Subject:
Stockwatch: NDU Resources Ltd - Street Wire
Date:
Mon, 12 Jan 1998 12:59:37 -0800
From:
newsout@canada-stockwatch.com
To:
dmcrobb@osg.net
The quirky performer
NDU Resources Ltd NDU
Shares issued 10,045,182 Jan 9 close $0.70
Mon 12 Jan 98 Street Wire
by Stockwatch Business Reporter
The junior resource market may be in the throes of a nasty bear market, but
there is still money to be made in the juniors favoured by newsletters if
first you pick your newsletter well, and then buy only its right few
favourites.
One such example is NDU Resources, which was picked late last year by
letter writer John Kaiser and which at the close of trade on Friday,
January 9 was up a quirky 94 percent from the time Mr Kaiser recommended it
on December 1: $0.70 versus $0.36.
The tip came in his annual list of 100 bottom-fish carried in the
September-December 1997 issue of the Kaiser Bottom-Fishing Report. At the
time, Mr Kaiser said the stock would do well if a merger plan goes ahead
with financially troubled United Keno Mines. As fortune would have it, the
merger plan was announced on December 19, in which shareholders would
acquire 1.35 shares of United Keno (UKH) for every one share of NDU.
Alan Archer, CFO of NDU Resources, agrees the stock's recent performance
can be attributed to the merger agreement. The deal, which has not yet
received shareholder or regulatory approval, will permit the acceleration
of the development of NDU's Marg VMS deposit in the Yukon. The melding of
assets comes from the marriage of NDU's Marg deposit and $2 million working
capital with United Keno's mill at its nearby Elsa property. Elsa is a
defunct silver property that United Keno is attempting to rehabilitate and
return into production. Mr Kaiser also likes the fact that NDU owns
outright the Marg deposit.
Mr Archer -- also promoter Archer -- says there may be more upside to the
stock given the terms of the merger. NDU is still trading at a discount to
the value implied by the merger arrangement. United Keno closed on January
9 at $0.70 -- exactly on par with NDU. By the terms of the merger
agreement, however, NDU should trade at 1.35 times that of United Keno.
"It's not doing that and it puzzles us why it doesn't do that," he says.
"The only thing I can think of is the investors aren't paying any attention
to it or the brokers aren't paying attention, or they believe there's
enough risk involved that they're not going to give it full value."
Mr Archer adds that a further bullish factor is that United Keno's Elsa
mine is fully permitted. "That's the hardest thing to do these days," he
contents.
As for stock picker Kaiser, his 1998 portfolio has the benefit of making
NDU and his other 99 recommendations near the end of a months-long slide in
the junior resource market, which was sparked by the Bre-X scandal and the
plunge in gold prices. Many of today's penny stocks were trading in the
multiple-dollar range less than a year ago, and that fact is not lost on
tipsters that focus on the lower end of the stock game.
The year 1997 was also not kind to Mr Kaiser. His picks of December 23,
1996 were down substantially by the end of 1997. Once his sells had been
made and the holds transferred over to his 1998 portfolio, his 1997
portfolio was down by around half (as of January 9.)
This year, the California sun is once again shining on the Moraga-based
writer, who has managed to do much better than the VSE composite index. His
1998 portfolio, which started on December 1, 1997, had gained 6.91 percent
by the close of trading on January 9 after a little more than five weeks,
including his No.1 dog, Moss Resources, which was down 75 percent as of
last Friday. By contrast the VSE index, which stood at 636.99 on December
1, was down 45.8 points or 7.1 percent, to 591.19 on January 9.
So, today how is quirky NDU? By midday it had lost $0.09, leaving it at
$0.61. All it now needs is for a seller to happen along and pop the $0.50
bid with a board lot, and the stock would be down $0.18.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
