₪ David Pescod's Late Edition December 6, 2006
OILEXCO INC. (T-OIL) $7.00 -0.09
RUPERT RESOURCES (T-RUP) $0.74 -0.02
Arthur Millholland phones last night with an update and a stock tip...and the Oilexco news is most intriguing, I think.
He suggests for anyone who is watching the DTI bulletin boards, you would know that their Shelly project is now working on its seventh hole. If you remember, Shelly was expected to have three holes drills drilled into it and now they are already on their seventh!? Ah, yes. If you can read into that what you probably should, doesn’t that sound like awfully good news? And maybe that’s why the stock has been gaining a few pennies here and there lately, for those hawk-eyes that can follow those detailed bullboards.
Millholland also suggests that as soon as they finish on Shelly they will go to Kildare and that means Oilexco and partners International Frontier (IFR) and Gulf Shores (GUL) will finally get around to drilling what is potentially one of the biggest plays in the North Sea in years, the Laurel Valley, sometime in February.
But in the meantime, Millholland wants to play stock picker and finally blesses us with a stock pick. We didn’t know this, but it turns out that Art has spent some time (many years if not decades ago) working at hard rock geology, not just the oil and gas type, as he was field mapping years ago in Northwestern Ontario. He even spent some time touring some mines in the northwest area of Ontario such as Campbell Red Lake.
Which gets us to the stock that he’s thinking a person should be following right now and one that he admits owning and I hope he feels guilty about how little he recently paid for it. It’s a story that we’d written up a long time ago on Rupert Resources, a company that’s been having all sorts of trouble getting the drilling going, for the simple reason that hard rock drilling usually involves rigs going 200, 300 or 400 meters deep. This play is now down to 2800 meters, using new drilling technology and is way, way behind schedule and we assume way over budget.
What’s exciting is that they are on the old area of Ontario where Goldcorp, Campbell Red Lake and some of the world’s richest gold mines exist and little Rupert had picked up a chunk of land, right in the middle of it, that just might have some of the same good stuff.
As Millholland says yesterday, “there’s nothing to say that the gold zone should stop at a certain boundary.”
Millholland suggests that the rumors are now flying that their drilling is finally into the right type of rocks. It doesn’t mean that the sweet stuff is going to be there, but being in the right rocks, tells you that you are in the right neighborhood and the trend here, reminds us as being one of the richest trends in the world.
As far as the delay after delay after delay, he reminds us that great things take time...which reminds us of some of the delays once in a while one has experienced with Oilexco.
Millholland himself says “that you are right next door to some of the highest grade mines in the country, if not the world, right next to Dickinson Mines for one.”
He makes a rather bold prediction. Rupert Resources, he suggests, “down the road is either going to be $0.30...or $30.00.”
After Millholland’s enthusiasm, we went to Neil Briggs at Rupert Resources to get a taste of reality and he updates us as to the project whose drilling has now gone on for almost two years.
He suggests that as of today, they are at 2869 meters and their target is probably to go all the way to 3000 meters, which would be the deepest hole in Red Lake. Briggs suggests that they’ve been in the Balmer volcanics which are the rocks that you want to be in for almost 300 meters and also, in some places, they’ve been in sulphides which is what you are looking for.
They don’t know if they’ve got any gold yet and considering how backed up the labs are, he suggests it will probably be mid-January before they know if there is any of the sweet stuff.
As far as the reaction in the stock the last while, Briggs suggests that there have been market players that have been following the story for a long time, but he speculates didn’t want to get in until the drills had made it to the good stuff at depth and obviously, some of these players just in the market, created a stir, surprising even Briggs as to the volume and size of the recent bounce.
What happens if this hole is not a good one after all this time and money? Briggs suggests that there is still over $4 million in the bank and if this doesn’t work, they will simply decide whether they drill another one or look at any one of the hosts of alternative projects that their group might have at any given time.
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