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To: ms.smartest.person who wrote (1068)	5/10/2006 9:06:25 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition May 9, 2006 CANDAX ENERGY (T-CAX) $1.57 +0.17 OILEXCO INC. (T-OIL) $5.68 -0.17 Our congratulations to Fred Kozak, the oil & gas analyst at Haywood Securities who was just announced as one of the top oil & gas analysts in the country. Some comments he is making on a couple of junior oil & gas stories these days are needless to say, moving some stocks. Ironically one of those stocks is Candax Energy, who has as one of its leaders—John Clarke, who was formerly (for two years running) the number one oil & gas analyst in this country….and then he ruined that to see if he couldn’t create his own dynamic company. What Kozak is saying about Candax is interesting, because while he has a published target price of $1.25 it’s posted as “UNDER REVIEW” and what he writes is: “We have conducted a review of the upside potential from a successful gas discovery at Chaal and find that a conservative view of 200 bcf of reserves at Chaal would see an increase in value to approximately $1.80 per share.” “We note that the increase is based on existing proven plus probable reserves that were evaluated using much lower prices than the current commodity price environment. Also Candax has additional upside from gas in Tunisia. First, there is a possible reserves of up to 844 bcf at Chaal, as well as the reserves potential from two deep Triassic prospects at El Bibane……...Combined, the risked success of all these prospects indicates a value of as much as $3.00 per share for Candax.” Meanwhile, some comments Fred made yesterday on Oilexco are equally interesting after the discovery on the Disraeli block. He writes, “Valuation: Our target price of $8.00 represents a 3.5x multiple of 2007 before-tax fully diluted cash flow per share (changed from after-tax). This is a conservative approach, and we note that the upside potential is still significant. We also note that other international producers command multiples as much as 10.0x CFPS (cash flow per share).” If you would like to receive a copy of Fred Kozak’s report on Candax Energy or Oilexco, email Sandra at sandra_ wicks@canacord.com and she will send it off to you. STEALTH VENTURES (V-SLV) $2.71 +0.16 We had featured Stealth Ventures as one of our “lottery tickets” in our “Lottery Portfolio” a few days ago and its had a bit of a bump of recent. Remember, when we say “lottery ticket” it’s because we have big expectations for these stories, but have to recognize that there is “HUGE RISK” involved! Not many “lottery tickets” are cashed in! But, Stealth Ventures has had a bit of a bump that President Rob Bell describes as an “activity bump”. We ask him for the time frame for developments for the company over the next while and he is quite obliging. Currently all the rigs and service rigs have arrived in Nova Scotia on their Cumberland & Stellarton coal bed methane plays and they should be up and operational by the end of this week – if not for surely next week. Then they should start drilling, which will take two to three weeks for the first hole and then a month of accumulating data on what ever their flow-back rates might be. In other words, around July 1st we’ll have an idea if they are on to something big on these CBM plays…...or not. He does admit, though, that from time to time they will have to twig these plays, but still we are not that far away anymore from getting a taste of what results might be. When we ask Bell for a stock pick and we reminded him that we are “fearless”…...he ironically picks another “lottery ticket”…..Corridor Resources (CDH). Again, Corridor is developing their McCully play in New Brunswick, which should have pipelines built by the last quarter of this year, but the excitement is when they drill the Dawson Settlement Sands around Christmas time…...and the target is enormous, but is it there? GOLD $699.40 +18.10 YUKON ZINC (V-YZC) $0.62 -0.33 STRATECO RES. (V-RSC) $1.40 -0.35 CROSSHAIR EXPL. (V-CXX) $1.61 +0.06 It’s a busy day in the junior mining exploration business, with a handful of companies reporting drilling results. Creating even more interest, though, is the huge move in gold today as it broke $700. We ask David Coffin of the Hard Rock Analyst, where’s that correction in gold prices we have been expecting? (He is also concerned about how things have gone almost straight up….) “Profit taking right now is more important than buying new stories”, he suggests and with gold making a big move he’s even more worried about the huge run in copper prices. “Could easily be a 50% correction in copper prices.” As to specific stocks, he points out that Strateco did come out with some pretty good results today, but suggests that with all that cheap stock out there plus the old “sell on news” syndrome it has probably affected it negatively. Also Yukon Zinc coming out with a feasibility study that wasn’t as good as hoped for, he tells us that will probably mean that people are going to start looking for a new zinc play down the road. (We point out that Crosshair also had some drilling results, but Crosshair is such a big property with so many individual pieces...it’s going to take a while to put this package together.) While Coffin suggsets that it is more important to be taking profits then buying right about now, we still ask the question, if he could only buy one….Selkirk Metals is still his favorite pick! www.stealthventures.ca Disclosures: Oilexco: Canaccord Capital covers this stock and has a Buy rating on it. (Buy: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.) Candax Energy: Canaccord Capital covers this stock and has a Speculative Buy rating on it. (Speculative buy: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss.) Canaccord has recently led a financing for Candax Energy. Canaccord has recently participated in a financing for Corridor Resources. If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com