Dear Subscriber:
The company we are featuring will also be profiled on the award-winning
financial site "HotStock News" as the November Stock of the Month, and will
be uploaded to their website on Friday, November 6, 1998. As a subscriber
to our service, we invite you to read our report with all links at:
pennystockpicks.com
Our featured PennyStock Pick for Thursday, November 5, 1998 is:
LS Capital Corporation
(OTC BB: CHIP)
Bid - Ask: $0.050 - 0.052 (Nov. 3, 1998)
The small cap market as a whole has been battered during much of 1998.
Within this group is another sub-category of small stocks that has been
brutalized. We are referring of course to the mining industry. Our featured
story sheds a ray of light on this mining sector, and manages to allow some
hope to shine through all the dark clouds. As many analysts believe, it is
when stocks look to be at their weakest that they become an excellent buy.
John Schreiner has written a great story about Lexacal's Robert Chase,
titled Picking Up The Pieces
(http://www.pennystockpicks.com/chip-greatstory.html), which explains how
small resource firms can still make a go of it in this incredibly difficult
market, and that strong management is the key to success in this sector.
Now for a closer look at one of these mining companies that have the
potential for a turn-around.
Major Newsbreak
LS CAPITAL ACQUIRES INTEREST IN BROWN's GULCH PLACER PROPERTY IN MONTANA --
Production Test Results to be Released Shortly!
LS Capital Corporation (OTC BB: CHIP) announced on October 22, 1998
that it has completed the acquisition of a majority interest in Brown's
Gulch, a prospective placer gold and garnet property near Virginia City,
Montana. LS Capital has just hired the Wind River Mining & Engineering
Company to conduct a 300-400 ton production test on the property within one
week (if weather conditions permit). Results will be announced as soon as
the test and related assays are completed. LS Capital holds a 100% interest
in the property until LS has recovered its initial investment and a 75%
interest thereafter. WRM holds a 25% after pay-out interest in the property.
The Brown's Gulch is an upstream tributary of the famous Alder Gulch (i.e.,
the richest placer gold discovery in mining history) in the Virginia City
mining District of Montana. Brown's Gulch was previously a placer producer
that has approximately 2,500 feet of unmined material along the gulch and
has significant potential for future production. The region surrounding the
gulch has yielded
more than $130 million worth of nuggets, flakes, and gold dust.
Combining the Brown's Gulch news event with these factors: (1) the stock is
currently trading at all time lows, (2) rumors are that positve results are
pending with some of CHIP'S other projects as well, (3) the resource sector
appears poised for upward momentum, and (4) more news releases are pending
for the next couple of weeks -- we believe that things may be turning
around for CHIP, and the stock price could experience price escalation in
the very near future.
Company Profile: LS Capital Corporation, Houston, TX (OTC Bulletin Board:
CHIP) is a holding company with three junior exploration subsidiaries.
Griffin Gold Group, Inc. "Griffen", Shoshone Mining Co. "Shoshone" and
Desert Minerals, Inc. "DMI" are engaged in the development of a proprietary
microfine precious metal extraction process. The subsidiaries are also
exploring mineral prospects on the Company's various California, Arizona,
and Montana properties. The subsidiaries' objective is to take head ore
containing gold
particles and extract, process, and produce economic quantities of gold and
other precious metals. LS Capital continues to strategically pursue the
acquisition of additional key license areas in the southeastern desert
playas of California. The Cochise Mining Corp. subsidiary plans to conduct
placer mining operations on an alluvial deposit in southeastern Arizona
using conventional mining methods. Click here for a look at the business
and properties of LS Capital
(http://www.pennystockpicks.com/chip-properties.html).
Analyst Reports and Recommendations: Other highly accredited research firms
have recently given LS Capital Corporation a BUY recommendation. There is
no other strengthening endorsement of a company than a recommendation from
a specialized analyst in the gold mining industry like Jay Taylor or a
penny stock analyst like George T. Schlieben of Global Penny Stocks.
Jay Taylor - is a full-time mining analyst at Ing Bank in New York City,
and has been publishing the Gold & Gold Stocks Newsletter on a
monthly basis for almost 20 years. On March 10, 1997, Mr. Taylor
issued a BUY recommendation when the stock was trading at $2.00. In
January, 1998, he issued a Special Report on LS Capital Corp.
George T. Schlieben - is the editor and publisher of Global Penny Stocks,
the First Stock Advisory Newsletter Offered Exclusively On-Line, and has
published a wide assortment of publications on penny and small cap stocks
since the early 1980's. On March 5, 1997, he released a Special Research
Report on LS Capital and issued a BUY recommendation with speculation when
the stock was trading at $0.85 with a target price of $2.50 - $3.00 by the
end of 1997. Shortly thereafter, the stock roared to $2.25. Subsequent
factors such as the BRE-X and Delgratia debacles caused a decline in stock
prices for the mining industry. Soon thereafter, another BUY recommendation
with aggressive speculation was issued by Mr. Schlieben on June 10, 1997
when the stock was trading at $0.75 with a 12-month target price of $2.50 -
$3.00.
Reasons Why CHIP Deserves Investment Consideration:
1. Buy Recommendations - highly accredited research firms, who are
knowledgeable of the Company's future potential, have in the past given LS
Capital a BUY recommendation
2. Asset Play - the Company seeks low-risk, conventional mining properties
such as the Brown's Gulch property, which meets their criteria of having
the potential to produce operating cash flow in the near future Depressed
Stock Price - the stock price is depressed and undervalued based on the
potential of the Brown's Gulch play. Assuming that the production tests
meet their expectations, the stock could very well appreciate from these
levels
3. Patented Technology - LS Capital holds the exclusive license of their
patented technology that is believed to be capable of extracting more gold
from ore deposits than current conventional techniques
4. Significant Factors - as stated above, mark this company as being poised
for price escalation
SEC Edgar Filings: LS Capital has been a fully reporting company with the
Securities Exchange Commission since 1996. LS Capital filings with the SEC
can be reviewed at:
sec.gov
Key Management:
Paul J. Montle - Chairman, President, CEO & CFO of the Company since its
inception in 1992. Mr. Montle has served in top management
positions for corporations in a variety of fields from bio-medical to
financial. Most noteworthy is his tenure at Yankee Cos, an oil and gas
marketing company. Mr. Montle started the company in 1977 on a shoestring,
then developed it into a $328 million sales company by 1986.
Kent Lovelace, Jr. - Director of LS Capital since August 1993. Mr.
Lovelace has served as President and CEO of Equitrust Mortgage
Corporation, formerly Hancock Mortgage Corporation, for over two
decades.
C. Thomas Cutter - Director since 1992. Since 1968, he has been
President of Cutter Fire Brick Co., which repairs and maintains industrial
heat enclosures. His company sells supplies and equipment to the gold
mining industry.
Richard Lancaster - President & CEO of the Mining Subsidiaries is a
registered Professional Engineer and a former Shell Oil Executive.
Recent Press Releases:
10/22/98 -
LS CAPITAL ACQUIRES INTEREST IN BROWN's GULCH PLACER
PROPERTY IN MONTANA, Production Test to Begin Shortly
10/14/98 -
LS CAPITAL REPORTS EXTENSION OF DUE DILIGENCE PERIOD ON
PROSPECTIVE ARIZONA PROPERTY ACQUISITION
10/12/98 -
LS CAPITAL IN FINAL NEGOTIATIONS TO LEASE MONTANA
PLACER PROPERTY
10/07/98 -
LS CAPITAL REPORTS FISCAL 1998 YEAR END RESULTS
08/17/98 -
LS CAPITAL ENCOURAGED BY SECOND ASSAY RESULTS RECEIVED
BY INTERNATIONAL STAR ON WHITE HILLS PROPERTY, LS Capital
in Agreement to Acquire Adjacent Property
07/30/98 -
LS CAPITAL ENTERS AGREEMENT TO ACQUIRE MINERAL LEASE
HOLDING AND MINERAL INTERESTS IN HISTORIC WHITE HILLS
MINING DISTRICT
06/19/98 -
LS CAPITAL SEEKS TO RESTRUCTURE COCHISE PROJECT
06/05/98 -
LS CAPITAL CORP. APPOINTS NEW MANAGEMENT TEAM TO
DIRECT PRECIOUS METAL OPERATIONS AND FORMS SWM
VENTURES, INC.
For press releases prior to the summer 1998, click here:
lscap.com
Competition and Risk Factors: Investors should be cautioned that purchasing
shares of LS Capital involves a high degree of risk based on numerous
factors including but not limited to: 1) significant competition with
existing and emerging firms currently engaged in the resource sector for
mining precious metals, 2) high competition to obtain favorable mining
properties and suitable mining prospects,
3) uncertainty of future financial results, 4) quantity of mineral
reserves, 5) grade of ore deposits, 6) potential of technological failure,
7) potential changes in mining Laws on various levels (Federal, State and
Local regulations), 8) depressed equity markets for gold mining companies,
9) price of gold, and 10) financing issues to overcome. Outside of these
factors, management feels the
potential for capital gains appear favorable. However, investors are
cautioned that this is a speculative investment and is appropriate only for
those who can apply high risk capital to the purchase of LS shares.
Corporate Financials:
Shares Outstanding 13.9 million
Shares Float 7.5 million
Market Capitalization $624.0 thousand
52-week Range $0.031 (low)- $0.922 (high)
Recent Price $0.050 (bid) - 0.052 (ask)
Sales (ttm) $238.0 thousand
Total Cash (mrq) $22.0 thousand
Industry Gold & Silver
Sector Basic Materials
Abbreviations: ttm = trailing twelve months, mrq = most recent quarter
(Mar. 31, 1998)
Primary Contacts:
Company: Broker/Investor Relations:
LS Capital Corporation OTC Financial Network
Paul J. Montle, President, CEO Mario "Ike" Iacoviello
Tel: (281) 398-5588 Tel: (888)356-2387 or (760)931-9211
Fax: (281) 398-5838 Fax: (760) 931-9239
Website: lscap.com E-mail: mailto:ike@otcfn.com
Investors are welcome to contact LS Capital Corporation at:
lscap.com
A Fax-Blast is being distributed to numerous stock brokers in the U.S.
beginning November 6, 1998! You can view the fax-blast at:
pennystockpicks.com
Conclusion: Combining the Brown's Gulch news event with the fact that: (1)
the stock is currently trading at all time lows and at low P/E multiples,
(2) the resource sector appears poised for upward momentum, (3) potential
exists for favorable production test results, (4) the Company seeks
low-risk, conventional mining properties having the potential to produce
operating cash flow, and (5) its stock price is depressed and undervalued.
We believe this is a turning point for CHIP, and the stock price could
appreciate from these levels in the very near future.
Technical Analysis
Our interpretation of the technical position of LS Capital (CHIP) indicates
that their stock price is highly undervalued. The 52-week high for CHIP is
$0.922 and 52-week low is $0.031. The stock currently trades at about
$0.050. The chart history (http://www.pennystockpicks.com/chip-chart.gif)
shows that the stock price has been declining since 1997. This decline is a
reflection shared by many mining companies in the resource sector. The
stock price appears stable and drifting above a level of support at about
$0.04. We believe there is minimum risk to the downside at the current level.
Looking at the three-year chart history
(http://www.pennystockpicks.com/chip-3years.gif), there were periods of
rapid price escalation throughout 1996 and into 1997. If the price would
have held at these levels, this report would not have been written today.
The pursuit and goal of company management is to seek low-risk,
conventional mining properties, such as the Brown's Gulch property, which
meets their criteria of having the potential to produce operating cash flow
in the near future and other significant factors as previously mentioned.
Therefore, the price should begin to appreciate in the near future. Levels
of resistance (i.e., higher price barriers) are not interpretable based on
recent trading history.
PennyStock Picks believes the Company is highly undervalued based on the
Company's present business plan and the stock is currently at a very
favorable buying price. Investing in this company involves some short-term
risk if the resource/mining sector remains depressed or due to other
unforeseen circumstances as previously mentioned in the competition and
risk discussion. Our best judgement of the short-term (three months) target
price is $0.15 (~ 200% higher than today's prices), and a conservative
long-term (6 months to 1 year) target price of $0.20 (~ 300% higher).
Disclaimer
© 1998 PennyStock Picks. All materials presented on our web site and
individual reports released to the public are not to be regarded as
investment advice and are only for informative purposes. Before making a
purchase or sale of any securities featured on our web site or mentioned in
our reports, we strongly encourage and recommend consultation with a
registered securities representative. This is not to be construed as a
solicitation to buy or sell securities. As with any penny stock, companies
we select as our stock picks involve a high degree of investment risk and
volatility. All investors are cautioned that they may lose all or a portion
of their investment if decide to make a purchase in any of our stock picks.
It should be understood that there is no guarantee past
performance will be indicative of future results. The accuracy or
completeness of the information on our web site or within our reports is
only as reliable as the sources they were obtained from.
PennyStock Picks may hold positions in securities mentioned herein, and may
make purchases or sales in such securities featured on our web site or
within our reports. In order to be in full compliance with the Securities
Act of 1933, Section 17(b), PennyStock Picks received a modest fee of US
$2,500 cash from the Company as compensation for its efforts in research,
presenting, and disseminating this information. For more information,
please read our company background and compliance information at:
pennystockpicks.com, and compensation
information at: pennystockpicks.com
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