₪ David Pescod's Late Edition December 28, 2007
LATIN AMERICAN MINERALS (V-LAT) $0.97 -0.13
The chart of Latin American Minerals shows just how brutal some of the junior mines have been hit over the last couple of months in a correction that has really not made all that much sense to us.
With India and China booming, how come so many resource stocks have been hammered...but there you go. We’ve had one of the biggest corrections in the resource sector we’ve ever seen, at a time that we simply shouldn’t have.
But enough of the whining Dave and onto Latin American. How about that chart, eh? As you’ve noticed, the stock was halted on the 18th of the month because they hit some visual gold on their drilling and that’s the kind of stuff that gets people excited. If you go to their website at www.latinamericanminerals.com, you can see what the core looks like first hand and it is kind of tantalizing.
One of the very big owners of the stock, Kevin MacLean of Sentry Select has also had a look and of course it’s a little more important to him than some of us. Their fund is one of the biggest holders of Latin America and I suspect they weren’t too happy to see the stock get clobbered and they’ve got to be a lot happier today.
When we got a hold of Kevin, he suggested that he’s quite happy with what he can see of the visuals and he would be very disappointed if it doesn’t run at least a quarter ounce per ton gold and he also suggested there’s silver kickers and might be some others as well. He would be hoping for a million ounces so far in the projects success.
Others suggest to us that with almost 4km of the zone outlined so far and extending for almost 8km, when the assay results do come in, those numbers will be very, very important.
We get a hold of Ray Mitchell, the CFO for Latin American Minerals and ask him about the guessing game on the visuals. He says, “Hey, I’m a bean counter. To me one plus one is always two.” He doesn’t make any comments at all about the visuals. As far as the length of the zone they are working on, he suggests that it could be as long as six and others are using the map as if a vein does split in two and hence come up with 8km of the potential stuff.
Of interest to us, was that Mitchell suggested that when they announced those visuals of gold being discovered, he suggested they were getting just as many calls about their Rio Tendal zinc project in Argentina as they were about the gold discovery. He gives us a little history...back when Latin raised their money in the spring it was to start work on their zinc project in Argentina which because it appeared more obvious from surface, was expected by many to be there more significant play and it was expected to be drilled by October.
That didn’t happen and now they won’t be drilling until some time in January.
The money raised, they are expected to also add additional properties. The big question for Latin American going forward is still, how sweet those assays could be that range from 3 metres from 10 metres in widths, which is pretty good stuff. Mitchell suggests that these are a different type of assay they are working on, so they don’t expect them back until somewhere between January 15th and January 30th. Obviously, there is a little suspense waiting for these numbers.
One last point about this whole Latin American piece though, is just how bad the sell off in the mining sector has been. We’ve mentioned many times over the last few months, it’s one of the worst corrections we’ve seen in decades and didn’t make sense with the boom in commodities throughout Asia. But that’s the markets for you.
Just when you think you should be seeing Santa Claus, it’s another reality you see.
Which gets us to Kevin MacLean of Sentry Select and in particular his Primary Metals Fund. As we said, how bad has this market correction been? Well Kevin is considered by many (including us) to be one of the better money managers out there in the mining sector, but for those who participated in the recent financing of that fund at $10.00 a share, you recently saw those units trade as little as $6.00. And that just tells you how ugly it’s been.
Of course for those looking to take advantage of situations like this, this could be a heck of an entrance point if you believe people are still going to need stuff like nickel, copper, uranium, etc.
CANDAX ENERGY (T-CAX) $0.91 +0.01
We continue to follow Candax Energy, mainly because of one of our favorite oil and gas analysts John Clarke, an award-winner in his field, had one of those decisions a few years ago that just maybe he might think about some from time to time. Instead of critiquing other people’s work, he decided to join the team of Candax and so far, the major word to describe Candax over the last few years has been delays!
They give an update on December 21st and unfortunately, part of that problem still surrounds the company. They were expected to install some offshore production facilities at their EBB-4 location and tie in the oil and gas pipeline. But unfortunately, due to tough weather conditions over the last month, the tie in of the oil and gas pipeline has been delayed by four weeks...which of course is the bad news.
The good news that they’ve updated the market on their second development on the El Bibane project which is offshore Tunisia, “was successfully drilled to a total depth of 2250 metres, logged and the interpretation indicated that the porosity and hydrocarbon saturations are the best seen in the field to date.”
They suggest the well “will be perforated through casing and completed as a gas injection well which will ensure improved recovery of condensate from the gas cap.”
So far Candax has discovered quite a bit of the nice stuff in Tunisia...and some day soon, should be able to produce a bunch of it. Stay tuned!
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