts—Fred Kozak of Haywood and
Jim Welykochy of Genuity Capital both have commented on
favorably. For those who want a read, contact Sandra at
sandra_wicks@canaccord.com.
AN OPEN PIT DIAMOND MINE IN RUSSIA
The scale of open pit mining can sometimes
just boggle the mind. But of all the presentations
we’ve seen, this is probably one of the
more intriguing. It is an open pit diamond mine
in Siberia and the scale of it is just enormous.
We don’t know who to thank for sending this
slide show, but if you want to take a peak at it,
just e-mail Sandra at sandra_wicks@canaccord.com.
We promise, you will find it interesting! |
