COACH 2007 picks ........
To: Slan who wrote (70443) 12/28/2006 6:53:20 PM
From: zoo york 1 Recommendation of 70485
Hi Slan!
Here is my commentary for my top-5 stocks list, as I posted on my forum today:
I have decided to continue posting a list of my 5 top picks for each new year, based on my own evaluation criteria and outlook. I own stock in all of these companies, and some of them are sponsors of the website, so my opinion should not be construed as unbiased, and I am certainly not suggesting that my picks represent buy recommendations. Take my comments as an honest presentation of one man's opinion, and do your own DD!
Here are the companies in order, and a some comments on why I am bullish:
1) Bandera Gold (V.BGL) - Bandera is advancing a project that is likely host to a million ounces or more of gold, and several hundred million ounces of silver, that has been a high grade producer for decades of mining by previous operators. I think the company has a solid development plan, excellent management, a tight share structure, and great prospects for asset appreciation and leverage to future discovery potential. The company has a built-in growth profile as they commence production early in 2007 at about 60 tonnes per day, and the brand new mill has been designed for capacity expansion to 260 tonnes per day by the end of the year. Further incremental growth will be realized with the commencement of bulk processing lower grade ore at a heap leap pad currently under construction. I expect the company to be cash flow positive from operations almost immediately and then produce quarter-over-quarter increases for years. My target price is $3 in 2007.
2) EXMIN Resources (V.EXM) - EXMIN is an early player to the story in Chihuahua, which is the top producing state in Mexico for mining, and as a result they have some large projects under control that are great prospects for discovery. The company has taken on a role as project generator, and they have strong contacts to leverage that into JV agreements that create value for shareholders with minimal funding requirements to the company. The commencement of production at the JV Moris Mine will generate cash flow from operations that will underwrite exploration on other projects. EXM will also be a beneficiary of a possible area play that is developing in Chihuahua, as significant exploration projects operated by other companies begin to bear fruit. I would classify Yale Resources (V.YLL) as pick 2b, since they are a JV partner of EXMIN and hence either company is an option for the exposure to discovery in Chihuahua. My target price for EXM is $1.75 in 2007, and $0.75 for YLL.
3) Gold Canyon Resources (V.GCU) - Gold Canyon offers exposure to several projects in various stages of development, any one of which could be considered to represent greater shareholder value today than the entire market cap of the company. I expect the company to continue to build asset value through discovery of additional gold ounces at the Red Lake project, but my confidence going forward is driven by the growing market awareness for rare earth elements. GCU controls a 100% interest in the Cordero project in Nevada, which is the largest known Gallium resource in North America, and could also be host to an economic resource of another REE, Scandium. A compliant resource estimate already exists for the property that will likely be significantly increased as data from additional drilling is analysed, and as more metallurgical work is done to the resource value for Cordero could grow to well above $1 billion, and given that the deposit is located near surface, and within easy access to supporting infrastructure in a mining friendly jurisdiction, the asset value of the project could be then estimated at $100 million. The company also controls a uranium prospect that the market does not appear to have discounted into the share price. It is difficult to project when a value story will suddenly be discovered by the market and a rapid increase in share price results. Just in consideration of the defined gallium resource of 722,000 Kg (approximate $40 million asset value) and 250,000 ounce gold resource ($15 million asset value), and the fully diluted capital structure of about 53 million shares including all placements recently announced, a fair market value for GCU should be in the range of at least $1 per share. The market has already demonstrated a willingness to bid a lavish premium into uranium exploration companies, and we could see a similar mania develop for rare earth elements, so my target price for 2007 will range between $1 and $3 to account for speculative premium and additional discovery potential from ongoing work at the company projects.
4) Silverstone Resources (V.SST) - Silverstone is a junior that was spun out from Capstone Mining along with control of 4 advanced stage silver exploration prospects, each of which hosts past producing mines. A proven management team, excellent capital structure, and the high leverage to silver resource discovery potential will power SST to new highs in 2007 as the company becomes more aggressive with their exploration objectives. I expect the market to value the company in the same range as another successful Mexico explorer, MAG Silver. My target price is $3 for 2007.
5) UC Resources (V.UC) - UC has been consolidating gains from earlier in the year while the market digests a large overhang of cheap paper that was issued to fund acquisitions and exploration. The company expects to generate recurring positive cash flow from operations as they commence small scale processing of tailings at 2 projects in 2007, and this will help to offset exploration expenditures in the year for ongoing drilling programs. The stock is extremely volatilie, and the outcome from the exploration is uncertain, so a high degree of risk mitigates the upside potential for the company. The market has proven to be more than willing to participate in discovery stories, and I expect UC to follow up on spectacular drilling success of 2006, so any new high grade exploration success will power the company to a new high above $1 in 2007. This represents more than a double from the current share price and thus warrants inclusion in my choices.
Other notables that I expect to be strong performers which I have not discussed in this list are V.FR, V.IPT, T.CS, and ECU. Any one of those companies is capable of outperforming the stocks I selected for my list.
Here is the link to my choices from 2006:
smartinvestment.ca
cheers!
COACH247
Message 23136890 |
