TSL, Pescod in his daily report briefly mentions SRL at the bottom. I am not good a posting, apologies. R
e-mail: debbie.lewis@canaccord.com e-mail: david.pescod@canaccord.com May 1, 2011
COPPER $4.17 n/c
SILVER $43.90 -4.70
CADENTE (T-DNT) $1.47 -0.06
It looks like a good day on the Toronto Stock Exchange, but
lots of activity in silver suggests we probably put in a top.
Maybe Brad Cooke’s idea that we’ll test $38 on silver before
this period of cheap summer shopping is over might be right.
Good day on Toronto, not so good for many of the interesting
junior resources stocks. Which gets us to the theme of
today...politics.
We found it a little surprising to see the NDP doing so well
in national elections. This is the party that advocates big government
and even bigger taxes, and for Albertans that only
have one industry that pays the bill, oil and gas, this could be
really scary for what next for the oil sands areas. Lots of big
wages and salaries paid up there, and plenty of Canadians
from coast to coast working there.
We also worry that this negative impact into the corporate
work world hasn’t yet to be priced into the markets.
As worrisome as our politics might appear, is it not truly
scary what is happening in the United States where Donald
Trump might actually become a candidate?
He’s certainly getting a lot of coverage, but this past week
he was speaking in Las Vegas as he tries to develop an audience
for a potential run at the presidency.
In Vegas there is the 64-storey Trump Hotel, with 1,200
suites, including no less than 50 penthouse suites. He spent
20 million dollars for gold gilding on the windows. How are
the investors in that Trump project doing? Not well at all,
mind you they are probably doing better than the other investors
in the neighborhood which looks like some sort of junk
yard from the days people cared about Las Vegas real estate.
Here’s what KTNV.com reports on what Trump said...truly
presidential, don’t you think?
“Real estate mogul Donald Trump may, or may not run for
president. But Thursday in Las Vegas, he was sure sounding
like a someone who’s ready to jump into the race with both
feet. He did it with enough explicatives to call it a Rated R
speech.
“We build a school, we build a road, they blow up the
school, we build another school, we build another road they
blow them up, we build again, in the meantime we can’t get a
f***ing school in Brooklyn,” Trump says.
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To the audiences approval, while talking oil.
“We have nobody in Washington that sits back and said,
you’re not going to raise that f****ing price,” he says.
And finally, while speaking about taxing Chinese goods.
“Listen you mother f***ers we’re going to tax you 25 per
cent,” Trump says.”
Meanwhile, sometimes investing can be personal. Diane
Francis, the high profile Canadian author writes “Trump or
companies with his name have gone bust four times, he gets
prickly whenever this is brought up, well to me it is personal”.
Francis had invested/speculated on $20,000 worth of Trump
entertainment bonds. A year later she received $1,105.25 for
her $20,000 investment. His companies seem to routinely go
bankrupt and yet he ends up richer than ever. Can you imagine
him running the United States?
Which gets us to politics of an investing/speculating nature,
and that is in the country of Peru.
Walter Spagnoolo with Candente informs us that the most
accurate pollster in Peru, Datum, put out another report last
week. Ollanta Humula has 41.5% of the election currently and
Kiki Fujimora has 40.3%. The suggestion is Fujimora, the rightwing
candidate is mining friendly whereas Humala is a guy that
might lead towards higher royalties, nationalization, you name
it. He’s definitely left of left.
Peru is rich in minerals, being the world’s second largest
copper producer, largest silver producer and a big player in
gold as well. There has also been some enormous takeovers
that have enriched speculators and investors over the last
while. Nothern Peru copper was taken over by MinMetals a few
years ago, and recently Antares was acquired on December 21,
2010 by First Quantum, Norsemont was taken over in January
by Hudson Bay minerals in billion dollar deals.
Which gets us to Candente. Candente on many lists is the
next obvious takeover target, but the politics is a little bit scary
these days, and also the very small retreat in copper has made
some people nervous.
For a couple of these concerns we went to Eric Coffin to
clear up some things ( He is a fan of DNT!). Starting with it
certainly feels like the summer shopping season has started in
the junior resource sector. Stock prices are down, and for the
first time in ages, some junior miners aren’t able to get financing,
and so forth. Smells like look at your favourite stocks, and
then look at the charts to find support levels and areas to put in
stink bids.
Cadente Copper
e-mail: debbie.lewis@canaccord.com e-mail: david.pescod@canaccord.com Page 3
Eric Coffin is one of those guys who has gotten pretty good
at hand-holding, and is absolutely adamant that he and brother
David, of the HardRock Analyst, believe there is another leg up
in copper, that will enable us to see $6 a pound. Certainly when
you look at the forward charts for copper contracts going out
for the next four years or so, suggest $4 copper could be here
for awhile. There is some concern in some circles that with
some of the new mines being built, there is going to be plenty
of copper around...however, we all know that there are so many
things that can go wrong building billion dollar mines that nothing
will happen on time.
As far as how come gold and silver were going up so dramatically,
and yet gold/silver stocks lately have continued
downwards? Eric says simply. “There’s fear out there. When
there is fear you want the physical gold, you don’t want the
paper of equities.”
Meanwhile, speaking of Peru, Jeffrey Reeder, geologist and
CEO of Duran Ventures drops by for a visit and here is a fellow
who has spent more than 15 years in Peru and married a local
gal. Needless to say, his Spanish is pretty good.
More importantly, it is interesting to get a bit of a handle on
local customs, how work is going in the mining sector in Peru,
and the like. Duran Ventures is liked by several analysts, including
Canaccord's, as the company has a mittful of different
prospects/projects in Peru, but it does have a fair chunk of
stock outstanding.
They intend to spin out some of those assets into different
companies in the future.
When we ask Reeder our favourite question, if you could
buy only one stock what would it be? He answers “It’s actually
two”. Once again Candente is mentioned as he believes it’s the
next takeover candidate and Salazar, which recently reported
some very spectacular drilling results, such as 21 metres of 4
grams gold and 3.2% copper...albeit in Ecuador.
DEB’S DITTY:
The early bird gets the worm…
But the second mouse gets the cheese!
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