Archive for October, 2007
by Andrew K. Burger
Socially responsible investing
The role mineral resource development plays in financing repressive, authoritarian regimes is coming up again in light of recent protests by Buddhist monks and others in Myanmar and their violent suppression by the country’s military government. Myanmar produces more than 90% of the world’s rubies—a trade estimated to be worth US$2.1 billion wholesale according to MVI Marketing Ltd. research—and it has also long been the world’s largest miner and exporter of jade, primarily to China.
Mining companies like Vancouver’s True North Gems (TSX:TGX), which is working to develop a ruby and sapphire resource in Greenland, can play a role in breaking the dominance of governments such as Myanmar’s, the world’s largest supplier of rubies and sapphires, as well as jade.
Myanmar’s military government has made a concerted effort to gain control of the country’s lucrative gem trade during the past two decades, jeweler, Fair Trade and human rights advocate Ben Leber of Leber Jeweler Inc. told Resourcex.
“At present, gemstones are the regime’s third largest export, netting close to US $300 million, although the unofficial number is no doubt higher. At present, the military government controls a majority share of every gem mine, controls distribution of licensing and permits, as well as runs the gem auctions in Rangoon. While there are ‘partners’ in the mines, these are most often government officials or close allies of the regime.”
Campaigning for Fair Trade
Prominent jewelers, such as Tiffany’s in 2005, have come out, instituted policies stating that they will not purchase rubies and other gemstones produced in Myanmar and have joined campaigns against them. Jewelers such as Leber have joined organizations like the US Campaign for Burma, the American Gem Society and the Council for Responsible Jewelry Practices.
While the US has instituted a trade embargo on Myanmar, the EU has not. Recently, some of Britain’s leading jewelers have been accused of helping keep the military dictatorship in power by trading in the country’s “blood” rubies.
According to one news report, Asprey, Cartier, Leviev and Harrods are selling Myanmar’s rubies and gems in their central London stores, with some items priced as high £500,000. British Foreign Office sources indicated shortly after news reports broke that Gordon Brown was pressing the European Union to introduce tougher sanctions against Myanmar that would prohibit sales of its gems in Britain.
“A gift of a ruby is meant to symbolize love, but if it comes from Burma the true price is paid in blood and oppression,” said Mark Farmaner, acting director of Burma Campaign UK. “Any rubies on sale in the UK will have been purchased at some point from the military and so will be helping to fund that regime.”
An Alternative Emerging in Greenland
If development plans work out, alternative sources for rubies and sapphires—both varieties of corundum—will emerge in the next few years, offering gemstone buyers and the jewelry industry and alternative source of rubies without the moral stain Myanmar gems carry.
Vancouver’s True North Gems on Oct. 9 announced that it had successfully collected its third, 27.8 tonne bulk sample from Greenland’s Aappaluttoq ruby and pink sapphire resource from the company’s Fiskenaesset Ruby Project, thereby completing its 2007 field sampling program.
Fiskenaesset has thus far yielded individual rubies and pink sapphires weighing more than 80 grams, or 400 carats. Rarer than diamonds, rubies and pink sapphires are valuable gem materials. Although prices vary greatly depending on quality, independent valuations have put a wholesale value of US$3,220 per carat on a 0.69 carat ruby from Aappaluttoq and a US$460 per carat value on a 0.96 carat pink sapphire from Aappaluttoq.
“Our primary focus as a company is now to get a bankable report done on our main occurrence, and the work this summer was the first major step on that route - our past work has shown we have something worthy of advancement, and the feasability will tell us the economics,” said True North president Greg Fekete.
The company during the past two field seasons has amassed 120 tonnes of mineralized surface material from Aappaluttoq. A total 3.6 tonnes of samples have been sent to Fiskenaesset for processing True North’s gravity concentration plant. Management expects to issue a report shortly.
Blasted out of a bedrock Host Zone from within tightly folded zones of phlogopite and pargasite-enriched alteration using focused, low-intensity blasting to control grade and width, the latest bulk sample will yield an analysis of gemological criteria and gemstone conditions that would occur under typical mining conditions, according to company information. The data collected will also enable comparison with grade and stone distribution gathered from the earlier 2006 and 2007 of the bulk samples that were collected using chain saws and chisels.
“The only assessment that can be made about the value of the stones, our current inventory or any eventual production at this point is that the sheer quantities of gem grade material recovered from bulk samples indicates the potential exists for a commercial operation that would defined by high operating margins, low capital costs and high internal rates of return,” True North co-founder, chairman and CEO Andrew Lee Smith, told Resourcex.
“The actual magnitude of the project value is dependent on a series of variables such as stone size, yield on cutting, and aspects of statistical distribution and quality—know as the ‘stone curve’—that are being defined through manufacturing experiments that are ongoing.”
Developing Fiskenaesset
True North worked up a CAD 3 million budget for the 2007 field season at Fiskenaesset, the objective being to deliver a Preliminary Assessment of the Aappaluttog ruby and pink sapphire occurrence. This includes a 5,000-meter diamond drilling program, as well as additional bulk sampling and geological mapping.
“We are currently in the process of preparing a Preliminary Assessment (scoping study) that will be authored by Wardrop engineering who have provided the independent oversight of the exploration program and will complete the report by end of the first quarter of 2008,” Lee Smith elaborated.
Compiling technical, valuation and marketing information True North has been preparing with companies including MVI Marketing and Wardrop Engineering, the report will a first assessment of the project’s economic parameters, according to Lee Smith.
Accomplishing this will demonstrate that the risks associated with marketing, manufacturing and technical aspects of the projects are manageable and leave financing and project/permitting, political risk as the main areas to be addressed,” he explained.
Assuming a positive Preliminary Assessment, management is working up a 2008 feasibility program with an estimated cost between US$10-15 million. If all these pieces fall into place, True North anticipates moving the project into pre-production in 2009 and starting full-scale production by 2012.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing tips that have helped many of our readers make more money. http://www.resourcex.com
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by Christina de Wit
There are three things the Sonoran Desert demands from those who seek to make their living from it: resilience, resourcefulness, and a long time horizon. These qualities are embodied by one of the Sonora’s most famous denizens– the agave, or century plant. After years of marshalling its energy reserves in its sharp leaves, the agave drives up a long spike and flowers spectacularly.
It’s an apt scenario for Kootenay Gold’s (TSX.V:KTN) management and shareholders, as they await Phase I drilling results on the company’s Promontorio Silver Project in Sonora State, Mexico. The company has focused the bulk of its resources toward work on its claims in the Sierra Madre Occidental volcanic province — a system considered highly prospective for gold, silver, and copper deposits. Promontorio is 75 km northeast of Ciudad Obregón, the second largest city in Sonora State, and about 500 km south of Tucson, AZ. The area is easily accessible, with an international airport at Obregón and dry-season road access to the property.
The project consists of four contiguous claims totalling nearly 37,000 hectares. The company has staked an additional 400,000 hectares in the area — making Kootenay one of the largest landholders in the Sierra Madre Gold and Silver Belt. The claims are 100%-owned by Kootenay (save for a small NSR to the original landowners).
The rapid development of the Sierra Madre Occidental Belt can be compared to that of Nevada’s Carlin Trend — the Western Hemisphere’s richest gold area. Six years ago, there were no producers in the Sierra Madre Belt. Today, there are five profitable mines producing 1,000,000+ oz Au in the area, with two more mines coming on stream over the next 18 months.
Operators include Pan American, GoldCorp, Agnico-Eagle, Piedras Verdes and Alamos. Jim McDonald, Kootenay’s CEO, was one of the founders of National Gold, which subsequently merged with Alamos. In the early 1980s, the Carlin Trend experienced a similar major takeoff with the upsurge in the price of gold.
Promontorio has seen sporadic production over the past 100 years, with limited open-pit production during the 1960s and 1980s. Artisanal mining and previous small-scale production are usually precursors for big deposits. Old workings on the property include three shafts (the deepest one reaches an inclined depth of 158.5 meters), as well as an open cut 85 meters long ranging from 7 to 25 meters wide and 20 meters deep. Historic (non-43-101) calculations from a 1973 feasibility report outline an ore reserve estimated at 384,000 metric tons grading 0.12% Cu, 2.80% Pb, 1.74% Zn, 367 g/t Ag and 1.5 g/t Au, to a depth of 100 m. As reported in the company’s July 17th press release, recent chip sampling from Promontorio in the Pit Breccia has returned 480 grams per tonne silver, 2.51 grams per tonne gold, 11,199 ppm lead and 17,284 ppm zinc over an estimated true width of 19 meters. The 1990s saw the closure of the mine as a consequence of high interest rates and low metal prices. Kootenay acquired the ground at the early stages of the current bull market — making it the first company to apply the latest modern exploration methods to the property.
According to the company’s website, Promontorio “is highly prospective for large shallow level, intermediate-sulphidation epithermal system that may have developed close to a shallow level porphyry system and concentrated at the intersection of the regional WNW to NW fault zones.” The property’s Main Zone has a documented silver dominant polymetallic (Zn/Pb/Cu/Ag/Au) deposit, which has been the focus of the past 11 months’ work. The broad extent of alteration and mineralization found at surface is strongly suggestive of an underlying deposit. Only drilling will confirm this model, which with successful results could prove be the next discovery in the Sonoran Desert.
So far, the company has been diligent in doing its homework. Detailed mapping, geochemical sampling, and geophysical surveys have been completed along with Phase I of the drill program to confirm historic mineralization.Assay results are anticipated over the next 3 to 6 weeks.
Kootenay’s management is confident that its focused, methodical approach to fieldwork, financing, and risk management will pay off for the company’s investors. “Promontorio’s one that could be a real company maker,” said Ken Berry, Kootenay’s president. Management has laid a solid foundation for making a new discovery through years of dedicated effort. By building close relationships with key officials early on, the company was able to amass a comprehensive land package around Promontorio. Expert technical direction and careful financial management has enabled the project to advance to Phase II of the drilling stage, in which new prospects associated with the known mineralization will be delineated.
Given this stage of the market, it is rare to find a junior that has managed to stay in the game for six years, while maintaining a relatively tight share structure (23.7 million, fully diluted). This is due in part to the company’s having been privately financed for four years by Mr. McDonald.
Kootenay is also engaged in an ongoing, advanced drilling program with joint-venture partners at its Jumping Josephine Project near Castlegar, British Columbia.
“We’re making sure we’ve got lots of opportunities for success and at the same time, we want to spend our money in the ground, while minimizing dilution to the shareholders.” said Mr. Berry.
There’s a Mexican folk saying, ‘Acocote nuevo, tlachiquero viejo.’ that describes the process of extracting agua miel, (honey water) from the agave to make pulque, Mexico’s national drink. It translates roughly as “A difficult task must be done by someone who has the skills or experience to do it.” The market perception is that management is certainly up to the task at Promontorio — as per its Oct. 5th press release, the company raised $1.5 million in a non flow-through, non-brokered (and oversubscribed) private placement of 1.7million units @ $0.90/unit.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing
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by John Hurst
When Zoran Pudar returned to his Vancouver head office this week, his briefcase contained lots of good news about the ongoing exploration program on the company’s two prospective gold properties located in Far East Russia — across the Bering Strait from Alaska. The vice-president of exploration for Golden Reign Resources Ltd. (TSX-V: GRR) was returning from a field visit to the company’s properties. At the Dorozhni property, which covers 8.8 square km, gold mineralization is thought to be the source of 150,000 ounces of historically mined placer gold.
“In approximately two weeks time, I expect to receive assay results for samples collected during my visit to the properties,” he told Resourcex Investor on Thursday, “and we are still collecting some samples from the Butarni property. In total, 18 samples were sent to Alex Stewart (Assayers) Ltd., a British lab in Moscow.”
The Russian government has limited research data on the properties in the Magadan Region, under agreement to Golden Reign and more extensive information has been coming out only in recent weeks. Most of the work had been done following World War II and in the late 1980s. The property is held under a 20-year comprehensive exploration-mining licence.
“From what we know about the Dorozhni property,” Pudar said, “they were chasing some high-grade quartz veins. Typically, the gold is coarse. I had a chance to spend several days there and focused on the eastern part of the property where we have recently completed 1.5 km of trenching. We sampled some of those veins, which in 1946 had yielded over six kilos of gold (approx. 20 ounces).”
He said that high-grade gold mineralization occurs at the intersection of northwest orientated structures and the intrusive, hosting quartz veins. Of particular interest is the newly exposed mineralized sediments and breccia zone discovered in a river bed.
Pudar says that this newly discovered breccia zone appears to be 50 by 70 metres wide. “It is the type of target I was looking for. In fact, I brought home some really nice samples, just for show and tell. This new zone has really great potential, but the riverbed has to be totally exposed and properly sampled. There is rich sulphide mineralization within the zone, which is often associated with gold. This zone is considered a primary target for continued exploration.”
The first phase of exploration at the Dorozhni property was initiated this fall. Dorozhni, one of Golden Reign’s two highly-prospective gold properties at Magadan, is located at the headwaters of Dorozhni Creek. Previous exploration work focused on identifying and testing five separate gold-mineralized quartz veins at or near surface. The veins, which have been traced for 380 metres along strike, average between 0.4 to 2.4 metres in width and occasionally expand up to 17 metres wide. The distance between the veins ranges from 15 to 50 metres. Gold distribution is extremely irregular, with the highest reported grades resulting from two separate channel samples, both of which were collected from Vein No 1, of 6,322.2 g/t over 0.1 metres and 2,678.2 g/t over 0.5 metres.
Golden Reign believes that the property has potential for a low-grade bulk tonnage gold deposit. Exploration will test the sheeted vein system within the granite intrusive to evaluate the gold content between veins, with the intent of determining an average gold grade from the vein swarm and the intervening intrusive.
The first phase of exploration was designed to map the mineralized zones and to test whether the gold mineralization is restricted solely to quartz veins and veinlets, or whether mineralization occurs in the surrounding host rocks. Exploration will test the sheeted vein system within the granite intrusive to evaluate the gold content between veins, with the intent of determining an average gold grade from the vein swarm and the intervening intrusive.
The company has established an exploration camp, mobilized equipment and upgraded an existing access road. It has built a new two-km road to provide access to previously untested mineralized zones within the property boundaries. Comprehensive geological mapping, including reconnaissance traverses, and grab sampling have been completed. Assay results are pending and will be released as they become available.
Magadan, one of the world’s richest mining areas, has about 2,000 placer gold deposits, 100 gold ore deposits and 48 silver deposits. Total probable gold reserves in the Magadan Oblast are estimated at 4,000 tons (128,000,000 ounces).
Pudar, who has been active in Russia for over 10 years, is a graduate of the University of Tuzla, Bosnia and Herzegovina in the former Yugoslavia. He worked at the Geoinstitute of Sarajevo, Bosnia, and for several Canadian public and private companies involved in mineral property exploration.
In late Summer, work also began on Golden Reign’s Butarni property, 9.3 square km situated approximately 310 km north of Magadan, the capital city of the province. It is underlain by clastic sediments, which have been intruded by a biotite granite stock with dimensions of approximately 3.0 km x 1.6 km. Five known mineralized quartz vein zones are outlined within the stock, with a length ranging from 700 metres to 1,500 metres. Major veins are between 0.1 and 1.5 metres in width, 100 to 150 metres in length and are accompanied by zones of parallel quartz veinlets. Previous grab and channel sampling returned values from 1 g/t to 334.4 g/t, with an average grade of 21.3 g/t gold from 45 selected grab samples and 29.6 g/t gold from 22 channel samples.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing
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by Brian J McAboy
Are you finding that your trading profits are not as consistent as you want? Are you wanting to reliably repeat when you have winners? Of course you do! Goal #1 in trading is profiting. The second is then consistent profits. Goal #3 is steadily increasing profits.
Your bottom line results are primarily controlled by what YOU do, more so than what the markets do. There are traders making money every day, so blaming the markets is simply an excuse. If you want to profit consistently, then get more consistent in what you do in your trading.
First thing to understand is that trading is a repeated activity. That’s why having a good trading system is so vital. If you truly desire to make improvements in a process, and especially when your goal is achieve greater consistency, the three steps below are ones you can take to realize the most substantial impact on your consistency.
Step 1. Clearly define and write down your system. One of the more common errors that many traders make, especially when it comes to consistency is that they don’t have their system well-defined and written down.
When you have an procedure that isn’t documented, there will probably be inconsistencies in how the task gets performed. That is why the military is so big on following procedure: they want things to be done in a uniform, reliable and predictable manner. The same thing goes for your trading.
Step 2. Analyze your system’s critical aspects. A wise man once stated that for you to improve anything, you have to start with first measuring it. In what other way are you to know if you’re actually improving? Your trading system has several measurable aspects that make the bottom line what it is, in addition to the all-important your account balance at the end of the month.
Businesses in all industries have certain aspects that directly affect the profitability of the business. Smart managers know to track those aspects and assign measureables to them. The reason that these are so important is because by measuring each of them, it becomes very clear specifically where your opportunities for improving your system are.
Step 3. Make improvements in a controlled manner. Once you’ve conducted an analysis of your system, you now have the ability to focus on specific facets of your system to make improvements. By utilizing system analysis, you can modify your system and test - with zero risk - either through back-testing or in a demo account and determine the true impact on the system’s performance - and if there are any trade-offs.
To give you example, suppose you analyze your system and your results show that your winning percentage is currently 37%. You come up with an idea on how to improve it to 55%, which you “think” would increase your profits at the end of the month. Next would be to run the analysis on the system with the change on real market data. By looking at the results, you can see if this change accomplished it objective, but also if there were trade-offs in other aspects of your system performance, such as a reduced number of trading opportunities. It will be clear now whether you should incorporate the change or not.
Conclusion. In your trading, you wish to have consistent - and reliable - results. Spotting, entering and executing trades is an activity that you repeat on a regular basis, so if you want consistent results, focus on making what you do consistent.
Step 1 is to make sure that you have clearly defined and written down your system. By clarifying your system and then documenting it, you are more likely to repeat what you do consistently.
Step 2 is to run the metrics on your trading for a baseline of where you are now versus where you want to be. This also gives you insight into where to focus for improvement.
Step 3 is to track these measurables and take steps in a controlled fashion and without risking money un-necessarily.
There are several metrics in your trading system that directly determine your profits. Through analyzing your system’s performance and purposefully focusing on these metrics, you give yourself the best means to increase your profits. Also, this will dramatically improve your ability to consistently produce profits.
Did you know that it takes most traders an average of 7 years to reach the point of consistent profits? Can you afford to wait that long? Proper system analysis and tracking can save you years of losses, plus solve manytrading psychology issues. Discover the right way to do both and feel your confidence soar by clicking here => http://insideouttrading.com/consistent
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by Andrew K. Burger
Mining companies with stakes in Ecuador have been urgently meeting with government officials in an effort to demonstrate their good corporate citizenship, environmental and social responsibility to preserve their interests in the face of a new constitution and mining legislation to be drafted by 136 newly elected members of a National Constituent Assembly. What transpires will shape the face of mining, foreign investment and development in Ecuador, and very possibly elsewhere in South America, for years to come.
Ascendant Copper (TSX:ACX) is one junior miner intimately involved in the process. The company has been working to explore and develop Junin, a world-class copper porphyry deposit, as well as Chaucha, a second similar deposit the Andes’ western flank in northern Ecuador.
Ascendant is sitting on Junin, a world-class copper-molybdenum-silver-gold porphyry prospect, as well as two others, the Chaucha and Telimbela prospects. “We are sitting on the second if not the largest copper/molybdenum property in the world,” commented John Haigh, Ascendant’s Investor Relations manager. “Our Junín property consists of 23,475 acres of property containing billions of pounds of economic resource; in fact we are looking at a potential in excess of a billion pounds of molybdenum and in excess of 20 billion pounds of copper.”
While management remains optimistic in the longer-term, recent elections and upcoming debates and controversy associated with drafting a new constitution, as well as new mining laws and regulations, is prompting management to shift their focus elsewhere in the shorter term.
Mining & the Environment
Mining is inherently damaging to the environment yet practically every society in the world today could not function or support itself, nor would they have grown or developed to the extent they have were it not for a steady supply of key metals and minerals. Copper is one.
In keeping with the times and technology, Ascendant has made substantial efforts to demonstrate good corporate citizenship. These are encapsulated in the U.N. Global Compact, a program and internationally recognized set of standards regarding human and labor rights, environmental sustainability and anti-corruption to which Ascendant ascribes and has been formally accepted.
More specifically with regard to Junin and its other prospects in Ecuador, Ascendant has during the past two years established social and environmental programs within nearby Junin communities.
These include providing much needed medical and dental facilities and personnel, working to improve the educational system– including teacher training and scholarships– providing training on farming techniques, vaccinating cattle, supporting soccer camps, providing trash collection and disposal, maintaining and building roads, and developing nurseries with more than 40,000 plants to support reforestation of areas deforested by slash-and-burn agricultural methods, according to company information.
Moreover, it should be noted that all the above is in addition to potentially substantial government revenues and foreign exchange earnings the Ecuadorian government stands to garner should Ascendant’s development plans move forward.
An Easy Target for Protestors
The area around the Junin property has been a hotbed of legal and illegal protest. Ascendant’s demonstration farm in the Intag area was illegally seized and the company has been unable to conduct independent drilling to confirm and expand on historical exploration and assay results.
That looked set to change after March 20 when the company concluded agreements with the government and Decoin aimed at restoring law and order to the region, reducing tensions and respecting the rights of all parties.
One of the conditions was the return of the Intag demonstration farm, which had been seized the previous week. Based on Decoin’s demands, Ascendant also reluctantly agreed to reduce its work force substantially, from 159 to 48 people—most of whom were involved in community development efforts—as well as its current activities, which include the provision of medical and dental services in the area.
Ironically and somewhat quizzically, the ecological group was able to push through the shutdown of social services, claiming that such activities influenced the local community to look favorably on the Junin project and Ascendant.
The Ecuadorian government as part of the March agreement stated that it would organize a commission of community leaders, government officials and representatives for Ascendant to ensure the compliance of all parties.
A group of government officials visiting the Junin property and area in early August found that Ascendant was operating a medical center and a school bus for Intag’s children. They asked the company to stop these social programs and Ascendant was compelled to agree based on the three-party agreement signed earlier in the year.
“We did it regardless of the fact the country has no legal authority to control our social programs. The opposition was annoyed because our projects increase the community’s support for mining,” Francisco Veintimilla, the company’s Ecuador general manager, stated in a media release.
The Government, Ascendant and Mining Going Forward
Mining experts from Canada, Chile, Peru and Spain were among some 350-plus participants on hand in Quito Sept. 18 when Ecuador’s recently appointed Minister of Mines and Petroleum, Galo Chiriboga, led a forum that brought together government, mining and community representatives to present and debate the central issues regarding the future of mining in the country.
Chiriboga stated his support for environmentally and socially responsible large-scale mining in a recent interview. He also announced that the Ministry of Mines and Petroleum would be restructured so that it could devise and enact improved national mining policies in both the short and long-term that would involve drawing input from all stakeholders.
Representatives from Cornerstone Capital Resources, another Canadian junior mining company with projects in Ecuador, were “favorably impressed and encouraged by this and other very positive signals,” the company’s manager of corporate communications, Roseanne Williams, wrote in a recent update.
All parties stand to gain if the Correa government can successfully negotiate a mutually acceptable agreement regarding Ascendant’s Junin property. Doing so might also be a significant step forward for the Ministry of Mines and Petroleum’s efforts to forge an equitable and practical set of mining policies and regulations going forward. If and when this scenario pans out, expect Ascendant’s shares to make a strong surge to the upside.
Ascendant’s management “estimates that a lasting, mutually agreeable arrangement with the Ecuadorian government can be reached in 30 months,” Investor Relations manager John Haigh told Resourcex. “We believe that it will be at least one more year before the Ecuadorian mining law will be rewritten and will include a royalty to the government of at least 3%, that they currently don’t have. That’s fine with us.”
In the interim, Ascendant has launched efforts to acquire three near-term copper producing properties in the western US. Negotiations are well under way for two of the three, with an announcement expected on the third in about three months, according to Haigh.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
Resourcex Investor is an internationally distributed newsletter about emerging junior resource companies. Sign up for a free 1-month trial to our newsletter and get instant access to news and investing
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An important question for all investors is: Can I afford to invest
America always has been a land of promise. Whatever the course of our economy in the years immediately ahead, it is likely that opportunities for investment will be both numerous and attractive. Energetic new companies will emerge, looking for venture capital. Solid old companies will come forth with exciting new products. One industry or another will enjoy a boom period relative to the rest. And, of course, there will be casualties, too. There inevitably are.
For the observant investor this activity, properly evaluated and properly timed, will bring rewards. There will be chances to buy stocks before they have called attention to themselves and begun to rise, or to buy a Blue Chip, temporarily out of favor, at a depressed price. There will be stock splits, dividend increases, new issues, mergers, spin-offs, as well as the tidal rise and fall of stock prices all of this characteristic of the restless life of the market as a reflection of American business.
If you have never invested before, you are bound to be tempted.
Whether or not you yield will depend on your answer to the first hard question about investing
It is a lonely question and only you can answer it, for it involves not only how much money you feel able to invest, but what kind of person you are. Actually, it is several questions wrapped into one. You are asking, first, whether your financial condition permits you to invest; second, whether you can assume the risk implicit in stock investment; and, third, whether the market is a safe place for you to be.
Let’s take them one at a time.
Your Financial Position: One point should be made clear at the outset: you don’t have to be wealthy to invest. Among outsiders you can hear it said that stock ownership is a rich man’s game. This can mean any of several things: that the market is too complicated for the little man, that brokers aren’t interested in small orders, that only the person who can lose a bundle without feeling it should invest. However persuasive these arguments, they are all untrue.
The fact is—according to a recent New York Stock Exchange Survey—that almost half of all shareowners are in the $5,000—$10,000 a year income bracket. The median income of the 3,860,000 people who have become stockholders since 1956 is $6,900.
This would seem to suggest that an understanding of market operations is not too difficult to acquire, and that an attentive, interested broker is not too hard to find. It can also be assumed that these are shareowners with a fair appreciation of the value of a dollar and in no position to laugh off losses.
The goals a small investor can hope to achieve and the pattern of investment possible within the limits of a modest income will be outlined further on. The conclusion to be reached here is that investment is not a matter of enlarging a fortune you already possess, but of making available some money, however small the amount, to start with.
Regardless of your salary or income level, investment is possible if three conditions can be met:
1. If you are assured of a steady income.
2. If you are meeting your current running expenses and obligations.
3. If you have a cash reserve with which to meet unforeseen emergencies.
These conditions are, first of all, safeguards made necessary by the inescapable fact that stock prices fluctuate. Your judgment of when to buy, when to sell, and how long to hold should never be dictated by outside circumstances. Investment should be undertaken only with funds you can honestly and legitimately earmark as extra. With a regular income and your monthly bills paid, you know where you
stand and what amount can be put aside, in reserve, for any investment opportunity that arises. Or, of course, for emergencies. A sudden demand for ready cash—to pay a hospital bill, an insurance premium, or your income tax—should come, if possible, from your reserve, not from cashing in your investments. Whether your stocks are up or down, you are likely to take a loss—on the downswing because you may be selling at less than you paid, on the upswing because you may be selling at less than the potential.
A reserve also enables you to pick and choose. The fact that you have a few hundred dollars lying idle does not automatically mean the time is ripe to buy stocks. There’s no hurry. As the professionals say, “The market is always there.” If the trend of the market isn’t to your liking, or the price of a stock is higher than you want to pay, a reserve allows you the luxury of waiting for a more favorable situation.
Finally, a reserve permits investment over a period of time rather than all at once. As you learn more about the market, you will hear both sides of this argument. Some experts feel you should back what seems to be a good situation with all the investment funds at your command. Others will warn against getting greedy, and advise partial investment here and there, at different times, to spread the risk. This is not the place to discuss the merits of these techniques. The point is to give yourself the flexibility of moving either way your judgment dictates.
Remember: your income need not be large, so long as it is regular and enables you to put aside a surplus after you have taken care of your bills and the possibility of trouble. The surplus need not be large, either. Saving, as has been said many times, is a matter of regularity. No one considers $5 too small an amount to put into a savings bank; don’t worry if that’s all you can save each week for your accumulating investment reserve. In most markets, brokers usually can suggest a number of sound, solid stocks, offering liberal yields, that sell for less than $20 per share.
There is no rule about the number of shares an investor must buy. If you can afford a single share (plus commissions), a broker will get it for you. As a matter of fact, through the Monthly Investment Plan you can buy a fraction of a share, although the Plan requires a minimum investment every month.
To invest in the Forex, you will probably need a float of around $400 and invest from $1 to $10 per pip to start with, then reinvest your profits.
So there is a much smaller outlay required to invest in Forex, although it is more speculative.
Good Forex software will help to reduce the risks involved.
Free Forex Software For You To Use: Download Free Forex Software http://www.greatpublications.com/forex.htm
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There are several things to consider before you invest
Your Personal Situation: Your age, the state of your health, the number of dependents you support, the kind of job you have, whether you are a man or a woman, what kind of goals you have set for yourself all these, and more, are factors which will bear on your decision whether or not to invest.
There is no rule, no prescription governing these factors, either singly or in combination. Again, the decision is yours. It is well to wonder, however, whether your personal situation contains any elements which might conflict with your freedom, need, or desire to invest.
There is, for instance, no age more appropriate than another for investment. But it is conceivable that a young man might find family obligations, such as a new house, absorbing all his resources, that a middle-aged man might prefer to invest surplus funds in his business, and that an elderly man might feel he is too far along for the amount he is able to invest to bring him any significant return.
On the other hand, a young man, if he is able to invest at all regularly, can look forward to a fairly considerable estate in 30 or 40 years. A middle-aged man who finds the premiums for a new insurance policy higher than he feels like paying might decide that investments might help cushion the requirements of the years past 60. And an elderly man, with family responsibilities and obligations behind him, might decide that a sturdy stock returning a comfortable 5 or 6 per cent is better than the interest rate he can get at a savings bank.
As these, examples indicate, age—or any other single factor—immediately involves other considerations.
Good health helps guarantee steadiness of income. Poor health suggests the need for a larger-than-usual emergency cash reserve. A number of dependents may mean that there is nothing left over for investment, or that the surplus should be invested more conservatively than in stocks, or that the surplus, with reinvested dividends, could provide a college fund in 15 years.
The kind of job you have is important only in so far as it relates to steadiness of income. If you operate on a system of incentives, bonuses, and options of one sort or another, you may wish for more stability than stocks offer, in the kind of investment you undertake. If you have a year-in, year-out salary level, stocks may be just the thing to give you that wished-for extra edge.
Or it may be just the opposite. As a bonus man you may have learned to live comfortably with the prospect that one week may be up and the next one down. And, as a steady Joe, you may find it more alarming than it’s worth to have the price and value of your holdings vary.
Whether you are a man or a woman will not have much to do with your readiness to invest. For, surprising as it may seem, the Stock Exchange survey referred to earlier showed that there are more women shareholders than men. Out of the 12.5 million total, nearly 6.4 million, or 52.5 per cent, are women. For many, investment has become a normal and acceptable way to put money to work. There is no telling, either, how many women, having inherited stocks, have since taken a lively interest in investment as part of the responsibility of preserving their capital. Certainly brokers will tell you that women customers are no longer the rarity they once were.
The kind of goals you have will very often be bound up in just such things as whether you are young or old, in business or retired, childless or the chief of a tribe; and the achievement of many of them will require money. If that is so, investment is worth serious consideration. Some people, of course, may prefer to invest in books, or paintings, or travel, and for them the attention that must be paid to investment, or the attractiveness of the financial reward may just not be worth their while.
The story is told of the two salesmen who met in the club car on the train. “How’s business?” asked the first. “Oh, very good,” said the second, “and yours?” “Fine, fine,” said the first. “Got orders for a thousand gross last week. I sell buttons.”
“Really,” said the second. “I’ve had one order in the last three years.” “You call that good?” said the first. “Well,” answered the other, “you see, I sell suspension bridges.”
Like the salesmen, the investor must have a clear notion of his goals and expectations, must realize that what is normal and acceptable to someone else might not be what he would choose for himself.
The Kind of Person You Are: Consideration of your goals and their relation to investment brings up the final point of personal evaluation: yourself. For your goals are necessarily a reflection of your temperament and personality.
Go beyond your goals and see if you can pin down the traits and characteristics they stem from. Are your goals— and you—realistic? How do you regard money, and how do you handle it? Are you easy-come, easy-go? Or do you count the pennies? Are decisions involving money difficult for you to make? Are you on top of your budget, or always running to keep up?
When investing
Forex is more speculative so you will need to be prepared for more risks and swings in your profit and losses.
Using good Forex software will help to limit your losses on Forex.
Free Forex Software For You To Use: Download Free Forex Software http://www.greatpublications.com/forex.htm
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Investment for income is generally a long-term proposition. It implies stability and it makes particularly good sense for people who do not expect to become market experts or security analysts.
In fact, there are respected authorities who state flatly that the investor who seeks anything more than income from securities must be classed as a speculator, a risky role to play for any but the most sure-footed professional.
Long term, it should be noted, does not mean forever. It does not mean buy-and-forget. Whatever your holdings, you should review them several times a year and stay alert for news indicating whether the prospects are good that your companies will continue to maintain their present level of earnings.
Unless you have strong reasons for dissatisfaction with an income stock, however, there is little to be gained by switching. Generally speaking, there is not enough difference in the yield, say, from two good-quality utility company stocks to justify the expense of selling one and buying the other. (Although 100 shares of a stock paying $3 would produce $50 more income annually than one paying $2.50, it would take more than a year to rationalize the commissions and taxes paid to sell the latter and buy the former).
Dividends have their own way of accumulating. Given the steady upward trend of stocks in this century, a well-chosen security will reward the investor who holds it patiently. In even five years there can be a dramatic increase in yield. Take, for instance, Central Illinois Public Service CIP on the ticker tape—a moderately well-rated small utility company serving agricultural, mining, and manufacturing areas of central and southern Illinois. In 1953 it hit a low of 17⅛ which meant a 6.7 per cent return in a $1.20 dividend. In 1955 the dividend was upped to $1.35; in 1956 it went to $1.60; in 1958 to $1.68; and in 1959 to $1.76. It is now $1.92.
Meanwhile, its price, reflecting the increased dividend, has more than doubled. At a recent quotation of 44, the yield was a respectable, but not unusual 4.3 per cent. The investor who bought at the 1953 low, however, is now receiving a quite spectacular 10.7 per cent return.
At this point, day-to-day dips and rises in Central Illinois Public Service mean little to the investor of seven years’ standing. By now the dividend would have to be cut more than a third before he found himself where he started, and 64 per cent—to 70 cents—before he reached the 4 per cent return of the man who bought at 40. These drastic cuts are not inconceivable. But the cushion for the investor who bought in 1953 is considerable. There would have to be some quite violent reversals in the price and prospects of CIP before he would be moved to sell out.
The problem of stability is a beguiling one. For many investors it represents the compromise between safety and risk. Safety, as we will see, offers a discouragingly low return. Risk is the privilege of those who can afford it exhilarating when one has dared and won, but painfully, most truly felt by the loser. Somewhere in between, most investors decide, there must be a sensible course, commensurately rewarding and so there seems to be. Stability is the touchstone. The gauges of stability are many.
The one hazard is that they are inevitably based on past performance. No one can say for sure when the downhill slide will begin, when the earnings will diminish, when the seemingly unshakable dividend will be cut or passed.
One gauge, nonetheless, is the consistency and longevity of a company’s dividend payments. A company that has rewarded its shareholders through fair weather and foul must not only be considered strong, but reasonably proud of its performance and eager to maintain public confidence in it.
These records are easy to check. Any broker, for instance, can supply you with a list of the 50 companies with the longest records for consecutive annual dividend payments. It is an impressive group, headed by the Pennsylvania Railroad, which has managed to pay a dividend every year since 1848.
There are no dividends from investing
Using Forex software will help you to predict when and which ways different currencies are likely to move.
Free Forex Software For You To Use: Download Free Forex Software http://www.greatpublications.com/forex.htm
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by John Souter
The other day I went to an Investing
I had to admit, the majority of the investing ideas that he was covering were to me little more than a crap shoot. The money in your investment could go up and you may make money. But just as easily, the market could go down and you would lose your money.
That’s why I suggested to him the subject of real estate investing. The speaker (who is a licensed investment broker) said he really didn’t know too much about real estate. Although he “liked” real estate, he didn’t personally invest
Because I have done so consistently well with my real estate investments over the years, I challenged this opinion. Currently, with the sub prime bust, real estate prices are diminishing and it has certainly become a buyer’s market. If you understand what you’re doing, the best time to buy is when properties are selling low. That’s when you can take advantage of the best deals. Foreclosures have also doubled over the last year and you can find many of these properties priced way under their true value.
When people buy more than they can afford, and then are forced out of their homes through foreclosures, where will they go? The vast majority will end up in a rental. How does that affect the price of rentals, even in a bad market? It drives them up. The more urgent the need becomes, the greater rents will go. That’s why it is definitely a great time to be a landlord. The demand for rentals will continue to go up.
Some real estate is certainly going down in price, but you can be sure that its value will start climbing again once the market settles out. Overall the real estate market is the best place to invest. And our experience over the last 35 years has proven this.
John Souter lives in paradise. His company provides Maui weddings in Hawaii. He is also an active investor and an alumni of Nouveau Riche University. For more information on real estate investing, take a look at his website at: nrusuccess.com..
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by Myles Kirk
With oil prices over $80 per barrel, storm activity in the Gulf of Mexico and a cold winter predicted ahead elsewhere, not to mention worldwide demand for crude oil poised to rise again during the fourth quarter of 2007, now is a great time to be an oil and gas junior. One company taking full advantage of the sector’s upswing with successes of their own is Montello Resources (TSX-V: MEO). This emerging oil and gas company is engaged in drilling and exploration activities on their properties in Canada and the United States — with potential for blue sky payloads in both zones, particularly in Tennessee. Recent successes have garnered Montello a little increased investor attention in the past few weeks, with positive re-completion in Alberta and drilling approaching depth in Tennessee.
The company has a broad investor base, with approximately 150 million shares outstanding, and with new investors piling on, current trading volume is well up over one million shares a day. This increased volume is not surprising, considering that share prices in Montello have gained over 25% in the last month, not to mention the fact that Montello has now surpassed its 12-month high. Last Friday, more than 19 million shares MEO shares changed hands. On that day, the company was the leading volume trader on the TSX Venture exchange. On Monday, Montello was still trading exceptionally high at over 10 million shares.
Some of this success can be attributed to Montello recently announcing (October 4th 2007) positive re-completion results for its jointly owned Pincher Creek project — Montello owns a 25% interest with Paramount Resources holding 25%, a private company owning 12.5%, and the remaining 37.5% being retained by the operator, Pennine Petroleum Corp (TSX-V:PNN). The project, which covers over 4,800 acres, is located approximately 175 kilometres south of Calgary, in the prolific Pincher Creek Field. Since 1947, the field has produced approximately one million bbls of oil and 600 BCF (billion cubic feet) of gas, with estimates of over 220 BCF of gas still remaining to be produced. The region itself, which includes such fields as: Lookout Butte, Turner Valley, and Jumping Pound, have produced more than one trillion cubic feet gas and over 100 million bbls of associated liquids.
Montello’s JV partner Pennine recently completed (September 27th 2007) two 60-tonne fracture simulations on the Brown Sand and Cadomin/Kootenay section of the Pincher Creek project, with results uncovering two condensate zones. Both tested between 40 and 46 degrees, plus associated gas, with initial extended flow test results of over 330 boepd where none were pumping before.
The Brown Sand zone yielded an average production of 140 barrels of fluid a day with an initial water cut of 60% for a net 56 boepd and is expected to increase as frac fluid further drains. Montello is planning further exploration in the Brown Sand zone to assess feasibility.
Preliminary swab and flow results for the Cadomin/ Kootenay formation were more promising, having returned an average of 225 barrels of fluid a day with no water cut, and as much as 500 mcf of gas per day which can potentially translate to an additional equivalent of over 70 boepd.
Pennine has announced that they intend to install pumping equipment and the required production facilities to test the Cadomin/ Kootenay zone, and following positive results, may submit a Commingling Application to the Alberta Energy Utility Board, in order to take full advantage of the well. An existing pipe line is accessible to transport the gas, with plans for liquids to be taken out by truck to a processing facility. Pennine plans to announce the stabilized liquid and gas production rates following stabilized production.
With the success of recent drilling activities in Alberta, Montello and Pennine plan to follow sand development across the Pincher Creek structure and access hydrocarbon-baring sand via existing well-bores.
Montello is also involved in exploration and drilling activities (with JV partners Great Northern Oil Sands Inc. and Austin Developments Corp.) on its Morgan Highpoint project, located in the Tennessee Appalachians. The project is situated in a precarious but prolific region, near the spot where in 2002 Pryor Oil suffered a massive blow-out on its Howard-White #1 well when its drill penetrated an area containing highly pressurized oil. Incredibly, hydrocarbon fluids spewed up and out of the ground at a rate of 12,000 bbls a day and caught fire. The government stepped in and halted work on the project — permanently.
On its neighbouring property, Montello is using advanced techniques to literally “dig deep”, in an attempt to find the source of the Pryor Oil blow out or similar pockets. Montello recently announced that drilling at its John Bowen # 2 well had passed 7,780 feet in the Rogersville Formation and entered the Rome formation at 7,850. The location of the monster payload that caused the blow-out at the nearby Howard-White #1 remains illusive, but a possibility as the company continues toward basement, which is a first for the area — and is believed to be between 8,500 and 9,500 feet deep.
Resourcex Investor asked Marc Davis, a director for Montello, if he was happy with the rate of progress for the Tennessee project, and why no one else had ever tried or been able to drill this deep in this area before.
“It has been tough going, you know. This is a difficult environment to work; the rock is very dense. At the same time, we’ve seen very encouraging results and believe ourselves to be a few days away from hitting basement.”
Davis continued, “As for how we have been able to drill deeper than anyone before in this part of Tennessee, it has everything to do with money. Other companies in Tennessee simply have not had the opportunity to go that deep. But we think we could be close to a sizable pay off here.”
The cost of the well, initially estimated at $3 million US, (Montello paid 10% of this) has escalated to US $5 million, to date. Early in October, the company announced, “A Supplementary Authorization For Expenditure (”AFE”) of USD $1.7 million has been issued to the partners based on their earned interests in the Test Well being Montello as to 55%, Austin as to 40% and Great Northern as to 5%. All partners have paid their proportionate share of the cash call associated with the Supplementary AFE.”
When asked which property he thinks is most important to Montello at the moment, Davis replied, “Tennessee as it has the greatest potential, but Pincher Creek [in Alberta] is money in the bag.”
With the recent activity at both their Tennessee and Alberta projects, Montello seems to be garnering more investor interest than ever before. On October 12, volume trading surged past 13 million shares, pushing the stock price past $0.20 for the first time in 12 months. And the volume has continued to be very heavy. Whether this activity is due to speculation of success in Tennessee or Alberta (or both) is hard to say. But the excitement in MEO’s stock charts is palpable.
This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.
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