The Forces Of Nature And Mankind Have Created Worldwide Havoc This Spring
Canadian Stock Exchanges By E. A. SCHILLER
From terrorists to tsunamis our world seems to be regularly challenged and now dissident citizens of Egypt, Libya and neighbouring middle-east countries are up in arms demanding political change. The stock market was not visibly affected except for a spiking of oil prices and price reductions in uranium. Precious metals moved upwards modestly and base metals remained at about the same price levels. This is a terrible thing to say but how do we take advantage of these unfortunate events. Wars utilize bullets and bombs but ammunition stocks are tough to find. Earthquakes and tsunamis destroy buildings and homes and to reconstruct them you need sticks and stones, and with Japan lots of two by fours and ply wood will be needed to build new facilities. And who is best position to provide the timber and finished wood products to do the job but British Columbia companies who cut the trees and create lumber.
Forestry and wood product companies that reacted favourably after the March 15 earthquake include Canfor Pulp Products Inc (CFX-TSX) that rose from $16.70 to 18.30 and Canfor Corp (CFP-TSX) that gained from $13.90 to $15.35 in early April. For dividend conscious investors CFX pays a whopping 16.67% or $3.00 per year dividend. Two others, West Fraser Timber Co. Ltd. (WFT-TSX) and Western Forest Products Inc. (WEF-TSX) moved ahead from $52.40 to $59.50 and 95 cents to $1.20 respectively. US giant Weyerhaeuser (WY-NYSE) traded sideways around $25.00 plus change up from lower levels in previous weeks.
Uranium stocks got slapped around with Cameco Corportation (CCO-TSX) dropping from $32.00 to $29.60 in early April. Successful Saskatchewan uranium explorers Hathor Exploration Ltd. (HAT-TSX that moved onto the big board in Toronto) and Terra Ventures Ltd (TAS-TSX-V), likewise slid slightly down wards around $1.80 and 32 cents respectively.
The Prospectors and Developers Association meeting in Toronto in early March was another successful venue that brought 17,500 attendees to view some 450 corporate and contractor booths. Like always the show was over whelming and too much to take in and appreciate. Commodities that stood out were potash, now being explored in exotic place like Ethiopia and lithium and rare earths, now the flavor of the month for many new companies.
The situation I like is the Canadian Zinc Corporation (CZN-TSX-V and CZICF-OTCBB) zinc, lead and silver Prairie Creek project being explorer within the watershed of the South Nahanni River, in the Mackenzie Mountains of the Northwest Territories, west of Fort Simpson on the Mackenzie River. The deposit has been explorer since the 1960’s by several groups including the Hunt brothers of silver fame. Measured and indicated resources are 5,840329 tonnes grading 10.71 Zn, 9.90% Pb, 161.12 g/t Ag and 0.326% Cu. In addition, there are inferred resources of 5,541,576 tonnes grading 13.53 Zn, 11.43% Pb, 251 g/t Ag and 0.514% copper with exploration potential for additional mineralization. Although located in a sensitive environmental setting the company is confident it can mine this deposit without any harm to the nearby Nahanni National Park Reserve. The stock trades around $1.20.
Previously I mentioned iron ore (pre tsunami) and the way the market is responding to explorers and miners of iron ore. The commodity continues to be a hot metal and one dividend beauty Labrador Iron Ore Royalty Corp. (LIF-TSX) saw the stock move from around $70.00 in mid-January to $80.40 in early April and an all time high. The stock pays a respectable dividend of 2.5% annually. Alderon Resources Corp (ADV-TSX-V) one of the most aggressive Labrador-Quebec iron ore explorers has remained firm at around $3.30 (traded in the $1.00-1.50 range in summer 2010).
If you want to see the most impressive view of the Japanese tsunami go to here. If you copy this coding correctly you will see what the magnitude of the tsunami was and how it took building, cars and people and everything you can imagine and swept it to destruction. I refer you to companies that make building products, i.e. forestry companies and note how they have strengthened in anticipation for demand for their products. Anybody thinking of seaside residences subject to potential tsunamis should look to mountain sites along way from the ocean.