Pennystocks newletter on NORA NXI.mse
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*** This exciting company trades on the Montreal Stock Exchange ***
Our feature PennyStock Pick for Thursday, November 19, 1998 is:
Nora Exploration, Inc.
(Montreal Stock Exchange: NXI)
Bid - Ask: $0.46 - 0.49 (Nov. 18, 1998)
Visit the Company's website at: nora.com
Click here: quote.canada-stockwatch.com
and type in "NXI" for either an up-to-date quote or chart!
The small cap market and more specifically the sub-category "mining
resource industry" has been depressed for quite some time. We believe the
key elements of success and prosperity of firms in this sector are those
that are led by strong management. As a follow-up to our previous stock
pick of two weeks ago that made a very nice gain of over 70% in stock price
and an increased market cap of over $500 thousand after it was profiled on
our site, we would like to bring to you another exciting and excellent
investment opportunity for consideration that still remains in this
depressed sector. As many analysts believe, it is when stocks look to be at
their weakest that they become an excellent buy. An interesting article by
Matthew Ingram "What to do with all those diamonds" at:
pennystockpicks.com, comments on the massive De
Beers diamond cartel (i.e., the South African-based company that virtually
invented the modern diamond market). Our feature story involves another
exploration operation that has evolved into a potentially explosive diamond
mining company and has the potential of being a leader in this industry and
poised for explosive growth.
Our Significant Newsbreak
Nora Exploration, Inc. Reported Results of Geophysical Surveys,
Which Identify Areas of its Marine Diamond Concession of
Having a High Potential for Concentration of Diamonds Deposits!
As recently reported in the Northern Miner "North America's Mining
Newspaper" (http://www.pennystockpicks.com/nxi-diamonds.html), titled "Nora
Tests Namibian Concession" (dated: 08/24-30/98), a marine diamond
concession on the west coast of southern Africa has provided Nora
Exploration (MSE: NXI) with the opportunity to capitalize on a significant
economical mineral deposit in the "Namibian Gemstone concession" that
literally involves diamonds. Nora is a Montreal-based junior involved in
several diamond projects in Africa.
Prior to October, 1998, Nora had a 10% stake in the Namibian Gemstones
concession. The concession is the second largest offshore diamond marine
concession on the western coast of southern Africa, consisting of 23
deep-water concessions. Results from one of the largest geophysical surveys
ever conducted in the concession covering 41% of the total area shows 18.6%
of the total concession area (eastern side) as having a high potential of
economical diamond
deposits. After geophysicists have processed the geophysical data,
anomalies sited are interpreted to be extensively eroded bedrock that
outcrops on the seafloor, which contains less than 5 meters of sediment.
This interpreted topography suggests potential diamond trap sites such as
gullies, bowls and potholes, which are considered by geological experts as
very conducive areas for highly concentrated diamond deposits. These
promising results have
encouraged Nora's management to actively pursue a greater percentage of the
entire concession.
Geologic Overview: Perhaps of most importance to the Namibian Gemstone
concession is the age and origin of the various seafloor rock outcrops and
their relationship to periods in history when diamonds may have been
introduced into the region. The following sequence explains why widespread
and abundant diamond deposits may exist in the Namibian Gemstone concession:
- Source area for diamonds - First, in order to have a diamond prolific
area, a source area for the origin of diamonds must be understood. Numerous
deep-seated kimberlite pipes exist in the continental interior of Africa.
Diamonds are very abundant in kimberlite pipes (i.e., diamondiferous)
because the host igneous rocks have been induced to extreme pressures
causing a mineralogical conversion of carbon contained in the igneous rock
from graphite to diamond.
- Diamonds at the surface - Secondly, the interior portion of Africa
underwent massive uplift about 25 million years ago during the Oligocene
epoch (22 - 37 million years ago) of the Tertiary period (Cenozoic Era).
- Erosion of surface rock - The uplifted rock containing the diamonds were
eroded. However, since diamonds are the hardest known mineral to
exist (i.e., have a hardness of 10 on the Mohs scale), they are extremely
resistant to erosion and remain after other minerals of lesser hardness
have eroded.
- Transporation of the Diamonds - The diamonds were then
transported westward via a series of paleodrainage systems of the
present Orange River. The diamonds were then deposited in the
Atlantic Ocean.
- Where the diamonds were deposited is the Key! - The De Bers concession is
the number 1 marine diamond deposit in the world. This concession
is directly along the west coast of Africa. The Namibian Gemstone
concession is directly westward and parallels the De Beers concession.
Both, concessions are in perfect position for containing diamonds since
they are north of the Orange River system and offshore currents (longshore
transport) flow northward along the coastline. Also, it is now understood
that water levels were lower in the Oligocene epoch than they are today due
to widespread glaciation. Therefore, a good majority of the diamonds could
have been discharged more westerly in what is now the deeper water of today
and directly into the Namibian Gemstone concession.
- What about the topography of the seafloor? - Based on a
geophysical technique called side-scan sonar, the same bedrock
topography exists in the Namibia Gemstone concession as in the De
Beers concession. Also, the age of the sediment is the same as in the De
Beers concession. Therefore, the conditions appear perfect for the
concession to contain massive diamond traps.
On October 20, 1998, Nora announced that it has ratified its joint-venture
greement with Namibian Gemstones Mining Corporation (NGMC) Limited, whereby
increasing its interest to 40%. The Company has paid the NGMC the sum of
US$ 720,000. Furthermore, Nora is in the process of issuing 1.1 million
shares to NGMC to increase its interest to 50%. The US$ 720,000 originates
from an advance made by a director of the Company and shall be reimbursed
via a corporate financing which will be in place on or before December 31,
1998. A subsequent payment of US$ 720,000 scheduled for January 15th, 1999
will further increase Nora¹s ownership to 60%, after which both parties
will establish a timetable for the balance to be paid to increase Nora's
ownership to 80%. Click here
"http://www.pennystockpicks.com/nxi-news1.html" for further details.
Management, in conjunction with the technical advisory board are now
preparing the next stages in the exploration programme which will include a
geophysical survey of the targeted areas followed by low cost dredging.
Initiation of bulk sampling will be dependent on the results of the first
two stages.
On the financial side, a satellite company of Nora "Otjua Minerals"
generated revenue of $941,918 from its African diamond operations for the
nine months ended May 31, 1998. On November 12, 1998, Nora announced fourth
quarter financial results from its Namibian operations for the period ended
August 31, 1998. Results of the activities in Namibia during last quarter
generated revenues of $1,197,788. During the fourth quarter, revenues
derived from operations increased by 106 percent. Click here
"http://www.pennystockpicks.com/nxi-news13.html" for details. Nora also
holds other projects in Africa, including a 90% stake in the Kade
diamond-gold concession in Ghana as discussed below.
Company Profile: Nora Exploration Inc. (Montreal Stock Exchange: NXI) is a
Canadian based exploration and mining company, actively involved in the
acquisition, exploration and development of first rate diamond properties.
The Corporation's rapid and dynamic growth will place it among the
significant players in the world marine diamond business.
Media Coverage: Nora has recently had noteworthy media coverage of other
company developments as well, proving the explosive potential of this
mining company. They are sited in:
Nora Tests Nambian Concession - in The Northern Miner, August 24 - 30, 1998
(http://www.pennystockpicks.com/nxi-diamonds.html).
Nora Adds to African Holdings - in The Northern Miner, June 15 - 21, 1998
(http://www.pennystockpicks.com/nxi-miner.html).
Exploration and Investment News - in The Prospector, May/June 1998
(http://www.pennystockpicks.com/nxi-prospector.html).
Namdeb's Ships Coming In - in The Northern Miner, March 30 - April 5, 1998
(http://www.pennystockpicks.com/nxi-ships.html).
Company Holdings:
1.) Namibia: The Company has three major diamond holdings, which are:
- Corporate Jewel - a 47% contractual interest in one of the largest and
richest land based alluvial diamond deposits in the world totaling 700 km2
located on the eastern shores of the Atlantic Ocean. When a minimum
realisable diamond value of US$ 110 /ct is taken, it places the inferred
resources in the US$ 300 million + category for the concession. Click here
"http://www.pennystockpicks.com/nxi-corp.html" to read more about this
exciting on-shore diamond deposit.
- Marine Jewel - a minority interest in what could well be one of the
largest and richest offshore diamond marine concessions in all of Southern
Africa totaling 23,000 km2 located in the Namibian offshore mining zone.
Click here "http://www.pennystockpicks.com/nxi-marine.html" for more
details about this offshore play.
- Triple Crown Jewel - a 50% joint venture partnership in two off-shore
diamond marine concessions totaling 190,500 hectares (1,905 km2). Click
here "http://www.pennystockpicks.com/nxi-triple.html" to learn more about
this recent joint venture.
2.) Chile: 100% interest in four concessions totaling 1700 hectares,
located in the heart of Chile's Maricunga Belt, are directly adjacent to
Bema's Gold and Amax's Gold world renowned Refugio mine and also adjacent
to Anglo-American's Santa-Cecilia property. The corporation has sold an
option to OREX EXPLORATION INC., whereby OREX can acquire a 75%
participation.
3.) Ghana: 90% interest in two concessions totaling 78 km2 located in the
world renowned Birim River Diamond Fields. Geological reports indicate
deposits of significantly higher quality than the great majority of
Ghanaian diamonds with an estimated resource of 540,000 carats. However,
minimal work is now being conducted and Nora is actively searching for
joint venture partners to assist in the further development of the resource.
Reasons Why NXI Deserves Serious Investment Consideration:
1. Ratified its Joint-Venture Agreement - the Company has ratified its
joint-venture agreement with Namibian Gemstones Mining Corporation (Pty)
Limited to increase its interest to 50%.
2. Plans for Increasing Nora's Ownership - the Company will make a
subsequent payment of US$ 720,000 scheduled for January 15th, 1999
to further increase Nora's ownership to 60%, after which both parties will
establish a timetable for the balance to be paid to increase Nora's
ownership to 80%.
3. Potential of the Namibian Gemstone concession - the Namibian
Gemstones concession is the second largest offshore diamond marine
concession in southern Africa consisting of 23 deep-water concessions, and
has a favorable geologic origin for the deposition of diamonds within the
concession.
4. Favorable Geophysical Surveys - Nora's management is particularly
pleased with the results of the geophysical survey of the Namibian
Gemstones concession, one of the largest continuous surveys ever undertaken
on the west coast of southern Africa by the Council for Geoscience
(Geological Survey) of South Africa. The geophysical data contained in the
report significantly enhances the potential of the concession and
management has recommended to the board of directors that the Corporation
should pursue the acquisition of a majority interest in the concession.
5. Depressed Stock Price - the stock price is depressed and undervalued.
Assuming abundant diamond deposits exist in the Namibian Gemstone
concession based on very favorable geological reports and diamonds can be
economically mined, the stock price could very well appreciate from these
levels.
6. Other Major Diamond & Gold Holdings - Nora holds another major
diamond producing area in Ghana and a major gold producing area in
Chile.
7. Currently Generating Revenue - On the financial side, Nora is currently
generating revenue, such as the satellite company of Nora "Otjua Minerals",
which generated revenue of $941,918 from its African diamond operations for
the nine months ended May 31, 1998.
Recent Press Releases:
11/12/98 -
NORA EXPLORATION ANNOUNCES FOURTH QUARTER RESULTS
10/20/98 -
NORA EXPLORATION RATIFIES ITS JOINT-VENTURE AGREEMENT
AND INCREASES OWNERSHIP TO FIFTY PERCENT (50%) OF THE
NAMIBIAN GEMSTONES CONCESSION
09/10/98 -
NORA EXPLORATION CLOSES TWO NEW PRIVATE PLACEMENTS
AND CONFIRMS OWNERSHIP OF THIRTY PERCENT (30%) OF THE
NAMIBIAN GEMSTONES CONCESSION
08/10/98 -
NORA EXPLORATION ANNOUNCES HIGH PROBABILITY OF A
WORLD CLASS DEEP WATER GEM QUALITY DIAMOND DEPOSIT
ON THE NAMIBIAN GEMSTONES CONCESSION
08/05/98 -
NORA EXPLORATION ANNOUNCES THIRD QUARTER RESULTS
06/02/98 -
NORA ANNOUNCES THE JOINT VENTURE ACQUISITION OF TWO (2)
OFF-SHORE CONCESSIONS IN NAMIBIA TOTALING 190,500
HECTARES
05/20/98 -
NORA ANNOUNCES RECOVERY OF 2,084 CARATS FROM ITS
OPERATIONS ON THE OTJUA CONCESSION
05/04/98 -
NORA EXPLORATION ANNOUNCES FIRST SEMESTER RESULTS
03/26/98 -
NORA EXPLORATION ANNOUNCES ANNUAL RESULTS
03/26/98 -
NORA EXPLORATION ANNOUNCES PRELIMINARY RESULTS FROM
THE NAMIBIAN GEMSTONES CONCESSION
03/05/98 -
NORA EXPLORATION CLOSES TWO PRIVATE PLACEMENTS
02/16/98 -
NORA EXPLORATION INC. FINALIZES ACQUISITION IN CHILE
02/12/98 -
NORA'S OFFER AND OPTION TO OBTAIN TO OBTAIN 100%
OWNERSHIP OF OTJUA MINERALS (PTY) LIMITED
Company History:
Nora Exploration Inc. is a Canadian public company actively engaged in the
acquisition, exploration and development of first rate diamond properties
in Africa.
Incorporated under the Canadian Business Corporation Act Nora's
common shares are listed on The Montreal Exchange ('ME') and trade
under the symbol NXI.
The Company has an unlimited authorized capital. Following the purchase of
Otjua Minerals (Pty) Limited, Elisabeth Bay Diamonds (Pty) Ltd. controls
about 20.4% of the float. There are presently 25,973,290 shares outstanding.
To attract a larger base of investors, particularly in the US, the Company
has obtained from the American Securities Commission a 12g3-2(b) exemption
number. The number is 82-3329.
Corporate Mandate:
Management has defined realistic and accessible corporate mandates:
- to develop the Company into a self-financed medium size diamond producer
in the next five years
- to become one of the lower cost diamond producer in its class
- to maintain the financial health, solidity and prosperity of the Company
Achieving these objectives is realistic when considering the experience and
knowledge of the management team combined with the actual and potential
concession portfolio of the company.
Objectives:
1. To achieve success as a diamond exploration and mining company,
thereby creating value for its shareholders.
2. To progress to the next phase of its strategic plan: increase
production, revenues and reserve base as a result of the Company having
achieved its first step in acquiring extensive license contracts for mining
and exploration in one of the most important mining deposits in the world.
3. To develop new assets in order to position the Company as a major player
in the area.
4. To become a self-financed diamond exploration and mining company through
the development of its operations in Namibia
5. To achieve a production of 250,000 to 500,000 carats per year.
Key Management:
Johannes A. Kleynhans - Chairman
Pierre Leveille - President & CEO
Bernard Tourillon - Executive Vice-President & CFO
Kevin Elford - Senior Geologist & Production Manager, Otjua Minerals
Alain Blot - Administrative Manager
Dr. Donald Sutherland - Geological Consultant
Corporate Financials:
Listed on the Montreal Stock Exchange Trading Symbol, NXI
American Securities Commission 12g3-2(b) Exemption number #82-3329
Shares Outstanding ~ 25.9 million
Shares held by Insiders ~ 8 million
Market Capitalization ~ $12 million
52-week Range $0.40 (low)- $1.25 (high)
Recent Price $0.46 (bid) - 0.49 (ask)
Industry Diamond Exploration & Mining
Competition and Risk Factors: Investors should be cautioned that purchasing
shares of Nora Exploration involves a level of risk based on the following
factors including but not limited to: 1) competition with existing and
emerging firms currently engaged in the resource sector for mining
diamonds, 2) competition to obtain economically producing mining prospects,
3) uncertainty of future financial results, 4) potential of technological
failure for diamond recovery, 5) potential of uneconomical quantity of
diamonds existing in the Company's concession area, 6) potential of low
quality recovered diamonds, 7) potential changes in mining Laws on various
governmental levels, 8) depressed equity markets for diamond mining
companies,
9) financing issues to overcome, 10) uncertainty in Canadian mining stocks,
and 11) ability of the Company to repay debt. However, management feels the
potential for capital gains appear very favorable and should outweigh
factors of risk.
Primary Contacts:
Company: Investor Relations:
Nora Exploration, Inc. John Stella
Pierre Leveille, President & CEO 4444 St-Catherine St. West,Ste. 201
Bernard Tourillon,
Exec. Vice-President & CFO Westmount, Quebec, CANADA H3Z 1R2
E-mail: mailto:info@nora.com Tel: (888) 666-3431,
Website: nora.com Fax: (514) 846-1435
E-mail: mailto:johns@nora.com
Investors are welcome to request information on Nora Exploration, Inc. at:
www2.stockgroup.com
A Fax-Blast "http://www.pennystockpicks.com/nxi-faxblast.html" will be
distributed to numerous stock brokers in the U.S. beginning November 20, 1998!
Conclusion: Nora Exploration has strong fundamentals and combining this
with prime world class diamond properties led by experienced management
should equal success. Other significant factors that should lead to the
Company's success are: (1) the Company has ratified its joint-venture
agreement with Namibian Gemstones Mining Corporation (Pty) Limited to
increase its interest to 50%, and plans are underway for increasing Nora's
ownership to 60%, which could go as high as 80%, (2) potential of the
Namibian Gemstone concession as
a result of a favorable geologic origin for the deposition of diamonds
within the concession, (3) favorable results of geophysical surveys, (4)
depressed stock price, and (5) Nora holds other major diamond producing
areas that are currently generating revenue. Management is pleased with the
efforts and results leading to the Corporation's present position and is
confident that the remainder
of 1998, and 1999 will be a great year for the Corporation and its
shareholders.
Technical Position
Our interpretation of the technical position of Nora Exploration (MSE: NXI)
indicates that their stock price is highly undervalued based on the future
potential of the Company. The 52-week high for NXI is $1.25 and 52-week low
is $0.40. The stock currently trades at about $0.50 slightly above its
52-week low. The chart history as displayed at
"http://www.pennystockpicks.com/nxi-chart.gif", shows a decline in stock
price since December 1997. This decline is a reflection shared by many
mining companies. We believe there is some risk to the downside though
minimal at the current level.
Reviewing the two-year chart history, the stock price had a significant
surge from about $0.75 to over $1.00 in May 1998. At this time, the Company
released its first rather significant monthly progress report: Nora
Announces Recovery of 2,084 carats from its operations on the Otjua
concession in Namibia and plans to increase exploration to increase both
off-shore resources and on-shore reserves. Since that time, the price
continued to depreciate to its
present level. For the past 1 1/2 months, the stock appears to be forming a
new base price and drifting above a level of support at about $0.40. Based
on the significant factors as previously mentioned, we believe the price
should begin to appreciate in the near future. Levels of resistance (i.e.,
higher price barriers) may
be interpreted at around $1.00, though this is not conclusive based on the
stock's trading history. On the other hand, if the quantity of diamond
reserves exceed anticipated levels after these deposits are mined, the
stock price could appreciate beyond all-time highs.
PennyStock Picks believes the Company is highly undervalued based on the
Company's present operating status 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 $0.75 (~ 50% higher than today's prices), and a conservative
long-term (6 months to 1 year) target price of $1.00 (~ 100% 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 10,000 free trading common
shares of NXI on the Montreal Stock Exchange from the Company as
compensation for its efforts in research, presenting, and disseminating
this information. Management of PennyStock Picks will not sell any shares
of NXI received from the Company prior to archival of their report. For
more information, please read our company background and compliance
information at: pennystockpicks.com, and
compensation information at:
pennystockpicks.com
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