₪ David Pescod's Late Edition November 6, 2006
URANIUM $60.00 +4.00
STRATECO RESOURCES (V-RSC) $1.80 +0.15
CONS. PACIFIC BAY (V-CBP) $0.365 +0.05
“Some pretty crazy stuff going on out there” Eric Coffin admits, as he scrambles along with brother David to get the Hard Rock Analyst published today and the excitement is all about uranium.
Eric suggests the word is that “there are lots of utilities out there that may be scrambling for uranium supplies because of the disaster that has been following Cameco and its Cigar Lake mine.”
All of a sudden, there’s some production that was assumed was going to be there, that the big utilities around the world suddenly may not have.
Eric suggests that utilities that had held off purchasing uranium supplies in the past, now are obviously scrambling to make sure that they have adequate resources available to them. The big question Eric asks is, “what the uranium price will be when it’s announced this Tuesday” and he warns us that uranium is a very illiquid market, kind of like what you see in molybdenum and tungsten and sometimes, it might not even trade for awhile. If and when it does trade, he suggests, “it’s going to be interesting.”
He also suggests that with this excitement, the rising tide is raising almost all ships as virtually any of the 300 plus uranium junior explorers out there today, are having quite a ride. The question is, how long this could go for…
When we get to the question we love to ask—if you could only buy one uranium stock today, what would it be? He sticks with his suggestion of Strateco Resources, which has had an enormous ride.
Eric cautions us again though, that the stock is now generously priced and they are going to have to deliver on their exploration program in the Otish Mountains.
Coffin is confident that they should come up with something, but the question he asks, “is it an additional ten or 20 or 30 million pounds and is the lake frozen so they can start drilling?
Another comment on the day—he points to the Aurelian financing of $75 million. He figures it’s just a matter of time before there is a take-over made on Aurelian and wonders, how much? He wouldn’t be surprised to see $50.00. The one thing you are going to wait for though, is metallurgy. With Kinross’s take-over of Bema today, obviously the take-over game is alive and well.
Meanwhile, for those looking for a “cheapie with a chance” a uranium play that might be in the right neighborhood, take a look at Consolidated Pacific Bay Minerals. The map shows you they are in the right neighborhood, where Cameco and Strateco are working.
Doesn’t say that this “cheapie with a chance” has anything yet, it’s just that they are in the right place for real estate.
BEMA GOLD (T-BGO) $5.97 +0.57
ANDINA MINERALS (V-ADM) $2.78 +0.28
AQUILA RESOURCES (V-AQA) $1.01 +0.01
Today the big news is the take-over by Kinross of Bema Gold.
The theory has been out there for awhile now that the easy-tofind big gold, precious metals, or for that matter, other mineral assets, have already been discovered and what does a big producer do to increase the size of their company or add value?
Maybe take-overs are going to continue to attract attention. It wasn’t too long ago that Barrick Gold bought out Placer Dome on a humongous deal and today this $3 billion deal again attracts market interest.
We go to Haywood mining analyst Andrew Kaip for his comments because one of his stock picks of just a few days ago Andina Minerals is flying. Needless to say, we want to know why because we had written it up and bought a few! Kaip suggests that it’s in the right neighborhood as Kinross is going to have a big interest in this area of Chile and maybe as Andina’s Volcan project grows in size, they might become a potential take-over down the road as well.
Meanwhile, Kaip mentions he is a little bit concerned about what’s going on in the uranium sector. He does reiterate that he’s a precious mining analyst, but he worries that so many juniors out there are getting the lofty figures and it will be years and years before any of them are a producer.
“Maybe a person should be looking at the producing uranium stocks” Kaip cautions, while admitting that he owns a few of these raging junior explorers as well.
Andina Minerals remains one of his favorite stories, but he also suggests a person should very seriously be looking at Aquila Resources. Uranium is one of the stories of the day, but zinc prices continue to go the right way and there aren’t that many zinc players out there.
Meanwhile, Kaip is one of those analyst not afraid to go to some pretty scary areas of the world and he mentions a person might want to be watching political results from the Democratic Republic of the Congo. He suggests according to reports from the BBC, Kabila, who he considers the good guy, might be about to win that election. If it continues, “that would be good news for companies such as Moto Gold (MGL) and Banro Corp (BAA).
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