₪ David Pescod's Late Edition April 3, 2007
TSX VENTURE EXCHANGE $3214.47 +24.41
SERENGETI RESOURCES (V-SIR) $1.69 +0.01
PACIFIC RIM MINING (T-PMU) $1.27 n/c
Was that it? The one year chart on the Venture Exchange shows you the big correction we had last year and as we’ve written before, the last five years the Venture Exchange has always had a correction in the spring and sometimes the word correction would be an understatement.
But as Canaccord’s mining analyst Graeme Currie writes today in the Junior Mining Weekly, “Volumes continue to hold above a daily average of 200 million on the TSX-Venture board…as we noted several weeks ago in the Junior Mining Weekly, we continue to see abrupt capital rotation into various sub-sectors.” “Currently the focus in vogue has been molybdenum.”
Then he gets to the point... “We recognize that in the past four years activity among the juniors in this quarter has been bearish — from 2003-2006 the junior market, as measured by the TSX-Venture Index, declined between 11% and 27% in the general Q2 period. With this in mind, we have written a number of comments over the past four weeks outlining key indicators to monitor. In early March we asked the question, doubletop?”
When we talked to Currie today, he mentions the activity of the market of late that there has always been something in vogue. First it was a country such as Ecuador, then it’s been metals such as one particular metal such as moly or uranium. Then it’s been nickel. But as far as a correction right now, he suggests that most market factors continue to be quite bullish. Volume continues to be high. Metal prices continue to be high and right now he says, “there doesn’t seem to be a red flag out there.
When we get to the serious questions of what are his favorite stories?
It’s almost sad to hear one of his old-time favorites is off the top pick list and that’s Metallica Resources. It’s simply gone so far that hey—it’s time to take some profits.
On his top three list though is Serengeti Resources, a stock he’s written up that’s already doubled, but is waiting for drilling results on their Kwanika copper play in B.C. It’s a big hole they’ve come up with so far and if they are able to duplicate it, this could be quite significant.
His second pick is Pacific Rim, the Catherine McLeod Seltzer company currently working in El Salvador and Nevada.
As a third pick, Aurelian Resources—a stock he’s followed and been bullish on for a long time currently involved with the problems of politics in Ecuador that over the last few days has been recovering nicely. He currently has a target on ARU of $45. For a copy of the report, email Sandra at sandra_wicks@canaccord.com.
Meanwhile, metal prices do continue to be creating lots of interest. We don’t know whether to call it Moly Madness, Tungsten Tizziness, Nickel Nuttiness or what, but the old story out of the East of Asian demand continues strong and with it being hard to find replacements, and as we rediscover the problems of getting mines built, particularly in places like Ecuador and the like, the sector remains strong.
INTL. FRONTIER RES. (V-IFR) $1.35 -0.05
OILEXCO INC. (T-OIL) $8.55 -0.08
CRUDE OIL (May Contract) $64.64 -1.30
We check in with Pat Boswell of International Frontier who is one of the partners with Oilexco in the Laurel Valley in the North Sea and is a play that we had nominated as one of the “Exploration Plays of the Year”!
The target is that big…some suggesting as much as 600 million barrels and possibly more, but of course it has to be there and like all high-risk/high-reward plays there maybe the chance that it isn’t!
What Pat Boswell tells us today, though, is that drilling has preceded incredibly fast and that the Oilexco guys are definitely getting it done and that they could be looking at logs as early as late next week...
IVERNIA INC. (T-IVW) $1.11 -0.22
GEOLOGIX EXPL. (V-GIX) $1.48 +0.49
Oh…the joys, the exhilarations, the excitement and the grief of the junior mining business. There is almost nothing like it…except for that high-risk/high-reward oil and gas play, I guess. Just take today’s new for instance – Ivernia Inc. had to declare force majeure on shipments of lead from it’s Magellan mine in western Australia and this may go on for as much as three to four months Ivernia has said. Their mine is expected to be one of the top five lead producing mines in the world and it looks like they are having trouble shipping the concentrate or at least concerns as far as Australian safety officials are concerned and it looks like shipments have been stopped! Needless to say, that’s not good for the stock as the chart to the right shows you. There are always surprises in the mining business, both on the good side and as the chart shows you again on the bad side as well.
Meanwhile, today in the exploration game you never know who’s going to drill what – where - and just what kind of gifts Santa Claus could leave under the tree. One of the big winners today was Geologix as they announce an intersect of 284 meters today 1.7 ounce of gold per ton equivalent which of course is a very exciting width – make that extremely exciting width. The way it’s worded in gold/equivalent terms might be a little difficult down the road, but this is just the exploration phase and that kind of news attracts attention.
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