SVU-Spur Ventures could be the hottest stock this year.They are in
the finishing stages of their final approval from the ministry of mines of China to develop
their massive phosphate deposit in China.They have $3 million in cash and receive
revenues from
Berkeley Petroleum.Major institutions have approached management expressing an
interest for a financing.Short term this stock will be $1.50 long term $6-$9.
Global Securities who did $2 000,000 private placement at 0.85
last year. Spur ventures Inc. will eventually promote its project
when production begins.Here is a strong buy recommendation from
Global Securities.
We are confirming our buy rating on Spur Ventures Inc. SVU-VSE
phone 604-689-5564 as a speculative stock for aggressive investors.
Spur Ventures is a Vancouver based resource company that's
developing a massive phosphate deposit in China in a joint venture
with the Chinese government.
The merits of this project are truly exciting, and we have upgraded
our 12 to 18 month target price to $9 from $6. The longer term could
show significant gains from there.
Under an agreement with the Chinese government, Spur has exclusive
right to develop the massive Yichang phosphate deposit in Hubei
province for 40 years. The deposit, 70 kilometers long and four
kilometers wide, has proven and probable reserves of 396 million
tonnes of ore, at an estimated average grade of 23 per cent phosphate
oxide.
Fifteen per cent of the ore reserves have grades in excess of 30
percent phosphate oxide. By comparison, the world average grading is
about 15 percent. This venture represents the first major phosphate
mine to be developed by a foreign firm in China.
The three primary fertilizer chemicals are nitrogen, phosphorous and
potassium. Phosphorous helps plants resist disease and overcome cold
temperatures. It is also critical for photosynthesis, root growth,
cell division and fruit and seed production.
About 90 percent of all phosphate is used in fertilizers, mainly for
corn, wheat and soybeans.
Phosphate demand from the Chinese agriculture market already accounts
for 25 percent of the world consumption, and is growing
rapidly. The Yichang deposit will serve the largest phosphate
demand region in the world, at a significant cost advantage.
Spur sees no need for financing until late 1997, as the capital
outlay for the pre-feasibility and the feasibility study will only
be $700,000. Current working capital, revenue from Berkley
Petroleums, and the exercise of outstanding warrants can cover
financial needs until construction begins.
The remaining risks, as we see them, are that Spur's management
has to obtain written approval from the various levels of government
even though the joint venture partner is itself an arm of the Chinese
government.
The project is not in conflict with any government policy, and
management expects these approvals to be matter of paper work.
The government encouragement that the project has seen so far
supports this view. |
