₪ David Pescod's Late Edition April 12, 2007
AURELIAN RESOURCES (T-ARU) $35.49 +3.14
CORRIENTE RESOURCES (T-CTQ) $3.71 +0.38
COASTPORT CAPITAL (V-CPP) $0.56 -0.08
PLEXMAR RESOURCES (V-PLE) $0.40 +0.065
GOLDMARCA LIMITED (V-GML) $0.56 +0.01
Bloomberg reports that Ecuador’s bonds are rising to the highest level they’ve been in four months, they report that it’s because concerns are abating that President Rafael Correa will allow Ecuador’s bonds to default.
A country with $10 billion in debt has created quite a stir, particularly in mining circles as there were concerns that the new left-wing President might default on debt plus also change the way the mining business in carried on in the country. And the charts on many mining stocks there shows that it was much bigger than a correction.
Now however, it looks like things are going much better as Ecuadorian-based mining stocks are having quite a day. This doesn’t mean things are straight forward though and still aren’t in the country because there is still the referendum this Sunday to vote about the writing of a new constitution.
To show you the confusion, 57 congressmen were fired by the country’s supreme court on March 7th and what next is still open to debate.
But mining is something that could give this relatively poor country a heck of a boost and I’m sure mining companies wouldn’t even mind paying higher royalties to get things going again.
The move in Aurelian Resources today shows an infectious optimism and Eric Coffin of the Hard Rock Analyst suggests that he doesn’t expect to see Aurelian around within the next four or five months suggesting it’s an obvious take-over target and he feels that if it sells for anything less than $45.00 it would be because of the concern about politics.
BEAR CREEK MINING (T-BCM) $7.21 n/c
With the take-over game starting to heat up, accompanied by higher commodity prices virtually every where, the question becomes who is next? Yesterday, Lundin Mining announces a take-over of Tenke Mining, as well as Lundin’s take-over of Rio Narcea (April 4), and again these days apparently it is much easier to buy someone else then go out and find a potential mine yourself!
When we try to figure out who might be next on the radar screen, there is one company that might be obvious and that’s Bear Creek Mining. They were one of the success stories of the mining sector last year – led by super star mine finder Catherine McLeod-Seltzer, but the stock has drifted off recently as they have been waiting for scoping studies and other work that might suggest what the company could be worth to a potential suitor.
Today, Canaccord Capital’s mining analyst Graeme Currie writes, “Bear Creek is in the midst of completing ongoing drilling at Corani coupled with further metallurgical testing and preliminary economic analysis with the objective of completing a scoping study in late Q2/07……
The company initiated Phase II metallurgical test work to provide further definition to the mineral characteristics of the Corani Ag-Pb-Zn resource…….” He continues, “The Phase II metallurgical test results are required to define the process flow sheet in order to complete the study.”
Bottom line is that Currie suggests that Bear Creek is a “speculative buy” with a revised potential take-over price of $11.60 – down a bit from $12.20 a share ……… Who might be a potential take-over candidate? Well, Silver Wheaton already owns roughly 19% of the company, so they might be first. When asked to admit that gold and silver these days is the weak-sister, as everyone is chasing moly, uranium, nickel to you name it but we wouldn’t be surprised to see that change over the next while.
Bear Creek does have it’s fans, as Sprott Securities recently had a target on the stock as high as $14.50 and Andrew Kaip of Haywood fame has it has one of his favorite picks with a target of $12.70, which would give it a nice leg up from current levels.
Two tidbits on the financial wires yesterday, not about individual stocks, but about something of current interest. First of all the Associated Press and in particular, The Seattle Times, reports a connection between the mansion that the president of the company you invested in and how well the stocks of that company might be doing suggesting that, “The bigger the CEO home, the worse the company’s stock fares.”
One example that was used was the 30,000-square-foot mansion Robert Nardelli, former Chairman and CEO of Home Depot bought after his hiring. During his six-year watch, Home Depot stock fell more than 3 percent.
The 30,000-square-foot mansion Robert Nardelli, former chairman
and CEO of Home Depot, bought after his hiring. Under his
six-year watch, Home Depot stock fell more than 3 percent.
The other tidbit might be a little more scary and it’s a sign of the times, at least in the United States. Reuters News Agency reported and we quote, “As thousands of homeowners in the United States are realizing it’s unwise to borrow more than they can afford, the National Association of Securities Dealers is offering a similar warning to investors: It’s risky to invest more than you have.” Reuters was reporting on record amounts of margin debt now owed by those playing the stock market.
There is now a record amount of debt taken on by investors to buy securities known as buying “on margin” has soared to $320 billion in February. That topped the previous record of $299 billion set in March 2000 at the peak of the last bull market when the internet craze was at its silliest ... Correction coming?
If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com |
