₪ David Pescod's Late Edition August 30, 2007
CORRIDOR RESOURCES (T-CDH) $10.01 +0.21
This is a pretty decent chart and it shows that Corridor Resources hasn’t suffered as much as most gassy stocks these days, many of which are trading for about 25 or 30 cents on the dollar from where they were a year ago.
High drilling costs, high service costs, high American dollar, extremely low gas prices...it’s not pretty. Corridor does have a benefit in that it’s very close to the prime New York/Boston markets and it’s a short pipeline haul from New Brunswick.
Sometime next week, we should find out whether their first well that could be testing their shale deposit—the Frederick Brook—is commercial or not. If it is, that’s a huge plus for Corridor at a time that natural gas prices are in the sewer.
Once again, news is expected sometime next week and it will be important.
NORONT RESOURCES (V-NOT) $0.78 +0.11
It’s nice to see that a junior mining stock can actually go up and do it on big volume in a market malaise such as this. It seems everyday, the fear evolving around this sub prime mortgage mess and just how big it’s become, is occupying centre stage and what the ramifications might be for anything from banks to brokers to you-name-it , is still open to debate.
But the world does still turn and Noront Resources has been one of the stories of the day the last two days since they announced results on their first two holes of their diamond
drilling program on the company’s Double Eagle project which is up in the James Bay Lowlands of northeastern Ontario. Actually, there are no assays, it’s just based on visuals and that can be troublesome.
While analysts that we talk to suggest that their geological setting is quite interesting, we were also reminded that until you have the real assays, you don’t know what you have.
Noront’s stock also has some gaps that might be filled, as I’m sure you might have noticed from the chart and more than a few people with grey hair do remember another play a while ago based on visuals that didn’t quite work out ... Cart-A-Way Resources.
LAKE SHORE GOLD (T-LSG) $1.45 -0.13
Lake Shore Gold announces their Timmins West prefeasibility study yesterday and we get once again, a reminder that costs in the gold production business seem to be escalating, particularly in Canada.
As Andrew Kaip the Haywood mining analyst writes, “the Timmins West pre-feasibility study outlines annual production of 71,000 ounces of gold over an 11-year mine life...with capital costs estimated at $129 million. All-in cash costs work out to about $US 427.00 a ounce.”
“Costs are higher than expected” he writes, “reflecting industry-wide price escalation” and he lowers his target to $2.50.
But he writes, “However, we view feasibility results as conservative, providing several avenues for future upside to our valuation.”
It was formerly one of his top two favorites and at today’s price, he figures it’s a good bet.
While Kaip lowers his target from $3.05 to $2.50, MGI raises their target from $2.70 to $3.00.
FALCON OIL & GAS (V-FO) $0.58 +0.02
It was back on June 27th, that we mentioned we ‘shorted’ Falcon Oil & Gas and gave our own reasons. Silly us though, we covered that short on June 29th and yesterday, Falcon gave a financial and operational update which obviously the market didn’t care for as it hit new lows on volume of 18 million shares.
In the history of this company, there’s been some absolutely enormous targets given for what they might have in Hungary that seemed absolutely outrageous, but then Marc Bruner has to be given credit for finding some of the more intriguing unconventional gas plays in different areas of the world.
Yesterday’s news didn’t have a lot of hard data and once sentence said it all…“Falcon’s Discovered Resources are not Reserves” and that quote probably says more than enough. So far about the only thing you know for sure is that they’ve got an absolutely enormous half a billion shares outstanding and so far, not a lot to show for it.
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