I found this article on the Winspear thread. It mainly talks about how Winspear and Argentina Gold may or may not help the Junior market. But at the end they mention Peruvian Gold, which at least gets the company in the paper.
From today's The Globe And Mail
OUTLOOK JUNIOR MINERS
Major players give lift to miners
Monday, December 21, 1998
PETER KENNEDY
British Columbia Bureau
Major players such as B.C. billionaire Jim Pattison and Barrick Gold
Corp. are sending a whiff of optimism through the battered junior
mining sector by taking positions in companies with promising
discoveries.
But analysts and portfolio managers aren't yet convinced that the recent rise in the shares of companies such as Argentina Gold Corp. and Winspear Resources Ltd. will translate into a broad recovery in the junior end of the market.
"We are becoming a little bit more positive on the outlook for these
stocks but not ragingly aggressive," said Jackee Pratt, a portfolio
manager with Maxxum Fund Management, an arm of Winnipeg-based
Investors Group Inc.
Observers familiar with the junior mining sector say it's impossible overestimate how damaging the Bre-X Minerals Ltd. gold mining scam
has been to investor psychology. Investors lost about $6-billion in May,1997, when Bre-X's supposedly rich Busang find in Indonesia turned
out to be a fraud.
With copper and gold prices in a deep slump, analysts fear that the
bear market for junior stocks could continue for at least another year.
That's why the Chardonnay bar and restaurant and other broker
hangouts in Vancouver were buzzing last week with news that Mr.
Pattison has taken a big chunk of a private share placement that raised $10.6-million for Winspear's diamond projects in the Northwest
Territories.
Sources say Mr. Pattison has agreed to buy two million of the five
million units being offered at $2 and $2.20 each on the advice of Peter Brown, whose Vancouver investment firm, Canaccord Capital Corp.,
acted as lead underwriter in the Winspear financing.
Despite falling 7 cents to $3.08 on the Vancouver Stock Exchange on
Friday, Winspear shares have tripled since mid-October.
Argentina Gold shares have jumped 86 per cent to $5.60 since Dec. 9,
when Barrick Gold Corp. launched a hostile bid worth $134-million for
the Vancouver Stock Exchange-listed junior. Barrick is bidding to grab
full control of Argentina Gold's Veladero project.
Analysts are watching to see whether Adolf Lundin, the Geneva-based
mining promoter who owns about 12 per cent of Argentina Gold, can
ignite a bidding war between two of the junior's key shareholders,
Barrick and Colorado-based Newmont Mining Corp.
But the excitement generated by Barrick's bid for Argentina Gold is not enough by itself to lift the junior mining market out of its current malaise, one resource official said. "We need to see a lot more of them before people are willing to ante-up for these high-risk plays," said Alan Bayless, a spokesman for Aber Resources Ltd., a Vancouver-based diamond explorer. The comparatively weak performance of other Vancouver-listed mining stocks indicates that any optimism that exists in the market is limited to only a few companies.
In spite of the recent rise in the value of Winspear and Argentina Gold,the VSE's composite index closed at 383.63 Friday, just off its record low of 382.50 on Dec. 15. That's down from a high of 1,352.47 in March, 1997.
The VSE is seen as a reliable barometer of market psychology in the
junior mining sector because 828 or 60 per cent of its 1,382 listed
companies are mining oriented.
So far this year, VSE-listed mining companies have raised only
$282-million. That's down from $982-million in 1997 and well below
the record $1.5-billion in 1996."This shows how much the decline in
commodity prices is weighing on investor psychology," said John
Kaiser, the California mining analyst who publishes the bimonthly
newsletter known as the Kaiser Bottom-Fishing Report.
However, penny stock watchers say investors have reason to be
optimistic if only because the value of most junior mining stocks can
hardly go much lower.
"The time to buy these stocks is when commodity prices are
depressed," said Wayne Deans, director of Deans Knight Capital
Management Ltd., a Vancouver money management firm with assets of
$1.5-billion under administration. "We are in one of those periods right now," he said.
Mr. Kaiser believes the entire junior resource sector has become so
oversold that if gold breaks out over $315 (U.S.) an ounce, the VSE
composite index could easily rise 15 to 20 per cent from current levels.
But in spite of the U.S. air strikes on Iraq, gold was stalled at $288.80 an ounce last week and without any sustained rebound in commodity prices, analysts say the bear market for junior stocks could have another year to run. That will make it difficult for companies without attractive properties to raise money for exploration, they say.Portfolio managers seeking to profit from these stocks are selecting companies with cash in the bank, experienced management and
properties with defined mineral deposits. Some of the companies seen
as fitting into that category include Oro Nevada Resources Inc.,
Jordex Resources Inc., Peruvian Gold Ltd. and Madison
Enterprises Corp.
Headed by British Columbia geologist Chet Idziszek, Madison raised
$10-million (Canadian) last June from a private placement for gold
exploration in Papua New Guinea. Its stock has virtually doubled to
$1.97 from $1 in October on the Vancouver Stock Exchange.
Meanwhile, analysts are hoping that Barrick or another major company
will boost confidence and liquidity in the junior mining market by
completing a successful buyout of Argentina Gold.
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