₪ David Pescod's Late Edition August 25, 2006
AURELIAN RESOURCES (V-ARU) $26.74 +1.74
CORRIENTE RESOURCES (T-CTQ) $ 4.93 +0.30
They say if you snooze, you lose and I guess the same could be said about taking summer vacations. There we are, off three weeks figuring we are just missing the summer doldrums, but there is always something going on!
Take the case of Ecuador...and Aurelian Resources. It’s become one of the stories of the day and we did a piece just a few days ago with Canaccord analyst Graeme Currie, who these days has eyes only for one girl and that girls name is Aurelian.
Graeme again asks today, the same question, is this not THE discovery for the decade? He did have a concern that with 7 million shares coming out of private placement this coming Monday, there might be some pressure on the stock. Obviously not as the last few days with ever more analysis being on the stock by internationally regarded geological figures, Aurelian’s stock just continues to chug along.
But earlier, we referred to missing something and we suggested that anyone who wants to look at something worth their while, give Debbie Lewis an e-mail at debbie_lewis@canaccord.com. And what we are talking about is an 80-page report that Canaccord analysts Wendell Zerb, Steven Butler, Graeme Currie and probably doing much of the grunt work, Toni Wallis—did producing an 80-page report on “Ecuador.” It was published July 27th.
“Southern Ecuador has rapidly become an attractive choice for mineral exploration/development companies. Permissive geology in unexplored or under explored areas, a stable mining code, an opportunistic labor pool, no restrictions on capital flows, and relatively good infrastructure has led to the recent interest in the country.”
And there are lots of mining companies discovering Ecuador, just next door to the very successful mining country of Peru. Corriente Resources is there with some very significant projects as is IAMGold (IMG) and a whole list of companies such as Coastport Capital (CPP), Cornerstone (CGP), Lateegra (LRD), Plexmar (PLE) and Skeena (SKE).
Once again, for a brief look at the companies, the geology and an in-depth report on the country, this is an interesting read, particularly for those with a bit of a technical bent.
Meanwhile we get a lot of questions about “Area Plays”.
When we ask one analyst about some of the juniors surrounding the Aurelian play, we are reminded that many people sometimes play the cheapies nearby the main horse, hoping to get a ride from the excitement of discoveries made by the major explorer—ever hopeful that just maybe the good stuff extends onto their ground. Some people even pick up a basket of surrounding juniors.
When we ask one analyst what his preference of what to do would be, he reminds us that in all major discoveries over time, whether it was Eskay Creek Lac desGras, Hemlo or so forth, over time, it paid mainly to play the main horse. In this case it is Aurelian.
There’s many people questioning about Plexmar (PLE), which has had a decent run of late. We note that this company has picked up some very interesting ground near Aurelian...but on the other side, it’s not cheap. Fullydiluted, it has 139 million shares outstanding, so better than $100 million market cap...
DELTA PETROLEUM (NASDAQ:DPTR) $20.86 +0.84
One thing about doing this letter on a daily basis is some of the very interesting and intriguing people we get to interview from time to time and today was a real treat, as we get to interview one of the most innovative legends on Bay Street - Eric Sprott of Sprott Securities and Sprott Asset Management. He is one of the big believers on natural resources and commodity prices and we catch up with him today wondering what he sees next for commodities and I think for those that are bullish on them, you’ll like what he has to say. But, as far as his top four stock picks we find it interesting that Aurelian Resources is once again front and center. While we hope to run the interview next Wednesday, if all editing gets completed and everyone is happy, we suspect that there is one stock that you are going to have to start paying attention to and that is Delta Petroleum. It is one of the biggest holdings of Sprott’s Mutual Funds and for those who are intrigued by the potential size of Basin Centered Gas plays, this is one story that you are going to have to start paying attention to if Eric is even close to being right.
If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com |
