₪ David Pescod's Late Edition April 4, 2007
GOLD-ORE RESOURCES (T-GOZ) $1.08 +0.06
ATNA RESOURCES (T-ATN) $1.58 +0.06
BLACKSTONE VENTURES (V-BLV) $1.43 +0.22
With the excitement in the mining markets, we go to John Greig, the industry veteran. John has been associated with such success stories such as Sutton Resources, Cumberland Resources and EuroZinc Mining.
We had published an interview with John and his stock pick of Gold-Ore Resources with its Bjorkdal project in Sweden and we are looking for an update today. It looks like as far as stock picking goes, Gold-Ore remains one of his favorite stories. He suggests that “it has a modern mill and big capacity and looks like drilling is proving that there is lots of gold in the ground and he hopes to see a ramp up in production over the next year.”
He still hopes that things develop as they have been recently to see if that stock could go significantly higher over the next while.
As far as whether the markets getting a little bit ahead of itself, he refers to the excitement over nickel and moly. “Based on what I’ve read, if China and India continue to fulfill their role, and come on strong with their economies, why can’t commodity prices remain strong for a while?” Moly he
points out reached $40 a pound a while ago and he wouldn't be surprised if it could do it again.
As far as nickel which has actually been retreating a bit in the last few days, he suggests that “it looks like supply and demand still continues to be favorable” and he suggests that “most nickel miners could still make an awful lot of money at $10 nickel compared to the roughly $20 its currently trading at.”
John is directly related to the nickel business because he is Chairman of Blackstone Resources, which in the last few days, announced some pretty significant drilling results which he suggests he is quite excited about and calls it “a great exploration play.”
As far as stock picking when asked to come up with something he has no conflicts of interest with, he suggests Atna Resources as he is starting to feel that gold is the one commodity that could have a good time from current levels (considering the runs that moly, nickel and other commodities have had, that might be a safe assumption) and suggests that Atna could benefit from the higher gold prices, particularly if Atna and Barrick ever work out their differences on developing the Pinson project.
RIO NARCEA GOLD (T-RNG) $5.12 +0.30
GGL DIAMOND CORP. (V-GGL) $0.83 +0.70
GLOBESTAR MINING (T-GMI) $1.60 +0.03
Again one wonders whether things are getting carried away in an era of “molly madness” or “nickel nuttiness”! Today, we see all sorts of excitement – first generated by the friendly takeover by Lundin Mining (LUN) of Rio Narcea and look at the enormous volume that it has generated and also the fact that it is trading above the takeover price and you get a sense of times we are in.
Then take a look at little GGL Diamond Corp, a penny stock looking for diamonds that accidentally comes across some nickel outcrop…and the stock soars and again take a look at the volume! Why go to the Casino’s when the markets are open...?
We go to analyst Wendell Zerb for a little hand holding on whether we should be a little concerned about the sell off that we usually see this time of year and Wendell suggests that the fundamentals, for the nickel business, look pretty good.
“There is not a lot of supply coming on stream, demand remains strong, there is lots of “spec” money in the market and maybe the correction we had because of the Asian concern in February could have been it!” Zerb says. If there is a correction, Zerb suggests, “it’s usually something coming out of the “wood-work” – “out of left field”, but we are certainly in the time period when we’ve seen most of the corrections,” he adds.
As far as the nickel sector, Canaccord just put out in the last few days an in depth 80 page look at the nickel business and some of the nickel players and most of the names a person should be concentrating on these days. For a look at this report (Mid-Tier and Emerging Nickel Producer Overview – March 28, 2007), which is probably “must reading” given what has been going on, email Sandra Wicks at sandra_ wicks@canaccord.com and make sure you have lots of capacity for the report.
As far as players of a major size, he suggests only FNX Mining and associated Dynatec Corp are probably left as potential takeovers of some size and he also suggests that there is always Sherritt International, but they are in Cuba which probably eliminates them.
For juniors there are other names such as Skye Resources and European Nickel which is developing a project in Turkey. Other names exist such as First Nickel with a small project is seeing some development, but as far as juniors that are in the business of exploring for “what’s next” – GlobeStar Mining remains his favorite story. While he gives it a $2.00 target – the thing about targets is that they are always dependent upon future success or lack of success, which can alter those numbers significantly and what GlobeStar has as a big advantage is being within a few miles away from a smelter in the Dominican Republic. A smelter right in the neighborhood would be a big advantage. For a copy of the GlobeStar report also contact Sandra.
INTL. FRONTIER RES. (V-IFR) $1.28 -0.07
OILEXCO INC. (T-OIL) $8.46 -0.09
CRUDE OIL (May Contract) $64.38 -0.26
Well we may have suggested this Laurel Valley play would be our nominee for one of the high risk/high reward “Plays of the Year” because the target is so big. It is certainly not playing out the way we had expected with the stocks of all the affiliated players actually weakening before results, it’s obviously the world we are in…
When we caught up with Clive Stockdale today for his comments on the play so far, he suggests the bottom line is that sometime as early as next week, he is going to “have to be awfully humble, or awfully arrogant.” The bottom line he suggests is that “they are running a very high powered rig in the North Sea and there is some subtle differences between the way they do things with the rig in the North Sea and what we are used to in Alberta or on most onshore plays.”
This rig is driving ahead full bore, way ahead of schedule and it’s not going to stop when they hit the different zones. It will simply drill ahead, full bore, considering these high priced day rates and then when they hit the depth, they will take a look at the logs and decide what to do next.
As far as all the rumors out about the place so far, Stockdale suggests, “there couldn’t be any knowledge of significance about this play until early next week,” but obviously the market has all sorts of rumors about the play at this point. |
