₪ David Pescod's Late Edition May 24, 2006
NOVA URANIUM (V-NUC) $2.30 -0.60
COASTPORT CAPITAL (V-CPP) $1.30 +0.25
MINERA ANDES (V-MAI) $1.38 -0.07
GOLD $637.40 -36.00
Gold got clobbered today—a combination of a much stronger American
dollar because of once again, big concern about Avian Flu in Asia, plus lots
of stops being triggered. Also news that gold sales for jewelry plummeted
22% in the first quarter. (Mind you it was more than made up for demand for
gold from ETF’s and speculators).
But with all the money raised by junior mining companies these days,
that means a lot of folks are out there looking. While you know the odds
aren’t good, only a handful per 1000 companies will ever find something of
commercial significance, we’ve got record numbers of companies at least
looking and well financed.
Today Nova Uranium disappoints with results from their Nova B drilling on
their Laurier Property in Quebec.
Strangely, they didn’t drill the Nova A zone first where the resource is
expected to be both significant and of a fairly significant grade for a company
like Nova, which is fairly leveraged. This is an area that was drilled
almost three decades ago and came up with some fairly good drilling, but
was not NI-43-101 Compliant.
Results from Nova B (a previously un-drilled area) announced today
were, shall we say, disappointing at best. When we talk with Eric Coffin of
the Hard Rock Analyst who has been following this story since it was a fraction
of even today’s weaker price, he suggests “you almost have to wait for
the results on the A zone” but he admits today’s are not great results at all.
If they do come up with the expected 77 million pounds that some people
talk about, Coffin suggests it could be a multiple of today’s price.
Also reporting today is Minera Andes which came up with an absolutely
incredible 725 feet of 1.6% copper on their Los Azules project in Argentina.
Winter will be setting in on that project sometime soon, but both the depth
and grade on this is absolutely out of this world. Had they come up with an
announcement like this just a month or two ago…
Speaking of monster holes, Coastport Capital and Cornerstone Capital reported
drilling results on their La Plata poly-metallic massive sulphide project
west of Quito, Ecuador. How about 8.9 meters which is pretty good
widths, of 28 grams per ton gold, 289 grams per ton silver, and absolutely
amazing 17% zinc, 5.86% copper and 1.2% lead.
Canaccord analyst Wendell Zerb has followed this story and calls it a
fabulous intercept, but reminds us that on this project, they’ve had flashy
intercepts before. This time, it will be interesting to see how far the stepouts
go and what kind of resources they can add to it. Meanwhile, Zerb suggests
we are in a traders market and anytime you are out there contemplating
purchasing something, maybe your pink tickets should be near by.
He had predicted here some time ago, that he expected gold to settle
down to the $610 to $630 range, and hopes that’s where it settles.
CRYSTALLEX INTL. (T-KRY) $4.37 -0.12
We’ve been intrigued and on more than a few occasions we wondered
if the miners that are involved in Venezuela have totally ignored
what’s been happening to oil and gas company’s in that country.
Hugo Chavez has been grabbing ever increasing interests in oil
and gas ventures in that country and raising royalties, taxes and the
like so that some large companies are actually starting to leave Venezuela.
Ignoring that, Cramer of MSNBC’s Mad Money fame has been
hyping Crystallex Intl., but today, Hugo Chavez shows his true light
and it looks like mining companies may be facing the same problems
as oil and gas companies in that country. According to the Dow
Jones wires today, they write, “Venezuela will renegotiate all mining
agreements with domestic and foreign companies to give the state
absolute control in each deal, a top goal of a new mining law, according
to the country’s mining minister”. It continues, “we will intensify
the review of all contracts and concessions so the state can assume
total control,” Mining Minister Victor Alvarez wrote in a statement
released Wednesday. The suggestion is that they want to keep all
concessions active instead of idle. But Venezuela remains one country
on our list that we simply don’t want to speculate on at all, having
had very unpleasant experiences there in the gas side.
CRUDE OIL $69.95 -1.90
Jeff Rubin is the chief economist and chief strategist with CIBC
World Markets and we’ve learned over the years to pay attention
to whatever he says. For an economist, he’s often quite outrageous
and he’s usually right! What got our attention to follow him
originally was back almost two decades ago when Toronto real
estate was going through the roof and at the time, Rubin thought
it didn’t make sense. So in a report that caught international interests,
he suggested that housing prices were in for a tumble of
around 20%. Needless to say, he was not popular and lots of people
poo-poo’d him. He turned out to be right as real estate did
correct significantly. Now a report he’s put out is suggesting that
gas prices could hit $1.30 per liter this summer and he’s basing it
on another severe hurricane season in the Gulf of Mexico, which
has just been forecast by the U.S. Weather Service. Rubin writes,
“with the potential loss of as much as 750,000 barrels per day of
production from these storms, we will see West Texas crude easily
top its recent peak” and he suggests “that crude could average
US$78 per barrel by the fourth quarter of 2006”. Also the report
suggests that “U.S. production will decline from current levels of
7.3 million barrels per day to about 6 million barrels per day by
2010”. Wow! More important than his thoughts on oil could be
the hurricane affect on natural gas prices which at $6.00, is one
commodity that has not performed well at all, but some hurricanes
could help gas prices, just as well as oils. |
