₪ David Pescod's Late Edition September 27, 2007
“TOP TEN?”
Back on June 29th, we took a look at “our ten favorite junior stories” and gave a quick look at the different stories, mind you why we would be publishing something like that when we’ve written for months that we were expecting a correction defies logic. And then of course the correction came and it was much more than a correction wasn’t it. Many interesting stories lost 50% of their value and some in the uranium sector hit the toilet even worse than that. As we review some of our favorite stories now, we note that there’s still two sector having a very tough time.
Uranium stories were some of the biggest winners earlier this year as the price of uranium over the last 3 years went from roughly $10.00 to as much as $135 before correcting significantly. Once the utilities get back into the buying mood again, probably in two to three weeks time we’ll see if that sector is going to come back.
Meanwhile, natural gas looks like a disaster unless we get a really cold winter or a couple hurricane into the gulf of Mexico.
Drilling costs in Canada remain very high and if you do find something suddenly your cost are in Canadian dollars and your revenue in American dollars which suddenly isn’t as advantageous at all.
With the near record inventory sitting there unless there is a cold winter we could see natural gas companies forced to merge or face something worse…Anyway, here are some updates on some of the stories of June 29th:
CGX ENERGY: The news is out and it looks like CGX Energy got most of what they were hoping for in off-shore Guyana that was settled in to the debate of where the border line is between Suriname and Guyana. That means they have something between 8 and 12 targets possibly more, but two of the targets Wishbone and Eagle are two of the biggest targets you can find anywhere in the world.
The easy money has now been made and (and it was a nice double) Kerry Sully and team now have to get working on some seismic and do some deals to find out how much they’re going to have for ownership on some of their plays, and then of course find some rigs.
What’s not getting talked about is that the north end of Guyana where in the Deltona platform area, some of the worlds biggest natural gas discoveries are being made and guess who owns the off-shore land just south of that area offshore Guyana “little CGX.”
CONNACHER/PETROLIFERA: While Connacher is up a little bit from June 29th and Petrolifera down just a bit they still remain two of our favorite stories with a bit of a difference.
Whatever the Alberta Royalty decision is it could have a bit of an effect on Connacher but now that they are finally steaming, the next three months should provide a little bit of joy.
Meanwhile, for those looking for big big targets, Petrolifera will be the story of the day next year. For 2006 they were one of the success stories of the year as productions in Argentina went from virtually zero to almost 10,000 barrels a day. In Peru they have targets that are so enormous it’s almost hard to comprehend, but just when they’ll get around to drilling remains a question mark. Most suggests it will be early second quarter. Go to www.petrolifera.ca and key in on their Peruvian assets.
CORRIDOR: Has been one of the success stories of the last while and who would have thought natural gas would be discovered in big quantities in New Brunswick, but there you go.
Andy Gustajtis was the analyst that talked us into this story and now the problem is natural gas prices; they’re terrible and inventories remain big and one of the concerns is the massive amounts of LNG landings from foreign sources in North America.
Drilling on both PEI (we have little hope for that) and deeper at Corridors McCully target will determine whether Corridor has got more room to run or whether what we’ve seen is what we end up with.
ITHACA ENERGY: Is in the North Sea and so far they are two for two. Sometime in the next few days we’ll know whether it’s the three for three...or not. They also have two other significant targets which will be drilled by the end of the year and needless to say if successful it will make a difference, potentially a big difference to their stocks.
The major difference is super successful Oilexco analyst Fred Kozack who now follows this stock and for those looking for a copy of his report on Ithaca email Jenn at Jennifer_Lagdamen@Canaccord.com .
SELKIRK METALS: If you’re looking for a chart that shows how the last few months shows much more than a correction, take a look at the chart on Selkirk ... it was almost halved...
Recent drilling has come out with what looks to be a parallel zone and if so that has immense implication for tonnage on their Ruddock Creek project in British Columbia.
An analyst visit which has been scheduled for mid October we suspect is going to start attracting more attention, could also attract more analyst attention in the markets.
The top pick of our Mystery Mining Man.
ANDINA MINERALS: Once again a chart that shows you how some of the mining stocks got clobbered in this little correction we’ve had recently. Andina is now back to work on their Volcan project in Chile and over the next few weeks we would expect new reserve numbers and just as importantly some metallurgic data.
This is high up in the Andes at around 13 to 15,000 ft with relatively low grade, but there’s some significant operators in the area such as Meridian that manages to make huge profits on what use to be considered low grade. If the numbers are there, we suspect this becomes a takeover story.
For those looking for additional information on this play contact Jenn at Jennifer_Lagdamen@Canaccord.com for Canaccords analyst Steven Butler, look at his story plus his $7.00 target.
MARCH RESOURCES: Is relatively flat with its price back in June, but now drilling equipment is on its way to Chile where it will be drilling a natural gas target. Natural gas in South America is totally different from that in North America ... they need it badly in many areas of South America particularly in places where they’re having blackouts in some industries in Argentina that have had to shut down and Chile is desperate for it as well.
The target is an enormous one and we suspect people will care when they spud this play, probably in about a month and a half. There are some very interesting families involved behind this story so we suspect they’ll do their best by getting this story out.
TOURNIGAN GOLD: has been a favorite of Canaccords analyst Tony Wallis and once again the chart shows you how bad many uranium stocks have been clobbered over the last while.
Tournigan is a little bit unique with its gold and uranium assets both in Slovakia, a country that is small but dependent on uranium as two of its Russian style reactors provide much of the power for the country.
Over the next few months expect the company to be broken up in two, the uranium entity plus the gold entity and I suspect the gold bugs will get what they want as well the uranium ones.
That alone should give a boost to this stock and if uranium prices start recovering in October/November that will be quite helpful as well. For a copy of the latest report on Tournigan email Jenn at Jennifer_Lagdamen@Canaccord.com .
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