Archive for October, 2007
by Andrew K. Burger
The situation at Ascendant Copper (TSX:ACX) in Ecuador might serve as a snapshot of the enormous risks and rewards facing management at mining companies—and their investors—worldwide, but particularly in Ecuador and South America, where the volatile political landscape has shifted towards socialist-populist democratic inspired government action in recent years.
On the upside, 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 metal 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.”
On the downside, the Correa government on September 25 announced the formal suspension of Ascendant’s mining and community development activities in the Junin area in an effort to defuse tensions, an announcement Ascendant said was only a repetition of a previously announced order.
These tensions boiled over in December of last year on Ascendant’s agricultural property. Anti-mining activists confronted a third party contracted agricultural firm’s Intag workers and security guards resulting in almost 60 people being held captive by activists, and locked in the local community church for several days until order was restored by Ecuadorian police.
Ascendant in Ecuador
“ACX has magnificent assets in a country that has not had an operating metal mine for about 50 years. There are a few artisanal gold miners causing havoc with the environment with mercury that have the approval of the Government and that is the extent of metal mining in Ecuador,” Haigh told Resourcex.
Ascendant’s two main stakes in Ecuador are the Junin and Chaucha prospects, two NI 43-101 compliant copper-molybdenum properties. The Junin prospect has an inferred, NI 43-101 compliant resource estimate of 982 million tonnes. A drilling program is under way at the Chaucha property on the western flank of the Andes, the results of which are expected to up its combined resource estimate, according to Haigh.
Though preliminary indications of ore grade at the copper porphyry deposit at Chaucha are not as high as those at Junin, they are still high enough—above 0.4% copper excluding molybdenum, gold and silver credits—to warrant further exploration and development, particularly given the fact that the Pacific port of Belo lies just 40 kilometers away, he pointed out.
“The Junin deposit is supported by 10,000 meters of historical drilling and the Chaucha deposit is supported by 13,800 meters of historical drilling with about 10,000 meters of recent drilling by the company. We will have the current drilling sanctified by a NI43-101 report, and it looks like the resource package should increase to about 300 million tons,” Haigh elaborated.
“The Chaucha project would support a 30,000 to 40,000 tonne-per-day operation that would produce about 100 million pounds of copper per year at a cost of $1.40 per pound. At $3 copper, it could generate cash flow of about $160 million a year for 20 years.”
Given the company’s 70.8 million shares outstanding and excluding deductions for non-operating and non-cash flow expenses, liabilities and other deductions, this would translate into annual earnings per share of $2.26. Taking into account options and warrants, this would result in a rough annual EPS of $1.69 on a fully diluted basis.
Ascendant’s management believe that world copper prices will remain high for the rest of this year and into next. “We think that reduced residential copper use in the States will be offset by increased copper use in hybrid gasoline-electric cars, which is double that of conventional cars and that China will continue to use all the copper they can get their hands on. We think that an average price of $3.18 per pound is achievable in 2008,” Haigh commented.
The Vagaries of a Shifting Political Landscape
Just how damaging the potential threat of socialist inspired, populist government intervention in mining projects is for mining companies and their investors is evident in the activity of Ascendant’s shares over recent months.
The company’s share price has been in steady decline since its November IPO, It has been trading downwards since July, when it was around C$0.40, only recently making slight gains to the C$0.20 per share level. Problems with environmental activists and with Ecuadorian politics have been the main causes.
“The problems that we have had and are having at Junin are the result of a massive campaign of ‘no mining in Ecuador’ conducted by a local NGO. This particular NGO has been operating since the mid-1990s and were violent objectors to Mitsubishi when they were drilling there from 1993 to 1997 on the same deposit.”
Despite all the promise Junin and Chaucha hold, and not just for Ascendant, further development at Junin will have to wait until the dust settles and Ecuador’s government establishes its new constitution and set of mining laws and regulations. In the meantime, larger mining companies such as Aurelian and Dynasty are moving forward on mine development in Ecuador; and work on Ascendant’s Chaucha and Telimbela projects continues. Furthermore, Ascendant is still moving forward with their Rio Tinto strategic partnership to develop additional properties.
In the meantime, Ascendant is shifting direction. Management began deploying a new business strategy
Ascendant is currently negotiating to acquire three copper assets in the western US. Announcements are expected in two to three months. “This should provide at least one cash flowing operation in 24 months and two in 36 months. The cash will be used to advance and protect the Ecuadorian assets,” Haigh commented.
NEXT WEEK: Part two of Andrew Burger’s feature story on Ascendant Copper.
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 Self Directed Advisor
MAKE ROOM STOCKS AND BONDS -Alternative investments are becoming an increasing popular choice for those seeking to truly diversify their retirement plan assets. A growing number of investors are learning they can invest
With the fluctuation in the stock market
Examples of Alternative Investments for a SDRA*-
· Residential/Commercial Real Estate
· Foreclosures
· Business Start ups
· Franchises
· Tax liens, business loans, and mortgages
· LLC’s
· Private Stock Offerings
Other examples of use for a SDRA*-
· Raise private capital
· Private mortgage lending
· Invest in a friends venture
· Lend money to a local developer
· Pool funds with others for a larger investment
· Invest in what YOU know
As long as the alternative investment is for investment purposes only and does not create a prohibited transaction with a disqualified person, the list is virtually ENDLESS*. Although, regardless of the type of investment, certain rules and regulations remain constant.
What your Financial Adviser may have not told you.
Many people ask, How come I haven’t known about this?
Many Financial Professionals may lack the knowledge and resources on the subject and/or Financial Professionals may be disinterested in the SDRA options. Why you may ask. First, they may be concerned about the liability associated with the purchase and/or administration of any nontraditional investment, IRS guidelines must be observed. Second, they may not have the license to advise on certain types of alternative investments. Third, and possibly the most obvious reason, they may not profit from alternative investments as they do with traditional investments such as stocks, bonds, mutual funds, etc. A misconception has been created that all that is allowed in a Retirement Account are the traditional assets, stocks, bonds, and mutual funds to name a few, this is absolutely FALSE. Consequently, many of Financial Professionals do not promote the fact that clients can choose from a variety of investment options for their retirement accounts*.
Don’t’ limit the opportunity to possibly maximize the investment potential of a retirement account because of the lack of knowledge of most Financial Professionals. Be advised, there are a few Financial Professionals who do understand and embrace the concept of true diversification with a SDRA. Investors should work with a Financial Consultant that is a specialist and can advise on traditional and non traditional asset investing
So, are you one of those investors who is no longer satisfied with waiting for returns on traditional investments such as publicly traded stocks, bonds and mutual funds? If you want to explore the possibilities of putting your retirement funds in alternative investments you should enlist the help of a SDRA Consultant that specialize in the field, to educate and advice you through the process, due to the strict rules and transaction guidelines the IRS has sent forth.
*Some restrictions apply. It is important to consult with a professional regarding
IRC Pub 590 regarding regulations before investing.
**Securities offered through USWA, LLC, Member SIPC, and advisory services through USFA, LLC, a registered investment advisor.
Capital Market Solutions, LLC (“CMS”) is a full service Financial Service Firm who is bridging the gap between traditional and non-traditional investing. They advise investors on ALL the investment opportunities that exist today for their retirement accounts. At CMS (through USWA), clients have the option to invest in tradition investments such as stocks, bonds, and mutual funds to name a few. But CMS takes it one step further by also advising clients on non-traditional investments-something most banks, brokerage firms and other IRA sponsors won’t permit you to do**.For more information you can visit www.capitalmarketsolutionsllc.com
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by Wendy Mitchell
An expected shortfall of stockpiles has investors eyeing a little-known but commonly used metal as a way to improve the mettle of their portfolios.
Germanium is a brittle, silverwhite metalloid that has many properties similar to silicon. It’s used in a variety of commercial applications, including fiber optics, and is a particularly important semiconducting material paving the way for smaller and more capable electronic chips.
It also plays a significant role as a lifesaving commodity to the U.S. military, providing vastly superior night vision capabilities. In fact, germanium was added to the National Defense Stockpile in the early 1980s.
But why the recent germanium interest by investors? China.
The country controls the lion’s share of the world’s germanium reserves and has imposed restrictions on germanium sales and distribution. Currently, America’s stockpile of germanium is expected to be depleted within two years, and demand is only expected to increase. As a result, North American-based germanium miners seem like an attractive pick for investors.
For instance, the publicly traded company War Eagle Mining (TSX: WAR/Pink Sheets: WARGF) recently announced its focus on becoming the germanium market leader in North America.
“Germanium is playing an increasingly important role for the military and consumers, and the Chinese germanium market has a distinct lack of transparency. That could make Chinese investments seem like a risky choice,” says Terence F. Schorn, the company’s president. “Our background and experience leaves us well positioned to lead the North American market.”
Today, the company is actively exploring and developing new sources of this precious by-product in Chihuahua, Mexico-and investors have taken notice. Adding to the firm’s attractiveness are the recently expanded uses for germanium, including night vision applications for luxury cars, LED’s, SiGe semiconductor technology, IBM’s flash change memory, and a boom in the Asian fiber-optic market.
Investors can learn more about germanium, its uses and the germanium market at the Web site www.wareaglemining.com.An international squeeze on stockpiles of a certain metal has boosted interest in North American mining companies.
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by John Hurst
Since the turn of the 20th century, the green hills of Tennessee have largely remained a patchwork of small, undisturbed private land holdings. Consequently, any oil exploration of note has been done by family businesses and small to intermediate oil and gas companies, while Big Oil has largely passed the Appalachians by for larger, easier pickings in Texas, Oklahoma, Kansas, Louisiana, and California.
Besides not having to deal with so many small landowners, amassing large land packages was a motivator for looking elsewhere in the early years of US oil exploration. More often, according to sources like the US Geological Survey, it was the technical nature of finding oil in the Appalachians.
Montello Resources Ltd. (TSX.V:MEO) is one of only a handful of oil & gas companies to commence a multi-million dollar oil and gas exploration program in the technically challenging Appalachians Mountains and Foothills. The upstart company from Calgary, Alberta, recently won over government approval besides local resident support to earn a shot at re-drilling two of the most exciting oil prospects that the State of Tennessee has seen in decades. Montello is undaunted by the prospect of being one of the few companies to drill far deeper than most would contemplate in this under-developed but emerging oil & gas state.
Bill Cawker, who heads Montello, rightly echoes country comedienne Minnie Pearl: “We’re just so proud to be here,” he says, “because the advice, experience, smart field savvy, overall execution and technical expertise of our Alberta professionals goes such a long way here.”
“Everyone we work with says, “You have such a professional well site! It’s amazing that you are a little company from Calgary. Anyone coming here would think this is run by Conoco, Phillips or Shell, not a small Canadian company like yourselves.”
Cawker says he believes that if Montello had not posted photographs of its well site on the company’s website, some people might not believe the progress they’ve made. Montello has chiseled a well site 250 feet by 250 feet by some 30 to 40 feet deep out of the rock.
“This is the type of project normally tackled by a company much, much bigger than ours, so we come by the upstart or underdog tag honestly here. We like proving ourselves and relish the fact that we are showing up all the naysayers to date.”
Montello’s drill site is situated at the heart of a scenic farming region that offers few discernable clues as to the potentially prolific oil reserves that are believed to exist completely untapped thousands of feet below Morgan County’s lush green pastures. Hence, the State of Tennessee Department of Environment and Conservation, Division of Geology, Oil and Gas Program, has officials monitor Montello’s work, closely and constantly. Cawker says Montello welcomes the assistance of top flight geologists from the state while drilling the John Bowen #2 Well.
A drill permit application on the Morgan Highpoint Project #1 well (officially known as the John Bowen #2 Well) was granted by the Department of Environment and Conservation, in July. Construction of the well site was completed to the satisfaction of the Department and its oil and gas inspector walked the site and presented a hard copy of the approved Drill Permit in person on Monday, July 23.
Montello and its joint venture partners are drilling on the property, 164 acres that adjoin the Howard family farm property near the community of High Point in rural north-central Tennessee, one hour and 40 minutes drive north of Knoxville. The drill location is a mile from the site of Pryor Oil’s Howard White #1 well — the original name of an over-pressurized gusher that came to be known as “the Blowout Well.” The oil released from the well was a light crude oil (38.1 API) with low to medium viscosity. It flowed at up to 750 barrels per hour, acccording to the well’s operator. But the subsequent blow-out caused a fire and a minor oil spill that essentially put the operator out of business.
The well has languished in a legal limbo ever since.
However, a nearby well named the John Bowen #1 Well (originally called the TexFlora well) also struck pay-dirt of up to 800 bpd in November 2003, but encountered problems of an entirely different nature and entirely unrelated to the well’s potential for commercialization: After the well was shut-in during the fall of 2003, owner Jerry Walsack took a Thanksgiving vacation at his home in Florida. While there, he died unexpectedly and as a result the John Bowen #1 was never put into production.
Now it’s Montello’s turn to tap into Morgan County’s previously elusive oil reserves. And this plucky junior is no stranger to major challenges and high stakes rolls of the dice, as recently appointed company president, Bill Cawker, is keen to point out.
“Montello has been around just about forever,” he says. “In 20 to 25 years the company has gone through three or four incarnations, with at least three different management groups doing mineral exploration, such as diamonds in North Alberta, shallow oil and gas, and so on.”
The current 2007 drilling programs in Tennessee and Pincher Creek, Alberta could be the company’s elusive ticket to the next level. Judging from the demonstrated oil and gas structures that caused the Howard White #1 blowout, John Bowen #2 has the potential to provide major shareholder growth.
The company and its management team have certainly risen to the occasion for their shareholders as they’ve devoted considerable time and energy, as well as big dollars to ensure that the company is marshalling the best technological know-how, the best equipment and the best consultants in the business to get the desired results from this high-impact drill program.
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.
The author and ResourcexInvestor.com are not shareholders in the companies herein mentioned, and the author, as an employee of Resourcex Publishing Corp is expressly prohibited for owning any securities about which they may write for a period of 30 days prior to and 30 days after initial publication of the article in which the securities of any company are mentioned.
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
A grassroots company no longer, porphyry deposits have encouraged Yale Resources Ltd. (TSX.V:YLL) to expand its La Verde land package in Mexico by 400 hectares. Often a holy grail for explorers, porphyry deposits — all the way from Alaska to Chile — make for great exploration targets. They are typically low grade, promise immense tonnages and create your “As Seen on Google Earth”, open-pit mines.
Yale Resources’ La Verde project, a copper-zinc-silver-gold property located 45 km northwest of Hermosillo, Sonora State, Mexico, has at least six deposits, with workings on them dating back to the early 1900’s.
“We now have known mineralization of potentially economic grades. It’s not a grassroots exploration play. These are deposits and we are going to determine how large they are as quickly as we can,” stated Ian Foreman, the Vancouver company’s geologist-president.
La Verde Grande (The Big Green) is the project’s main deposit. Yale’s first program was done there. Land acquisitions adjoining its northeast corner cover the La Sierrita copper-zinc-molybdenum porphyry that was drilled in early 2000’s by Freeport McMoRan. In its amalgamation with Phelps Dodge, that behemoth chose to leave Mexico and the project was dropped. Another Canadian junior had the project in the 1990s, and dropped it too.
“In each case, the company would drop the property for larger economic reasons, not geological reasons,” Foreman said. “Either the metal prices were too low or the Canadian exchange rate was too high or the world markets were weak…but nobody came to a conclusion with regards to the geological potential of the project, and that was really key for us.
“Freeport-McMoRan drilled eight holes, of which seven are on land that Yale controls. Five of those holes intersected a porphyry. Each of those holes has long intervals of anomalous copper, zinc and molybdenum mineralization. We know that over this four-square-kilometer area, that’s a huge exploration target, and we’ve added a large additional target to the property,” Foreman said.
“So we know that there is a large mineralizing system present. The association between the La Sierrita porphyry and the skarn deposits we are concentrating on at the present, is currently unknown. Is it the source for all the mineralization that has bled into the limestones and created the skarns, or maybe that is indicative of additional porphyry present and maybe the additional porphyry is what is feeding these skarn systems and therefore is a genuine porphyry target on its own.”
The La Verde Grande mine has three principal levels — two of which are about 100 metres in length — and recent field work has identified two additional levels vertically higher, which indicate that there is the potential for additional resources to be defined both up and down dip. The northeast extension of the mine, located 30 metres to the north, has additional workings that continue for another 30 metres along strike. The northeast extension has a second level of workings, located 23 metres below, which have visual mineralization. These were not sampled in previous exploration campaigns but have been sampled by Yale personnel. A three-week rehabilitation program was required before sampling could begin.
A total of 175 samples have been taken and all samples have been submitted to ALS Chemex labs in Hermosillo. Samples were taken every five metres as vertical chip channel samples along the walls of the workings. This sampling program also included initial samples from the historic workings that are all within a radius of 150 metres of the La Verde Grande Mine. In each working, skarn mineralization with visible copper mineralization was encountered.
There has been only very limited drilling done at La Verde. Yale’s exploration strategy
Trails leading up to the La Tescalama prospect, some 250 metres up the hillside, are being cleared so that the crews will have access. The La Tescalama prospect saw significant historical development as the principal working extends in at least 40 metres and exposed strongly copper mineralized skarn throughout.
“It’s our impression that all previous exploration has tackled these small, high-grade deposits individually,” he stated.
“How are they connected? Are they connected, and if so, what is the key that ties them together? Right now, we are trying to get a feeling for how much mineralization there is. In the La Verde Grande area, there is a mine with three levels of workings; there is an extension off to the northeast with two levels of workings that show the strike length is a deposit in the neighborhood of 150 metres. To us, that already is twice as long as what we understood the deposit to be when we first optioned the property. Now, in just simple exploration, we’ve identified six other small pits or workings that the old-timers had found mineralization, back in the day when they found just something interesting.
“That, to us, indicates that there is genuine exploration potential not just in the 150-metre radius surrounding the mine, but in the surrounding land.”
Much of the site is covered by calcrete, a calcium alteration product up to several metres in thickness and more difficult to explore. All will have to be reckoned with before Yale decides where to drill.
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.
The author and ResourcexInvestor.com are not shareholders in the companies herein mentioned, and the author, as an employee of Resourcex Publishing Corp is expressly prohibited for owning any securities about which they may write for a period of 30 days prior to and 30 days after initial publication of the article in which the securities of any company are mentioned.
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 Christina de Wit
Despite the sight of a black bear on the September 7th-9th property tour of Commerce Resources’ (TSX.V:CCE) Blue River Tantalum-Niobium Project, the mood was nothing but bullish for a group of fund managers, industrialists, major newsletter writers, metal traders and senior analysts. Like bears to honey, a total of 105 investors– including key players in the German finance and industrial worlds– were drawn to the property by the company’s announcement of its discovery of two new carbonatite anomalies– the Lower Gum and the Lower Switch Creeks at the company’s Upper Fir Deposit. The Lower Gum geochemical anomaly is a minimum of 1,000 meters long and between 200 to 400 meters wide with geochem sample concentrations of 3,211 g/t Nb2O5 and 75 g/t Ta2O5, and highly enriched with light rare earth elements lanthanum (La) at 1,905 ppm; and cerium (Ce) at 2,666 ppm. The Lower Switch is a minimum of 700 meters long and 50 meters wide, with soil assays which returned values from background concentrations to 2,354 g/t Nb2O5. The anomaly extends through the historical trench location, where carbonatite samples collected by Anschutz Mining (Canada) Ltd., ran 21 and 2,930 g/t Ta2O5, and averaged 514 g/t.
The Blue River Project is located near Blue River, British Columbia. Commerce owns 100% of the 500km2 claim group. Infrastructure in the area is excellent, with proximity to rail lines, roads, and power. The first carbonatite bodies were discovered in 1949, when the property was first examined for its vermiculite potential. Commerce acquired the property in 2000 and has conducted bulk sampling, ground geophysics, stream sampling and drilling to date. A 2007 report prepared by independent consultant Gorham has outlined an indicated resource of 8,600,000 tonnes with 208.2 g/t Ta2O5 and 1,372.6 g/t Nb2O5 and an inferred resource of 5,500,000 tonnes with 208.2 g/t Ta2O5 and 1,349.9 g/t Nb2O5. With further drilling, there is a very good likelihood of finding new reserves.
Carbonatites are rare, peculiar igneous rocks derived from deep within the Earth’s crust. They are the host rocks for tantalum and niobium- which are usually found in tandem, along with other Rare Earth Elements (R.E.E.s). Tantalum (named for Tantalus, a figure in Greek mythology) is essential in the manufacture of most electronic devices due to its having the highest known capacitance of any metal. According to the company’s website, “tantalum ores are found primarily in Australia, Brazil, Canada and central Africa, with some additional quantities originating in southeast Asia. The average yearly growth rate of about 8 to 12% in tantalum demand since about 1995 has caused a significant increase in exploration for this element”. Niobium (named for Tantalus’ daughter, Niobe) is an additive used in steel-making. Its presence as an alloy triples steel’s tensile strength. This is of critical importance for pipelines, aerospace, and the automotive industry.
Visitors to the project were treated to a presentation by Bill Serjak, the world’s leading tantalum and niobium market analyst. Mr. Serjak expects a double-digit increase in the demand for tantalum over the next two years.
Commerce’s goal is to become the world’s leading source of high-quality tantalum and niobium. The next phase of development involves permitting, and an environmental study conducted by Gartner Lee, a top environmental consulting firm.
The company has also researched processing methods as part of its pre-feasibility preparations. Metallurgical work carried out in 2004 confirmed recovery rates for Ta and Nb of 83 to 97% of contained metal values. These recovery rates give the company a comparative advantage over producers in other parts of the world. Australia’s Sons of Gwalia, currently the world’s largest tantalum miner, has published a much lower recovery rate of 55%.
On the spot market, tantalum usually trades at around $25-$35/lb. The spot market is supplied by small producers in African countries such as the Democratic Republic of Congo — with its attendant instability. These sources are not sanctioned by the UN; the tantalum concentrate that comes from a UN sanctioned country like Australia or Canada is worth twice the price of that on the spot. On a long-term contract from HC Starck, the world’s largest tantalum processor, tantalum oxide will sell for $140-$150/lb. Presently, the world’s largest producer of niobium (from pyrochlore) is the mine at Araxá in Brazil. Niobium is currently trading at around $29/lb– quadruple January’s price.
With solid backing from German financiers and the people of Blue River– many of who are shareholders– the company has support for the project from start to finish. The company’s most recent private placement– originally intended to widen distribution into the US, had the unintended (but happy) consequence of having its original German investors strengthen their positions. Because the world trade in niobium and tantalum is done primarily on long-term contracts, it is in the interest of major industrialists to take an interest in developing new, high-quality, reliable sources in politically stable countries.
The company is in an unparalleled position to meet this demand. Alexei Rukhlov, the geologist in charge of the project– considered one of the leading experts on carbonatites in the world– describes the polymetallic deposit as “the only one of its kind in the world.” Highly-economic carbonatite deposits of this size and quality are exceedingly rare. With growing demand and a market which trades almost exclusively on long-term contracts, it is critical that new, stable, low-cost sources of tantalum and niobium are discovered and developed.
Commerce has had the foresight to build its market from the ground up by appealing to a core of long-term institutional investors, in effect, the end buyers of the company’s products. So far, the market has responded favourably to this methodical approach– the company is trading in the $1 range. Investors can anticipate healthy long-term gains, without the volatility issues that affect precious and base metal markets. Napoleon Hill, advisor to U.S. Steel founder Andrew Carnegie and author of Think and Grow Rich, said, “Persistence is to the character of man as carbon is to steel.” Or, in Commerce’s case– as carbonatite is to steel– and success.
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 Tom Long
I’ve seen some new traders have some incredible winning results in a short period of time. However, quite often they will lose those gains as just quickly. They don’t do anything different and will come to us for some sort of insight. The reason is usually the same in that they forget to first identify the mood of the market before finding their trade.
What I mean by that is to first identify the direction of the trend on the daily chart and then to find your trade. If the daily trend is up, then only look for buys and if the daily trend is down, then only look for sells. If the daily chart shows a range bound market, then look to buy above support and sell below resistance. If you are not sure of the trend, then the play is to move onto another currency pair where the trend seems obvious.
I see many traders buying the pullbacks on a currency pair that is in a strong uptrend and enjoy tremendous success. Then when the trend stalls out or changes, they continue to buy and may lose all of the gains. Being on the right side of a trending move can result in some great trades while trading against the trend can lead to many quick losses.
A good way to see if this may be one of your problems is to run a report on your FX Trading Station to see all of the trades you have made. Then take a look at the daily chart and note where you entered into the trade. Now ask yourself how your results would have been if you had only traded in the markets where you could confidently identify the trend. You may find that adding this simple first step of identifying and trading with the daily trend increases your chance of success.
Tom Long is an instructor of FXPowercourse, an online trading course from FXCM, a broker for forex trade.
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by Doug Hadfield
Teryl Resources Corp. (TSXV: TRC) operates within the intelligent realm of closeology and superlatives in Alaska and Arizona. By closeology I mean, of course, that the company is exploring for gold and copper very close to existing or previously producing mines. By “superlative” I mean that these mines are exceptionally large and profitable.
At Gold Hill, for example, Teryl is drilling three targets just three miles away from Phelps Dodge Corp.’s Lavender Pit. If you know mining or tourism, then you know that Lavender Pit was one of the biggest mines in the world. Between 1954 and 1970, Phelps Dodge extracted 75 million tons of gold, copper and silver ore from this open pit mine of giant proportions. Check out the satellite photographs on Google — it’s a sight to behold.
At Lavender Pit, mineralization was low-grade disseminated chalcocite with local spots of other copper and zinc sulfides.The deposit evenly blanketed the area in a brecciated intrusive porphyry plug adjoining altered Paleozoic limestones along the Dividend fault. Freeport-McMoRan Copper & Gold Inc. has fired up the drills at Lavender Pit again due to the historically high copper prices caused by the present superbull in mineral commodities. Freeport-McMoRan paid $26 Billion for Philips Dodge in March this year.
At this stage, it may be difficult to say that the mineralization at Gold Hill is the same or similar geological structure to Lavender Pit or the large low-grade Cochise Project area — hence the current drill program. As well, Teryl announced in April that it had purchased aeromagnetic data for the project area, and that the information from that lead to a recommendation of an induced polarization survey, to test for the presence of disseminated sulphides at depth.
To date, rock samples collected on the property have indicated mineralization up to 2.54% copper. According to Teryl Resources’ president and CEO, John Robertson, drilling is to commence “soon this year — as soon as a drill is available.” John told me this when we met recently for coffee to discuss Teryl’s upcoming growth strategy
The theme of superlatives continues in Alaska, where Teryl has options on several properties, including a 20% interest (Kinross Gold holds the other 80%) on the Gil Claims. The Gil property covers 2,700 hectares and is actually adjacent to the Fort Knox Deposit — Kinross Gold’s operating mine, whish is the largest gold mine in Alaska. The True North Mine, also operated by Kinross, is less than 10 miles away.
John says, “The key to these mining properties is infrastructure. Not only the infrastructure, but the accessibility. For example, Global Gold is going to spend $2 billion to put their mine into production because the infrastructure’s not there. This property is right off the highway. The workers can stay in Fairbanks.”
According to Kinross’ technical report, the Fort Knox area has been actively explored for placer gold deposits since 1902, when Felix Pedro discovered gold in Fish Creek located downstream of the Fort Knox deposit. Since that initial discovery, the Fairbanks Mining district has produced in excess of 8 million ounces of gold.
Teryl Resources acquired the Gil claims in 1989, and in 1991 entered into a joint venture with Fairbanks Gold Mining Incorporated (FGMI) and Melba Creek Mining Company
Inc. (MCMI). Fairbanks Gold Corporation was subsequently acquired by Amax Gold, Cyprus Amax, and finally Kinross Gold. FGMI and MCMI are both wholly owned subsidiaries of Kinross Gold. As such, one wonders about the fate of Teryl Resources with a partner such as Kinross so close and so hungry for talent and resources. By way of comparison, consider that Kinross’ nearby True North gold deposit (located two miles north of Teryl’s West Ridge property) was purchased by Kinross in 1999 for $94 million in cash and stock.
With the development of the nearby Fort Knox mine beginning in the early 90s, continued exploration of the Gil claims was a natural progression for both Kinross and Teryl. On the Main Gil and Gil North Zones, exploration identified widespread structurally-controlled gold mineralization. Extensive drilling, sampling, and trenching between 1992 and 2004 also defined the extent of gold mineralization in these areas and developed numerous exploration targets.
In 1999, Kinross Gold and Teryl Resources announced a preliminary, non-43-101 compliant resource calculation for the Gil project. Indicated and inferred resources were estimated at 10.7 million tons grading 0.040 ounces per ton gold — 433,400 ounces. That is at present very liberally valued at $60 million in-situ (in the ground), or $1.50 per share. Last time I looked, which was the morning of September 24th, Teryl was trading at $0.17. Of course, when I say “in-situ”, I mean there are millions in costs associated with bringing any mineral resource to production.
In this case, however, it behooves us to point out that having Kinross as a partner will actually save Teryl millions in costs, should any future resource be brought to production: Kinross has a large mill already onsite with a capacity of 50,000 tonnes per day. All the infrastructure such as roads, accommodations, utilities, etc., are in place at Gil.
John commented on the importance of the Gil project to both Teryl and Kinross: “The stage we’re at with Kinross Gold is they’re evaluating the property for additional targets to be drilled next year. There’s a possibility of drilling this year which depends on availability of drill rigs and getting their budget approved.
“Kinross is aggressively seeking additional ore to feed its Fort Knox mill. What we want to do now is increase the tonnage. There’s a possibility of the zone extending further to the north and maybe to the east as well. If we can increase the reserves to 1 million ounces gold, it would be worth it for them to ship it to their nearby mill.”
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.
The author and ResourcexInvestor.com are not shareholders in the companies herein mentioned, and the author, as an employee of Resourcex Publishing Corp is expressly prohibited for owning any securities about which they may write for a period of 30 days prior to and 30 days after initial publication of the article in which the securities of any company are mentioned.
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
Article Directory: Article Dashboard
by The Skilled Investor
The securities industry knows that chasing historical performance is bad for individual investors, but they encourage this behavior by publishing historical performance charts and 4 star and 5 star ratings, which are also largely meaningless. For the industry not to know would imply that many very smart professional investment managers have had their heads in the sand about decades of financial research.
The securities industry and many of its brokers and investment advisors know that low cost index strategies are better for individual investors. However, the “active-management-beat-the-market” industry crowd will not make any money off of you, if they tell you that. They have to push the “we deliver superior performance” mantra, because that is the justification for their excessively high and performance killing fees. Since market realities make it virtually impossible for actively managed funds to consistently beat the market after their fees, they have to resort to promises, deceptions, and what Darrel Huff would call “statistical” lies.*
* (Darrell Huff wrote a short and very informative book, “How to Lie with Statistics,” which was first published in 1954 and was amusingly illustrated by Irving Geis. This book is still in print and remains very popular on Amazon. It plainly and humorously discusses how statistics can be distorted and misused to serve the self-interest of the presenter.)
These lies include: #1 selecting only winners to promote, #2 easy index benchmarking, and #3 hard to interpret cumulative historical performance charts. Those in the industry who do not understand this have not bothered to do their homework. And, why should they? If these superior performance hustlers learned what is good for individual investors, they might also realize that they should find another career that adds some genuine value to our society.
How one fund family solves this problem — They refuse to play the game.
In the May/June 2007 issue of the Journal of Indexes, there was a “Straight Talk” interview with John Brennan, CEO of the Vanguard Group, who succeeded John Bogle in 1996. (Pages 24-25, 50) When asked about performance chasing, Brennan said the following: “The way(s) you mitigate against it are several. One, you never — in our view — never promote performance. You just never run a performance ad. I think that is endemic to our business, and I think it’s a shame for our industry. When you read a performance ad, there is an assumption that the strong performance will continue. And that is not necessarily true. The second thing is … when you call Vanguard to talk about our funds, or when you read our literature, you won’t find a Morningstar Star Rating. … At the end of the day, firms that promote performance do so at their own peril.” (And, The Skilled Investor would add — at the peril of their clients, that is, you!)
(Note that there is no business relationship between The Skilled Investor website and the Vanguard Group or the Journal of Indexes. I have not received any kind of compensation for this article whatsoever.)
Larry Russell is the Editor and Publisher of The Skilled Investor website and The Skilled Investor’s Financial Planning Blog.With objective and scientific financial information, I help you to make better decisions.
Article Directory: Article Dashboard
by John Hurst
All of us are hip, on-line and Internet-savvy. But we don’t know the beast.
This is the core message of Bill Ganz, the president and CEO of next-step search engine ROCKETInfo Inc. (OTC:RKTI). It is a search technology company in the spirit of Google and Yahoo!, but with a new approach to the delivery of results, news and business information.
The growth potential for ROCKETInfo is remarkable: Just the business process management (BPM) aspect of this industry, including software, services and maintenance, will grow to $6.3 billion annually by 2011, according to a report by Forrester Research, an independent technology and market research company. Analysts project a growth rate for the BPM sector of up to 35 percent annually.
ROCKETInfo does two things very well for businesses of all kinds: It is provides search engine services and is a content server that delivers targeted and relevant content such as news and financial information. The software has been designed to automate the process of defining, collecting, analyzing and delivering relevant, current news from an international pool of reputable news, media and other sources.
It is essentially publishing monolith of potentially gargantuan proportions.
Ganz’ homily: “The nexus of the dot.com era afforded a lot of ideas that were funded and what’s happening right now is that these ideas have worked. Things are now better, faster and cheaper if you understand your media and technology.”
Ganz said that exploring ROCKETInfo’s services is much like waking up in a new world. Internet users who have become used to searching for information with providers like Google and Yahoo, he said, get millions of results per search, much of them segregated into paid-for categories. The problem is, most of this information is neither wanted nor needed. ROCKETInfo’s proprietary software filters the junk, the ads, the spam, and delivers only the desired content.
He added that, like Google and other popular search engines, ROCKETInfo provides an advanced Boolean search, but with a higher IQ — the search engine can be trained to discern the quality of information it gathers. Ganz said that for businesses, this means profound changes for gathering information on competitors, and especially in media monitoring.
“In today’s economy, the gold standard of currency is intelligent, dynamic and real-time information and knowledge management,” Ganz said. “The truth is, people are looking for information that is relevant — for us, about us.”
In one of its most popular applications, Ganz said, ROCKETInfo delivers RSS news to the desktop, and especially to the investment industry. His system parses out information where it’s wanted, from a growing database of 80,000 sources, including 16,000 publishers, plus 30,000 blogs and podcasts.
“Simply put,” he stated, “we’re similar to what TiVo (which finds and digitally records select television broadcasts on demand) does for television, except we do it for the Internet.”
“A ROCKETInfo search,” he said, “specializes in news that is happening right now. We don’t store news like Google, Yahoo, MSN, Alta Vista, Ask — those other large search companies — because we believe that news happens, that decisions you make now in your business and personal life today, are your future.
“It’s the speed, immediacy and the breadth of information that we deliver to our clients. We provide this learned data to you, metaphorically, in a box with a bow on it. We deliver it to your desktop, website, e-mails or newsletters — this is synthesized, refined data.”
The reason ROCKETInfo is so fast is because of how it decides to refine the information and how fast it decides to refresh it. Its web services are an integrated collection of technology layers based on the proprietary Rocket Enterprise Server platform. The technology stack is comprised of collection, storage, search, analysis and delivery layers.
“We choose to refresh so quickly and search our databases so frequently because the speed of the information matters so much in the sporting world, the investment world and the business world. Speed matters. The time latency is the liability.”
Ganz describes ROCKETInfo’s search capabilities with a drilling metaphor: “Google offers a two-mile-wide search that is three inches deep. ROCKETInfo,” he said, “offers a three-inch hole that goes two miles deep.”
Founded in 1998, ROCKETInfo, Inc. has its headquarters in Newport Beach, Calif., with research and development operations in Vancouver and Toronto and professional services in Ottawa. It claims over 95,000 registered users and RSS Reader / desktop downloads and more than seven million monthly searches. It has a staff of 17, plus many consultants and contractors.
Currently trading at 24 cents, ROCKETInfo has reported a market cap of $12.46 million, which demonstrates incredible upside potential for the ground floor investor.
ROCKETInfo has 41.21 million shares outstanding.
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
Article Directory: Article Dashboard
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