Is There Joy Out There, Some But Not Much
Canadian Stock Exchanges - E. A. Schiller
With Libyan war issues now relegated to the back pages of our newspapers (and no longer CNN’s feature story) but western nations still determined to defeat Gadhafi with all of the available high tech fire power, North America is now the top story faced with record breaking floods in Manitoba, near Winnipeg, along the Richelieu River, in Quebec, south of Montreal, and the mighty Mississippi over flowing its banks inundating communities along its course and horrific tornadoes in Missouri. In northern Alberta, fires devastated the town of Slave Lake, on the shores of Lesser Slave Lake. It seems calamities appear in various forms challenging mans ingenuity to survive. The stock market this spring has been sort of an uncertain entity with precious metals rising and falling with unpredictable prices although in late May they were heading for higher levels. According to the Wall Street Journal Chinese investors are snapping up gold bars and coins like they are going out of style over taking Indian buyers. China now accounts for 25% of gold investment demand, compared with India’s 23%. If you live in China and you want to buy a Porsche Cayenne, there is a two year waiting list. What does that tell you about the Chinese economy?
Trying to predict a winning commodity that translates into selecting winning stocks is no easy task. Uranium for one has provided investors with all kinds of uncertainties, due to the events in Japan and how secure nuclear power is going to evolve. However no matter how bad the Fukushima break down has turned out to be, this planet needs energy and nuclear power will be one source we cannot live without. Currently there are 439 nuclear reactors in operation worldwide and it estimated that there will be 793 reactors in operation by 2030 (that is only 19 years from now). These 793 reactors will require 92,000 tonnes of uranium to fuel them. In mid- May uranium prices rose to $57.70 up from $56.50 the previous week and up from $55.25 in April after the Fukushima accident. One stock that emerged from the fall out was Hathor Exploration (HAT-TSX) and the news that its Roughrider East Zone is estimated to contain 30.13 million pounds of uranium based a mineral resource of 118,000 inferred tonnes grading 11.59% U308. This in combination with the main Roughrider zone brings the total resource base of the project to 555,800 tonnes grading 4.7% U308 or a very significant 57.9 million pounds of contained uranium. Yet to be quantified are potential resources of lower grade uranium peripheral to the East Zone. A new unexplored Far East Zone has the potential to add to additional resources which could increase total uranium resources to higher levels. Company take over overtones are now circulating and the stock has responded favourably to the $2.65 – 2.70, level up from around 2.00 last month. With 50 plus million pounds of uranium in their back pocket anybody looking for an entry point into the uranium business could be a potential suitor. Ten percent partner Terra Ventures Inc (TAS-TSX-V) and a forthcoming June take-over candidate by Hathor moved up to 53-54 cents from around 30 cents in March.
Up in northern Manitoba VMX Ventures (VMS-TSX-V) released some impressed new drill results from its Super Zone adjacent to their Reed deposit currently all under option to HudBay Minerals (HBM-TSX & HBM-NYSE). Hole RLE006 intersected 7.44% copper over 7.18 metres ( 133.89 – 141.07) and a second zone yielded 0.79% and 0.39% zinc over 44.49 metres (214.00 – 258.49). This discovery signifies the potential of a new camp emerging with partner HudBay. HudBay is the offspring of the former Hudson Bay Mining and Smelting, that mined the famous Flin Flon copper-zinc deposits. Discovered in 1915 by Tom Creighton at Flin Flon it was put into production in 1920 and became one of the famous mining centers of Canada. VMS stock trades around 63 cents, up from the mid-fifties in April.
One stock that has remained consistently in favour is Gold Canyon Resources (GCU-TSX-V) thanks to their Springpole gold project in western Ontario, 110 kms northeast of Red Lake. The Company continues to report long drill hole gold and silver intersections in their Portage Zone. Recent holes have intersected unusually high grade silver values exceeding 10 grams per tonne. Hole SP11-048 intersected 194 metres of 1.11 gms/t Au and 13.79 gms/t Ag (636 feet at 0.032 oz/t Au and .403 oz/t Ag). The Portage Zone and the adjoining East Extension, Camp and Main zones consist of high-grade veins and pods hosted in diatreme breccias composed of intrusive and country rock fragments. The known mineralized zones underlie a total area of about four square kilometers representing only about 15% of the greater alkaline intrusive complex which is yet to be comprehensively explored. A recent $10 million financing was completed at $3.65 (1.37 million flow-thru shares) and $3.05 (1.64 non-flow million shares). GCU stock trades around $3.25 up from $2.00 – 2.50 in late 2010 and early 2011.
For those of you who follow NHL hockey, the Vancouver Canucks overtimed the Sharks of San Jose 3 to 2 and now will face either the Boston Bruins or the Tampa Bay Lightning in the Stanley Cup finals.