₪ David Pescod's Late Edition October 11, 2007
BEAR CREEK MINING (V-BCM) $8.05 +0.20
AQUILINE RESOURCES (T-AQI) $10.90 +0.42
MANTLE RESOURCES (V-MTS) $1.17 +0.02
GENCO RESOURCES (V-GGC) $4.00 +0.13
SELKIRK METALS (V-SLK) $1.02 -0.06
After two weeks away, it’s nice to be back and getting caught up on things and particularly on a day like this, when you are welcomed with a $2.00 move in oil and a $6.00 move in the price of December gold.
However, one thing stands out when you are following commodity prices these days in the metal sector and that is lead. Who the heck would have ever thought that lead, whose only major use is that of being in batteries, would be the one commodity that just keeps chugging? But we are not one to question things, we just want to know how a person might be able to make a buck.
So we go to mining analyst Andrew Kaip with Haywood Securities and ask him which mining plays he would be looking at for the lead component. He starts his list with Bear Creek Mining and their Corani project in Peru which most people think of as a silver play, but he points out that they also have 3.2 billion pounds of lead so far in reserve and he has a target of $11.00 and wouldn’t be surprised to see the company taken out sometime soon.
As a second pick, he goes with Aquiline Resources for their ownership of the old Navidad property in Argentina which has been disputed with IMA Exploration for some time. But again, it’s a silver play that has a huge lead component suggested close to three billion pounds and three billion pounds of lead at these prices, is worth a lot of money. (It also is a potential takeover candidate).
Another pick that he says people could look at would be Mantle Resources, which has just seen a significant change in its management team as Jim Mustard (Haywood’s former analyst) has joined them as the new company president.
Meanwhile, as far as something new, he suggests if you are looking for a great silver play he has just issued a report on Genco Resources with a $7.00 target, which has obviously captured the market’s attention over the last day or two.
(As far as lead/zinc plays, we would also suggest that over the next six months, Selkirk Metals could also create some activity for its Ruddock Creek property in B.C.)
TUSK ENERGY (T-TSK) $1.67 +0.02
What an ugly, ugly chart don’t you think? Give it a little thought though and you probably know what industry they are in...well, yes, Tusk Energy is in the business of natural gas which in Canada these days, has super high costs and natural gas prices are in the tank. Now to make it worse, the Canadian dollar continues to rise making the economics even worse.
The stock did have its first bounce in ages though yesterday, when they announced that they’ve lined up a $75 million credit facility which comprised of $60 million in revolving/operating line and a $15 million acquisition/development line.
According to the announcement yesterday, this enables the company to fund its capital expenditure plans for the next six to 12 months.
This was a former top pick of one of our favorite oil and gas guys Clive Stockdale and also a top pick of Alex Squires of Brant Securities (his other pick of Oilexco has done much better, don’t you think?)
About the only thing one can say about Tusk and many other gassy stories is that suddenly you are hoping for sanity in the Alberta Royalty Review and a cold winter.
EXXEL ENERGY (V-EXX) $0.69 n/c
Is this not an ugly, ugly chart? Yes, you’ve probably guessed again—it’s natural gas. The only difference is that this is in the United States.
This junior explorer yesterday announced an update on many of its projects and they have projects in some of the more interesting areas of the western United States including the Greater Green Basin in Wyoming, the Williston Basin in North Dakota and the Piceance Basin in Colorado.
But for the high risk/gung-ho player, the reason you are following Exxel Energy (like Delta Petroleum) is for some tidbit of information about what has been found or not found in the Columbia River Basin area of Washington, an area that many analysts had had high hopes for years ago (the good people at Sprott Securities own as much as 5 million shares of Delta Petroleum for the Columbia River Basin play) but so far there’s no talk at all about the Columbia River Basin from anyone, despite two and a half years of work in the area by such biggies as Encana, Delta and Shell.
Victor Barcot of Exxel Energy does tells us though that for those who still do have hopes for natural gas, it’s expected that Encana may finally make public what they may have found or not found in the Columbia River Basin as early as the last week of this month. Some people have been waiting two years for this news, so needless to say, they are hoping it’s good! Victor tells us there have been two institutions that have been unloading stock, hence its recent weakness.
If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com |
