₪ David Pescod's Late Edition September 12, 2006
CORRIDOR RESOURCES (T-CDH) $6.10 -0.08
NATURAL GAS $5.57 -.096
Several analysts tell us that it’s one of the big plays for
the next six months, and that’s Corridor’s drilling of their
Dawson Settlement structure underneath their McCully play
in New Brunswick. It only seems natural that it was time to
go visit Norman Miller, President of Corridor for an update
and maybe some hand-holding on gas prices, as Corridor
is an all natural gas producer.
As far as Corridor, he tells us that they have public hearings
scheduled for September 27th and 28th which will be
important for getting their pipeline finally built so they can
increase cash flow. That’s assuming of course, that people
are still paying for natural gas when the pipeline does get
built.
As far as the deep play that so many of us are starting to
fix on, he suggests that while they have a rig that could go
3500 meters currently working for them, with the low gas
prices and suddenly only 62% rigs working, he’s hoping to
find a triple rig that they can bring down to New Brunswick
and put to work for some time as he notes the pressure is
off the rig finding business.
They do much of their drilling from pads, a triple could
reach much farther from their exploration pad. A mid-
November start isn’t that far away and maybe by then we’ll
find an excuse for higher gas prices.
We ask Miller to look at his crystal ball and what his suggestions
might be for natural gas, oil prices and if he had
any stock picks for us. As far as stock picks, he suggests
that when you are based in New Brunswick, headquartered
in Halifax, it’s not like being in Calgary or Edmonton where
you hear rumors every day. No stock picks.
As far as natural gas, he suggests much of what we may
have been writing is probably correct...natural gas is a
commodity in North America that is very much weatherdependent.
And with the hurricane season just about over,
all of a sudden, cold weather (or lack of) will become important
for the natural gas producers.
As far as oil prices, he won’t predict them either, but he
notes that sweet light oil is simply becoming ever tougher
to find. The stuff that refineries much prefer to process.
For those following natural gas, and trying to figure out
what next from weather, one website is probably going to
become a little more important and that is noaa.com. This
national weather service out of the U.S. is going to be very
important in predicting what next for long range weather
and if we have a return to a normal winter in much of North
America, that should mean suitable demand for a bump in
natural gas prices to make some of the suffering holders of
gassy oil stocks much more cheery by Christmas.
On the other hand, another warmish winter and there
will be nothing but coal in the stockings for Christmas.
And on the other hand, if we do get (heaven forbid) a
cold or very cold winter...now that would be a real Christmas
and happy new year for the natural gas bulls that once
again, have been getting hammered over the last several
weeks.
GLOBAL COPPER CORP. (T-GLQ) $1.60 +0.12
If there is anything that might be more than a tad misunderstood
by many good folks in the market, it’s probably
the role of the guy or gal assigned the job of “investor relations”.
It’s more than an important role, as they can in
good relationships, help get the company’s story out and
that is a considerable challenge with the thousands of resource
companies out there all trying to get the markets
attention.
You need to get the attention to make sure you can raise
the money to drill that high profile well or check out the real
potential for that mining play for wherever it is in the world.
And most importantly, to give shareholders a good ride,
they have to make sure that these companies can accomplish
that with as much leverage as possible and you get
that by making sure money is raised and have as few
shares issued as possible to give that leverage. This shepherding
of a company by the experienced IR guys is a very
significant role and while there are hundreds if not thousands
of people doing the job of investor relations, like
many professions, there is a much smaller number that do
the job well.
We’ve often commented on Scott Koyich, IR guy to the
stars (huge clients from Centurion Energy to Kirkland Lake
to you-name-it) and we think Keith Schaefer of Vanguard
Shareholder Solutions should have his name added to that
list as well. With clients such as Endeavour Mining, Eurasian
Energy, Oriel Resources and a much longer list past
clients that have grown big such as Wheaton River, Bankers
Petroleum, etc., the firm obviously attracting a following.
Something we’ve learned watching Keith’s work over the
years is that he is also market savvy.
So with a time like what we’ve had in the last few weeks,
why not go to Keith who has been in the market for some time
himself (not all that much grey hair yet, but…) for his take on
what next.
After the big move down in commodity prices of late, Schaefer
tells us that he wouldn’t be surprised to see most metal prices
six months from now, almost exactly where they are. “Sure
we can see 10% swings up and down”, but he’s betting that
six months from now, they are where they are now. And the
market will have settled down by then and he targets the VSE
Index that’s 15% higher by then, once we are past the ugly
times.
Most importantly, because he spends all his life in the market,
plus trading rumors with other good folks all the time,
we’ve learned that Schaefer is a pretty savvy market player so
we ask him the obvious question: If he could buy one stock
today, what would it be? And none of this ballyhooing client
stories...it has to be an idea or a story that has no conflicts.
Oh yes, and we would appreciate in a beaten up market, something
that could be a double!
The very obliging Mr. Schaefer comes up with Global Copper
and of course if his target is correct, it’s much more than a
double. Global Copper is run by industry veteran Ross Beaty
of Pan American Silver (PAA) fame and Northern Orion (T-NNO)
fame and Schaefer says simply that their Relincho project in
Chile is part of a well structured play, has good people behind
it and a property that’s going to attract attention. Use the
analogy Schaefer says of what’s happened with Northern
Orion (T-NNO)—once again, great people and sound structure.
“Few people have been as successful in adding real value
to companies as Ross Beaty” Schaefer suggests, and that’s
what he’s counting on. He even gives us a target that sounds
a little bit rich over the next 12 months of $6.00. Is this just
another IR guy getting caught up in his own tale? We put it to
Schaefer, Okay, if you’re keen on this, if it is $6.00 or higher 12
months from today, we owe you a bottle of wine. But a penny
lower, you owe us! He goes for the deal (and we’re talking a
good bottle of wine, the kind Schachter always threatens to
deliver). Needless to say, just in case, he’s been persuasive
enough that we now own a few, just to watch the story and
suddenly we will be watching the work of Ross Beaty a little
closer. |
