₪ David Pescod's Late Edition November 28, 2006
AQUILA RESOURCES (V-AQA) $1.90 +0.11
ANDINA MINERALS (V-ADM) $2.55 n/c
FRANCONIA MINERALS (V-FRA) $1.40 n/c
It was Andrew Kaip, the Haywood mining analyst that suggested we follow the Aquila Resources story and we are quite happy we did! Those metal grades were tasty and the stock doubled quickly and now they are working on a small financing, which will quiet things for awhile…and then we could see a flurry of information continue once the financing closes.
We should be thankful to Kaip, we should be sending bottles of wine in appreciation, we should be showering his geologist wife (who also likes the story) with flowers and suggesting things to Santa to drop off at their house this Christmas, but evil influences prevail — the phone calls asking, “what does he like now” and “the man is hot, so what is next” are overwhelming!
So we go to Andrew again. “What have you done for us lately and what should we be looking at?” And please, “with what’s going on in Ecuador have you got something relatively safe…whatever safe is?”
The obliging Kaip suggests Andina Resources. Almost two weeks into a big 40,000 meter drilling program on their Volcan Gold property in Chile (and yes, a safe country), he suggests that drilling results should be coming in by Christmas and he has hopes for some decent numbers.
Today we catch up to Andina’s President Carl Hansen and yes, he says they “currently have two drills turning, two more rigs on the way and the 40,000 meter program is one of the biggest in Chile.” Depending on the labs, he expects to see results start trickling in the second half of December or early January.
As for objectives for the company, he suggests that they hope to move their current reserves and inferred numbers up from 2.6 million ounces of gold to 4 million ounces. That’s their target anyway! Hansen reminds us that this is the high Andes (where they are working) where things take a little longer, but they do also have some operational opportunities. Bema Gold, for instance, is a mere 20 kilometers away.
We ask this experienced mining man, Hansen, our favorite question...if you could buy only one other junior mining stock other than your own, what would it be? He suggests Franconia Minerals, a platinum/nickel play that while risky, he has high hopes for.
THE BIG OIL PLAYS: “They are our nominees for the Big Plays”.
These oil and gas plays have high risks, but potentially high rewards. Some of the oil companies involved may have only a one in ten chance of success, but they wouldn’t be spending millions or tens of millions of dollars without hopes for big rewards. We tend to like to get in early and cheap and sell some on the way up...but that doesn’t always work. TG World Energy and Laurel Valley are both almost a year late...Time for some updates!
OILEXCO INC. (T-OIL) $6.97 +0.03
INTL. FRONTIER RES. (V-IFR) $1.24 -0.01
GULF SHORES RES. (V-GUL) $0.63 n/c
International Frontier Resources and Gulf Shores had a very interesting chunk of land they won in auction in the North Sea...but no rigs. Enter Oilexco, which is now the major player in Laurel Valley. Today, International Frontier President Pat Boswell tells us that the Oilexco rig is currently working on Sheryl and expected to work there until December 12th. They had hoped to spud Kildare after that, but Christmas could get in the way and Kildare is expected to take 60 to 70 days. There is a partner meeting on Friday which should clear this up, but it looks like drilling on Laurel Valley probably the biggest of the plays mentioned with a potential 600 million barrel target, could be delayed as late as February. Weather has also caused big problems in the North Sea as the very hostile Sea has been worse than normal and rumors persist of at least one rig being bounced free.
CDN. SUPERIOR ENERGY (T-SNG) $2.28 -0.01
Talking about rigs, it’s been a problem with Canadian Superior Energy as well. The rig they had planned to use was in for repair due to asbestos problems, but a $20 million re-fit has now become $68 million and just when they will be drilling offshore Trinidad is still open to debate. They are starting a 3-hole program on two, 1 TCF targets offshore Trinidad. Trinidad has become a center for the fertilizer business which used to be centered in the Gulf Coast, because they are simply finding that much natural gas for basic feed stock for fertilizer in the Trinidad area. The map beside you shows how much oil and gas is found in this area of the world. Suggested spud date is first quarter 2007.
CORRIDOR RESOURCES (T-CDH) $6.89 -0.16
It surprised people with its discovery of what one analyst suggested as almost 1 TCF so far of natural gas on their Hiram Brook discovery near Sussex, New Brunswick. Last week they spudded a deep hole which will finally test the Dawson Settlement. The Dawson Settlement is about four times the size of the shallower zone and if it’s gas-charged, this could be huge. Cash flow finally happens from pipeline sales in February, which might make a few other followers, believers. Corridor spudded last week and it is expected to take 70 days to drill and test.
PACIFIC ENERGY RES. (T-PFE) $1.40 n/c
We don’t fully understand why they like to be buying some assets of the big companies in environmentally sensitive California, but there you go! What we do know is they’ve got a tough deal with Shell, drilling a target that seismically looks so interesting, a mere 20 miles away from where Ultra Petroleum has been having so much success. Spud date is still December 1st. Target is a potential 4 TCF and PFE has 40%.
TG WORLD ENERGY (V-TGE) $1.80 -0.05
CHINESE NATIONAL OIL COMPANY
Currently at 2300 meters on their way to 3500 meters, this is a multi-zone test in the prolific rift basin area of Africa. Targets are enormous! Witness Talisman’s previous success in the Sudan. Still weeks away from results.
DELTA PETROLEUM (US:DPTR) $29.14 +0.25
It’s taken almost two years and we still don’t know what they’ve got and what some people have high hopes for in the Columbia River Basin. For those who read our interview with Eric Sprott, you know that he told us if he could only buy one stock, this would be it. After two years, we still don’t know what they have, but results are expected by Christmas and in the meantime, Delta has spudded an additional two wells in the area. If this is a basin-centered gas play, the numbers being used are simply out of this world.
CANORO RESOURCES (V-CNS) $1.75 n/c
It’s a fertile area in India that they are drilling in and they’ve spudded about a week ago, so it will be another six weeks to drill and test. They have a shallow zone that should be mildly productive, but it’s the deep stuff that is going to take the markets attention. The company is suggesting that the deep zone has a potential 78 million barrels of recoverable reserves (what they call their best estimate). The drills prove or disprove that, but needless to say, if there’s that much net to the company, the price you see will be history.
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