₪ David Pescod's Late Edition March 12, 2007
HUDSON RESOURCES (V-HUD) $1.35 +0.05
One of the interesting stories of the day is Hudson Resources
and its diamond exploration program in way off
Greenland. They’ve had the bad luck of having to announce
some of their latest results on a day that the Venture Exchange
took one of its biggest tumbles. It also came out with
results that the market was obviously hoping for a little bit
more of…
Anyway, we caught up with James Tuer the other day and
ask him for him a look/see or a calendar of events over the
next six to 12 months, so people will know exactly what
they’re up to in a very rough time schedule.
Instead of quoting or misquoting him, why don’t we just
give you exactly what he e-mailed us:
1. This week we are starting additional seismic work on the
property.
This very successfully identified the Garnet Lake dike last
year.
2. We have shipped all of our tailings (~20 tonnes to the
SRC in Saskatoon) for audit. This should take about 3 weeks
or so and will help us determine if diamonds were missed in
the initial processing. We think that there probably were
because we had many more diamonds, proportionally, in the
caustic fusion results compared with the DMS results.
3. We plan to start a drill program, which will be a mix of
exploratory holes and additional drilling at Garnet Lake, in
May.
4. In the meantime, we plan on driving in heavy equipment to
initiate the collection of approx. 600 tonnes of kimberlite at
Garnet Lake.
5. We have ordered a diamond recovery plant to be installed
in the field. We expect to begin commissioning the plant in
July.
6. During the summer, we will conduct additional prospecting
which has been our most successful exploration tool.
7. By the end of September we hope to recover and process
the 600t sample (ie 200t from 3 different locations).
CRUDE OIL (April Contract) $58.91 -1.14
NATURAL GAS (April Contract) $6.912 -0.171
There are two little tidbits of the last week or two that should
certainly makes those who are in the bullish camp for the price of
oil feel a little bit more comfortable. One of them was an article
found in the New York Times but also in other publications where
they took a hard look at Pemex the national oil company in Mexico
and the reasons to be concerned for that company.
Mexico and Pemex is the fifth largest oil producer in the world
in 2005, and is sitting on tens of billions of barrels of untapped oil
reserves according to the New York Times piece. But they continue
that much of that is in deep waters in the Gulf not far from
where American companies have announced discoveries.
The question is does Pemex have either the money or expertise
to get at that oil. They point to Cantrell in the shallow waters
of the Gulf and it is the world’s second largest oil field. That one
field used to account for about 60% of Mexico’s oil production
that has gone into a sharp decline. Production at Cantrel fell
13.5% last year and is estimated to fall another 15% this year from
3.4 million barrels a day in 2004.
Meanwhile Pemex’s proven reserves of crude oil had fallen to
11.8 billion barrels at the end of 2005 from 15.1 billion barrels at
the end of 2002. The big problem for Pemex of course is that the
government owns it and we all know that anytime a national government
owns a utility like this, you can count on it being poorly
run and if run at all its run for the purposes of the politicians.
In this case the Mexican government depends on Pemex to
finance its budget and last year sales of Pemex reached $97 billion,
but $79 billion of that went to the government. That accounted
for almost 40% of the entire federal budget. Needless to
say, there is not a lot of that money left for exploration or building
needed facilities and the like. And one wonders how much longer
Mexico will even be able to be an exporter of oil.
The other tidbit came from China, where its booming passenger
car sales have soared by 33% in just the first two months of
this year compared to the same period of 2006. The sales in
January and February totaled 712,000 units. Their total sales including
trucks, and other vehicles topping 1.3 million units.
While total vehicle sales in China hit 7.2 million units last year
are far lower than American sales, the world’s biggest at around
16 million one has to remember that it was only roughly 25 years
ago that there was only a handful of privately own cars in the entirety
of China. And we all know every one of those vehicles
needs the oil to move.
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