Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Zooming commodities could crash and burn quickly
(This is what the mainstream media is saying, Kipp)
Gail MarksJarvis
March 9, 2008
One sure way to lose money as an investor is to buy something strictly because it keeps going up.
Technology stocks proved it in 2000. Housing proved it in the years that followed.
Now, analysts are warning investors not to become carried away with commodities. Although gold, oil, metals and agricultural commodities have been breaking records and enriching investors while stocks been losing, many analysts are growing skeptical.
"The price trend in wheat, oil and gold appears to be similar to the ones seen in the late 1990s for the Nasdaq, and in the mid-2000s for home builders," Citigroup strategist Tobias Levkovich said last week.
If investors were to see the prices of many commodities charted on a graph, they would see a line that shoots almost straight up over a short time period. That's known as a "parabolic curve," and it usually portends danger for investors -- a sign of overoptimism that entices naive followers to join the herd toward the end of a cycle.
"Be wary of the commodity complex, including materials and its beneficiaries such as capital goods and energy equipment and services," Levkovich said. "You've seen fertilizer and seed companies run up ten- to fifteenfold in just a few years."
Long term looks better
Long term, many analysts say there is reason for commodities to be strong investments. China, India and other developing nations have been tremendous consumers of commodities. And years of expansion undoubtedly lie ahead. In addition, greater prosperity gives millions of people the ability to buy more food.
In the short term, analysts worry about demand slowing as economic problems in the U.S. curtail purchases of products from other countries, curbing their growth.
Under such conditions, there could be a glut of commodities on the market. Analysts worry about lemming investor behavior or too many investors buying commodity stocks and exchange-traded funds now, simply because they appear to be one of the few investments working amid a declining stock market.
Levkovich is warning investors against the broad range of commodities, noting that Europe and Japan are slowing already and that the spillover to other nations may take months to show up.
During the last 12 months, the Standard & Poor's 500 index has declined 7 percent while the S&P 500 Goldman Sachs commodities indexes have shown tremendous surges: energy up 49 percent, industrial metals up 21 percent, precious metals up 48 percent and agriculture up 59 percent.
"The price appreciation of some commodities is supported by strong fundamentals," but others are along for the ride, noted Barclays Capital's commodities research team in a report last week.
Nickel and zinc gained the most among metals recently -- rising 17 percent and 11 percent, respectively, in just seven days ending Tuesday. Yet they have the weakest fundamentals, the analysts said. Without a recovery in the U.S. and Asian stainless steel markets, the analysts see no reason why nickel's price should be soaring.
Demand leads drive
Typically, commodity prices rise and fall based largely on supply and demand.
Corn prices, for example, have hit all-time highs amid strong demand from China as well as ethanol output in the U.S. Also, as farmers convert cotton fields to grain production to capture high grain prices, the changes ultimately could leave a shortage of cotton and generate higher prices there. Already, cotton prices are at multiyear highs, along with cocoa, coffee, silver, palladium and aluminum, Barclays said.
With gold hitting an all-time high, not adjusted for inflation, other factors beyond supply and demand are toying with the price. Gold tends to climb amid economic and geopolitical worries, growing inflation and a falling dollar -- factors currently at play.
Still, as gold nears $1,000 an ounce, investors chasing the rising price could be in for a shock. "Gold is up about 18 percent in two months, and last year it was up 37 percent, while the Standard & Poor's 500 only gained 3 percent," said Leo Larkin, S&P metals and mining analyst. "That's a huge run-up and it's probably not sustainable."
Goldman Sachs analyst Oscar Cabrera expects gold to average $910 an ounce during the year and end 2008 at $850. For 2009, he's anticipating $870 at year-end, and for 2010, $940.
Meanwhile, Jon Najarian, co-founder of OptionMonster, said it's dangerous to buy now because speculators are on the long side, rather than short side, of the trade. "When too many are on the same side, it leads to a correction that gets overdone," he said. Also, when investors are focused on meeting a threshold like $1,000 an ounce for gold, a sell-off of up to 15 percent is likely once the goal is achieved.
Zooming commodities could crash and burn quickly
(This is what the mainstream media is saying, Kipp)
Gail MarksJarvis
March 9, 2008
One sure way to lose money as an investor is to buy something strictly because it keeps going up.
Technology stocks proved it in 2000. Housing proved it in the years that followed.
Now, analysts are warning investors not to become carried away with commodities. Although gold, oil, metals and agricultural commodities have been breaking records and enriching investors while stocks been losing, many analysts are growing skeptical.
"The price trend in wheat, oil and gold appears to be similar to the ones seen in the late 1990s for the Nasdaq, and in the mid-2000s for home builders," Citigroup strategist Tobias Levkovich said last week.
If investors were to see the prices of many commodities charted on a graph, they would see a line that shoots almost straight up over a short time period. That's known as a "parabolic curve," and it usually portends danger for investors -- a sign of overoptimism that entices naive followers to join the herd toward the end of a cycle.
"Be wary of the commodity complex, including materials and its beneficiaries such as capital goods and energy equipment and services," Levkovich said. "You've seen fertilizer and seed companies run up ten- to fifteenfold in just a few years."
Long term looks better
Long term, many analysts say there is reason for commodities to be strong investments. China, India and other developing nations have been tremendous consumers of commodities. And years of expansion undoubtedly lie ahead. In addition, greater prosperity gives millions of people the ability to buy more food.
In the short term, analysts worry about demand slowing as economic problems in the U.S. curtail purchases of products from other countries, curbing their growth.
Under such conditions, there could be a glut of commodities on the market. Analysts worry about lemming investor behavior or too many investors buying commodity stocks and exchange-traded funds now, simply because they appear to be one of the few investments working amid a declining stock market.
Levkovich is warning investors against the broad range of commodities, noting that Europe and Japan are slowing already and that the spillover to other nations may take months to show up.
During the last 12 months, the Standard & Poor's 500 index has declined 7 percent while the S&P 500 Goldman Sachs commodities indexes have shown tremendous surges: energy up 49 percent, industrial metals up 21 percent, precious metals up 48 percent and agriculture up 59 percent.
"The price appreciation of some commodities is supported by strong fundamentals," but others are along for the ride, noted Barclays Capital's commodities research team in a report last week.
Nickel and zinc gained the most among metals recently -- rising 17 percent and 11 percent, respectively, in just seven days ending Tuesday. Yet they have the weakest fundamentals, the analysts said. Without a recovery in the U.S. and Asian stainless steel markets, the analysts see no reason why nickel's price should be soaring.
Demand leads drive
Typically, commodity prices rise and fall based largely on supply and demand.
Corn prices, for example, have hit all-time highs amid strong demand from China as well as ethanol output in the U.S. Also, as farmers convert cotton fields to grain production to capture high grain prices, the changes ultimately could leave a shortage of cotton and generate higher prices there. Already, cotton prices are at multiyear highs, along with cocoa, coffee, silver, palladium and aluminum, Barclays said.
With gold hitting an all-time high, not adjusted for inflation, other factors beyond supply and demand are toying with the price. Gold tends to climb amid economic and geopolitical worries, growing inflation and a falling dollar -- factors currently at play.
Still, as gold nears $1,000 an ounce, investors chasing the rising price could be in for a shock. "Gold is up about 18 percent in two months, and last year it was up 37 percent, while the Standard & Poor's 500 only gained 3 percent," said Leo Larkin, S&P metals and mining analyst. "That's a huge run-up and it's probably not sustainable."
Goldman Sachs analyst Oscar Cabrera expects gold to average $910 an ounce during the year and end 2008 at $850. For 2009, he's anticipating $870 at year-end, and for 2010, $940.
Meanwhile, Jon Najarian, co-founder of OptionMonster, said it's dangerous to buy now because speculators are on the long side, rather than short side, of the trade. "When too many are on the same side, it leads to a correction that gets overdone," he said. Also, when investors are focused on meeting a threshold like $1,000 an ounce for gold, a sell-off of up to 15 percent is likely once the goal is achieved.
A Global Need for Grain That Farms Can’t Fill
Dan Koeck for The New York Times
On his North Dakota farm, Dennis Miller has seen wheat prices steadily climb.
LAWTON, N.D. — Whatever Dennis Miller decides to plant this year on his 2,760-acre farm, the world needs. Wheat prices have doubled in the last six months. Corn is on a tear. Barley, sunflower seeds, canola and soybeans are all up sharply.
“For once, there’s great reason to be optimistic,” Mr. Miller said.
But the prices that have renewed Mr. Miller’s faith in farming are causing pain far and wide. A tailor in Lagos, Nigeria, named Abel Ojuku said recently that he had been forced to cut back on the bread he and his family love.
“If you wanted to buy three loaves, now you buy one,” Mr. Ojuku said.
Everywhere, the cost of food is rising sharply. Whether the world is in for a long period of continued increases has become one of the most urgent issues in economics.
Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards.
The high growth rate means hundreds of millions of people are, for the first time, getting access to the basics of life, including a better diet. That jump in demand is helping to drive up the prices of agricultural commodities.
Farmers the world over are producing flat-out. American agricultural exports are expected to increase 23 percent this year to $101 billion, a record. The world’s grain stockpiles have fallen to the lowest levels in decades.
“Everyone wants to eat like an American on this globe,” said Daniel W. Basse of the AgResource Company, a Chicago consultancy. “But if they do, we’re going to need another two or three globes to grow it all.”
In contrast to a run-up in the 1990s, investors this time are betting — as they buy and sell contracts for future delivery of food commodities — that scarcity and high prices will last for years.
If that comes to pass, it is likely to present big problems in managing the American economy. Rising food prices in the United States are already helping to fuel inflation reminiscent of the 1970s.
And the increases could become an even bigger problem overseas. The increases that have already occurred are depriving poor people of food, setting off social unrest and even spurring riots in some countries.
In the long run, the food supply could grow. More land may be pulled into production, and outdated farming methods in some countries may be upgraded. Moreover, rising prices could force more people to cut back. The big question is whether such changes will be enough to bring supply and demand into better balance.
“People are trying to figure out, is this a new era?” said Joseph Glauber, chief economist for the United States Department of Agriculture. “Are prices going to be high forever?”
Competition for Acres
At a moment when much of the country is contemplating recession, farmers are flourishing. The Agriculture Department forecasts that farm income this year will be 50 percent greater than the average of the last 10 years. The flood of money into American agriculture is leading to rising land values and a renewed sense of optimism in rural America.
“All of a sudden farmers are more in control, which is a weird position for them,” said Brian Sorenson of the Northern Crops Institute in Fargo, N.D. “Everyone’s knocking at their door, saying, ‘Grow this, grow that.’ ”
Mr. Miller’s family has worked the Great Plains for more than a century. One afternoon early last month, he turned on the computer in his combination office and laundry room to see what commodity prices were up to.
“Oh, my goodness, look at that,” Mr. Miller said. Barley was $6.40 a bushel, approaching a price that would tempt him to plant more. Soybeans were $12.79 a bushel, up from $8.50 in August.
The frozen earth outside was only a few weeks from coming to life, but Mr. Miller was happily uncertain about what to plant. Last year, the decision was easy for Mr. Miller and everyone else: prices of corn were high because of new government mandates for production of ethanol, a motor fuel. This year, so many crops look like good bets, and there is so little land on which to plant them.
“I’m debating between spring wheat, durum wheat, canola, malting barley, confection sunflowers, oil sunflowers, soybeans, flax and corn,” Mr. Miller said.
The biggest blemish on this winter of joy is that farmers’ own costs are rising rapidly. Expenses for the diesel fuel used to run tractors and combines and for the fertilizer essential to modern agriculture have soared. Mr. Miller does not just want high prices; he needs them to pay his bills.
Until recently, he could expect around $3 a bushel for his wheat — far less than his parents and grandparents received, when inflation is taken into account. Consumption in the United States was dropping as Americans shunned carbohydrates. The export market, while healthy, faced competition.
Now prices have more than tripled, partly because of a drought in Australia and bad harvests elsewhere and also because of unslaked global demand for crackers, bread and noodles. In seven of the last eight years, world wheat consumption has outpaced production. Stockpiles are at their lowest point in decades.
Around the world, wheat is becoming a precious commodity. In Pakistan, thousands of paramilitary troops have been deployed since January to guard trucks carrying wheat and flour. Malaysia, trying to keep its commodities at home, has made it a crime to export flour and other products without a license. Consumer groups in Italy staged a widely publicized (if also widely disregarded) one-day pasta strike last fall.
In the United States, the price of dry pasta has risen 20 percent since October, according to government data. Flour is up 19 percent since last summer. Over all, food and beverage prices are rising 4 percent a year, the fastest pace in nearly two decades.
The American Bakers Association last month took the radical step of suggesting that American exports be curtailed to keep wheat at home, though the group later backed off.
If all this suggests a golden age for American growers, it could well be brief, said Bruce Babcock, an economist at Iowa State University. He predicted that farmers would do their best to ramp up production, possibly to the point of pulling land out of conservation programs so they could plant more. “Give farmers a price incentive, and they’ll produce,” he said.
The Agriculture Department forecasts that world wheat production will increase 8 percent this year. In the United States, spring and durum wheat plantings are expected to rise by two million acres, helping to drive prices down to $7 a bushel, the government said.
Yet the competition among crops for acreage has become so intense that some farmers think the government and analysts like Mr. Babcock are being overly optimistic.
Read Smith, a farmer in St. John, Wash., thinks a new era is at hand for all sorts of crops. “Price spikes have usually been short-lived,” he said. “I think this one is different.”
His example is plain old mustard. Two years ago, Mr. Smith would have been paid less than 15 cents a pound for mustard seeds. As more lucrative crops began supplanting mustard, dealers raised their offering price to 20 cents, then 30 cents, then 48 cents early this year. Mr. Smith gave in, agreeing to convert up to 100 acres of wheat fields to mustard.
Mr. Smith said it was inevitable that supermarket mustard, just like flour, bread and pasta, would become more expensive.
“We’ve lulled the public with cheap food,” he said. “It’s not going to be a steal anymore.”
Bread to Be Had, for a Price
As the newly urbanized and newly affluent seek more protein and more calories, a phenomenon called “diet globalization” is playing out around the world. Demand is growing for pork in Russia, beef in Indonesia and dairy products in Mexico. Rice is giving way to noodles, home-cooked food to fast food.
Though wracked with upheaval for years and with many millions still rooted in poverty, Nigeria has a growing middle class. Median income per person doubled in the first half of this decade, to $560 in 2005. Much of this increase is being spent on food.
Nigeria grows little wheat, but its people have developed a taste for bread, in part because of marketing by American exporters. Between 1995 and 2005, per capita wheat consumption in Nigeria more than tripled, to 44 pounds a year. Bread has been displacing traditional foods like eba, dumplings made from cassava root.
Nigeria’s wheat imports in 2007 were forecast to rise 10 percent more. But demand was also rising in many other places, from Tunisia to Venezuela to India. At the same time, drought and competition from other crops limited supply.
So wheat prices soared, and over the last year, bread prices in Nigeria have jumped about 50 percent.
Amid a public outcry, bakers started making smaller loaves, hoping customers who could not afford to pay more would pay about the same to eat less. Sales have dropped for street hawkers selling loaves. With imports shrinking, mills are running at half capacity.
At Honeywell Flour Mills, one of the largest in Nigeria, executives were glued one recent day to commodity screens. The price of wheat ticked ever upward. “Even when you see a little downturn, you wait for some few hours or a day, and before you know it, it’s gone way up again,” said the production director, Nino Albert Ozara.
Despite the crisis, there is little sense of a permanent retreat from wheat in Nigeria. The mills are increasing their capacity, hoping for a day when supply is sufficient to stabilize prices. “The moment you develop a taste, you are hooked,” said a confident Muyiwa Talabi, director of an American wheat-marketing office in Lagos.
Mr. Ojuku, the man who buys fewer loaves, and one of his fellow tailors in Lagos, Mukala Sule, 39, are trying to adjust to the new era.
“I must eat bread and tea in the morning. Otherwise, I can’t be happy,” Mr. Sule said as he sat on a bench at a roadside cafe a few weeks ago. For a breakfast that includes a small loaf, he pays about $1 a day, twice what the traditional eba would have cost him.
To save a few pennies, he decided to skip butter. The bread was the important thing.
“Even if the price goes up,” Mr. Sule said, “if I have the money, I’ll still buy it.”
Commodities "Bubble"???
I think we have a long way to go before the commodities "bubble" has any chance of bursting as this author suggests:
Mother of all bubbles prepares to burst
Food report: Analysis by Iain MacWhirter
WHAT HAS the food crisis got to do with Northern Rock? Quite a lot, actually. The rocketing price of wheat, soya beans, sugar, coffee etc is all part of the credit crisis which has caused panic in financial markets and encouraged investors to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "stores of value". Put another way, the Western banks are exporting their debts to the third world.
The phenomenal increases in food prices are only in part a consequence of climate change and population. Most of the recent rises have been the result of speculation and the collapse in the value of the dollar. This is being tacitly encouraged by the central banks, such as the US Federal Reserve, who are trying to ignite another asset bubble to replace the real estate and dotcom bubbles which have burst in spectacular fashion. It's the third bubble and it's hitting the third world hard.
Desperate for quick returns, trillions of dollars are being taken out of private equity and financial derivatives and ploughed into food and raw materials. The financial websites call it the "commodities super-cycle". It ranges from precious metals at one end, to corn, cocoa and cattle at the other - speculators are even placing their bets on water prices.
The collapse in the price of the dollar means that most international commodities are more expensive for poor people. The dollar's decline is a result of the low interest rate policy of the Federal Reserve. When rates are set below the rate of inflation, investors have to keep moving their massive funds from sector to sector in search of higher returns.
They piled into the internet stocks in the 1990s as the boom in dotcoms got under way. Then they shifted into real estate and complex financial derivatives such as collateralised debt obligations based on sub-prime US mortgages. Now, with the collapse of the property bubble across the world, investors are on the move again, and the only place left is commodities.
Of course, long-term factors such as the depletion of oil, population and the changing eating habits of Southeast Asia are putting long-term pressure on agricultural resources. But the Fed has thrown fuel on the fire by dramatically cutting interest rates, even as inflation grows, in a desperate race to revive the American economy on the back of a commodities boom. The people who suffer most will be on the other side of the world.
Will it work? In the short term, possibly. But the US may be cutting its own throat. Once speculative prices get out of control, there is no knowing when they will stop. Oil is over $100 a barrel, which is causing gas prices and fertilisers to rocket in the US.
They depend on these as much as sub-Saharan Africa. This might be the bubble to end all bubbles.
Look at the three cycles illustrated in this link:
http://www.financialsense.com/fsu/editorials/willie/2008/0307.html
My question to all of you is:
What is going to break these cycles?????
Kipp
How is this going to happen?
From my previous post:
"The World Bank predicts global demand for food will double by 2030. This is partly because the world's population is expected to grow by three billion by 2050......"
I can't see how our resources can support a 50% increase in global population if we are on the brink today???
Kipp
2008: The year of global food crisis
IT IS the new face of hunger. A perfect storm of food scarcity, global warming, rocketing oil prices and the world population explosion is plunging humanity into the biggest crisis of the 21st century by pushing up food prices and spreading hunger and poverty from rural areas into cities.
Millions more of the world's most vulnerable people are facing starvation as food shortages loom and crop prices spiral ever upwards.
And for the first time in history, say experts, the impact is spreading from the developing to the developed world.
More than 73 million people in 78 countries that depend on food handouts from the United Nations World Food Programme (WFP) are facing reduced rations this year. The increasing scarcity of food is the biggest crisis looming for the world'', according to WFP officials.
At the same time, the UN Food and Agriculture Organisation has warned that rising prices have triggered a food crisis in 36 countries, all of which will need extra help. The threat of malnutrition is the world's forgotten problem'', says the World Bank as it demands urgent action.
The bank points out that global food prices have risen by 75% since 2000, while wheat prices have increased by 200%. The cost of other staples such as rice and soya bean have also hit record highs, while corn is at its most expensive in 12 years.
The increasing cost of grains is also pushing up the price of meat, poultry, eggs and dairy products. And there is every likelihood prices will continue their relentless rise, according to expert predictions by the UN and developed countries.
High prices have already prompted a string of food protests around the world, with tortilla riots in Mexico, disputes over food rationing in West Bengal and protests over grain prices in Senegal, Mauritania and other parts of Africa. In Yemen, children have marched to highlight their hunger, while in London last week hundreds of pig farmers protested outside Downing Street.
If prices keep rising, more and more people around the globe will be unable to afford the food they need to stay alive, and without help they will become desperate. More food riots will flare up, governments will totter and millions could die.
Food scarcity means a big increase in the number of people going hungry,'' says the WFP's Greg Barrow. Without doubt, we are passing through a difficult period for the world's hungry poor.'' The WFP estimates it needs an additional $500 million to keep feeding the 73 million people in Africa, Asia and central America who require its help. We need extra money by the middle of 2008 so we don't have to reduce rations,'' says Barrow.
He also points out that age-old patterns of famine are changing. "We are feeding communities of people we didn't expect to feed," he explains.
As well as being rural, the profile of the new hungry poor is also urban, which is new. There is food available in the markets and shops - it's just that these people can't afford to buy it. This is the new face of hunger.'' The food shortages will also affect western industrialised nations such as Scotland, Barrow says. Scarcity means that some foods will get very expensive, or disappear from supermarkets altogether, meaning a move to seasonal, indigenous vegetables.'' Of the 36 countries named last month as currently facing a food crisis, 21 are in Africa. Lesotho and Swaziland have been afflicted by droughts, Sierra Leone lacks widespread access to food markets because of low incomes and high prices, and Ghana, Kenya and Chad among others are enduring "severe localised food insecurity".
In India last year, more than 25,000 farmers took their own lives, driven to despair by grain shortages and farming debts. "The spectre of food grain imports stares India in the face as agricultural growth plunges to an all-time low," warns India Today magazine.
The World Bank predicts global demand for food will double by 2030. This is partly because the world's population is expected to grow by three billion by 2050, but that is only one of many interlocking causes.
The rise in global temperatures caused by pollution is also beginning to disrupt food production in many countries. According to the UN, an area of fertile soil the size of Ukraine is lost every year because of drought, deforestation and climate instability.
Last year Australia experienced its worst drought for over a century, and saw its wheat crop shrink by 60%. China's grain harvest has also fallen by 10% over the past seven years.
The UN Intergovernmental Panel on Climate Change has predicted that, over the next 100 years, a one-metre rise in sea levels would flood almost a third of the world's crop-growing land.
A recent analysis by the Conservative Party leader, David Cameron, also pinned blame for the global food crunch'' on the accelerating demand for allegedly green biofuels and the world's growing appetite for meat.
Meat is a very inefficient way of utilising land to produce food, delivering far fewer calories, acre for acre, than grain. But the amount of meat eaten by the average Chinese consumer has increased from 20 kilograms a year in 1985 to over 50 kilograms today. The demand for meat from across all developing countries has doubled since 1980.
The world's grain stocks are at their lowest for 30 years, Cameron warns. "Some analysts are beginning to make some very worrying, very stark predictions. And these analysts say politicians should start to rank the issue of food security alongside energy security and even national security."
Another key driver is the soaring cost of oil, which last week topped $105 a barrel for the first time. As well as increasing transport costs, oil makes crop fertilisers more expensive.
According to the World Bank, fertiliser prices have risen 150% in the past five years. This has had a major impact on food prices, as the cost of fertiliser contributes over a quarter of the overall cost of grain production in the US, which is responsible for 40% of world grain exports.
Tackling hunger has become a "forgotten" UN millennium development goal, says the bank's president, Robert Zoellick.
But increased food prices and their threat - not only to people but also to political stability - have made it a matter of urgency," he says.
Scottish farmers warn that food security is becoming an issue for the first time since the second world war. This is a perfect storm and the effects are being felt right now," says James Withers, the acting chief executive of the National Farmers' Union in Scotland.
"At the same time as demand for food increases, the amount of land we have available to grow food on is reducing," he adds. "An area twice the size of Scotland's entire agricultural area has been swallowed up by Chinese towns and cities in the last 10 years.'' John Scott, a Scottish Conservative MSP who farms in Ayrshire, goes further. "It's almost biblical," he says. "With all the wine lakes and butter mountains, we've had our 20 years of plenty since 1986.'' The prospect of global food shortages is now Malthusian, he suggests. One response from the UK and Scotland should be to grow more of our own food, and to try to reverse the decline in self-sufficiency from 75% in 1986 to 60% now.
It is possible for the UK, and the world, to feed itself, argues Robin Maynard from the Soil Association, but it will require big changes. He invokes the wartime spirit that saw gardens turned into allotments, and 50 mixed farms feeding Britain.
This is a wake-up call,'' he says. The choices we make now will determine whether we can feed ourselves in the future. If we get it right we can have a thriving food economy.'' Richard Lochhead, the Scottish government's environment secretary, has launched a public discussion to develop Scotland's first food policy. "I am conscious our generation has not experienced food shortages, but we should never take food for granted," he says.
"That is why the Scottish government will never allow food security to fall off the national agenda. We recognise the vital role of our primary producers in ensuring the long-term capacity and capability of our food supply."
Why are we growing food to feed cars instead of people?
The global drive for a new green fuel to power cars, lorries and planes is worsening world food shortages and threatening to make billions go hungry. Biofuels, enthusiastically backed by the US, UK and other European governments, have been sold as the solution to global warming. Making fuels from growing crops has been marketed as the way to cut climate pollution while continuing to drive.
But now experts are warning that this could all be a disastrous mistake. Converting large amounts of land to crops for biofuels is reducing food production just when the world needs to increase it.
Last year a quarter of the US maize crop was turned into ethanol to fuel vehicles - and the US supplies more than 60% of the world's maize exports. According to the World Bank, this is putting pressure on countries' precarious food supplies.
"The biofuels surge makes things worse by adding high demand on top of already high prices and low stocks," said one of the bank's leading economists, Don Mitchell. "Ethanol and biodiesel produced in the US and European Union don't appear to be delivering on green promises either, making them very controversial."
There are plans by more than 20 countries to boost production of biofuels over the next decade. The US is talking about trebling maize production for ethanol, while the European Union is aiming to make biofuels 10% of all transport fuels by 2020.
The dash for biofuels came under fire last week from the UK government's newly appointed chief scientific adviser, Professor John Beddington. In a speech in London on Thursday, he said that world food prices had already suffered a "major shock" as a result.
Biofuels were often unsustainable, he argued. "It's very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food."
Some of the proposed biofuels schemes were "hopeless", warned Beddington, formerly professor of applied population biology at Imperial College, London. "The idea that you cut down rainforest to actually grow biofuels seems profoundly stupid."
The Conservative Party leader, David Cameron, has also weighed into the attack on biofuels. "They are not a panacea," he told the National Farmers' Union last month. "Unless they are truly sustainable, they may well harm the environment more than protect it."
Like environmentalists and organic food experts, Cameron latched on to one of the most telling statistics highlighting the competition between food and fuel. "You could feed a person for a whole year from the grain that produces just one tank of fuel for a sports utility vehicle (SUV)," he said.
The same figure was used by Robin Maynard, from the Soil Association, which certifies organic food. "The US currently grows one-sixth of its grain harvest for cars, which is madness," he told the Sunday Herald.
"It is perfectly possible for the world to feed itself, but it depends on how we are growing food. If we continue to grow crops to feed cars rather than people, we're in trouble."
Read This Before Selling Gold/Silver!
http://www.financialsense.com/fsu/editorials/willie/2008/0307.html
Look at the three cycles illustrated in the link?
My question to all of you is:
What is going to break these cycles?????
Kipp
Auction Rate Bond Collapse.
I was not aware of how the interest rate mechanism worked with these bonds. Hospitals, toll roads, old folks homes, WOW! Kipp
http://www.denverpost.com/business/ci_8498557
The auction-rate bond market has collapsed, with Colorado hit hard.
By Aldo Svaldi and Jeffrey Leib
The Denver Post
Article Last Updated: 03/08/2008 03:54:45 PM MST
February was a bad month for Stephanie Doughty, the chief financial officer for Poudre Valley Health System, as interest rates on most of its $215 million in auction-rate bonds climbed steeply, adding as much as $140,000 to weekly interest costs.
On Monday, things are expected to get worse when $50 million of that debt goes to auction to face higher rates.
"It was just unbelievable, to see such a dramatic change in a debt vehicle that has been so sure for 20 years," Doughty said. "We said what can we do to remedy this as quickly as possible."
Poudre Valley, which operates hospitals in northern Colorado, is one of 14 Colorado institutions facing sharply higher interest rates because of the collapse of the auction-rate bond market.
The market's failure — there have been no buyers at hundreds of bond auctions — is fallout from the subprime mortgage crisis and huge losses posted by Wall Street investment banks.
"This is a 25-year-old market, worth $350 billion. Who would have thought," said Kirsten Volpi, chief financial officer at the Colorado School of Mines, which had $43 million in auction-rate bonds.
Denver International Airport, Children's Hospital, the CollegeInvest Student Loan program and the E-470 toll road are among the other institutions slammed by higher interest payments.
In all, $4 billion in bonds in Colorado are at risk and if the issuers do not get out of the failed market, they face paying an extra $103 million a year in interest compared with what they paid last fall, according to a Denver Post estimate.
The auction-rate bond market started failing on a large scale four weeks ago, forcing financial executives to scramble to convert or refund their debt.
The School of Mines already has refunded its auction-rate bonds, and DIA is moving out of about $750 million in similar debt.
"The whole industry is looking to convert out of auction-rate securities," said Leonard Dryer, chief financial officer for Children's Hospital. "No one believes the auction-rate market will settle itself back down."
Children's has $325 million in auction-rate bonds, sold in 2004 and 2006 to build its new campus in Aurora.
These institutions used auction- rate bonds for the same reason homeowners picked 1-year adjustable-rate mortgages instead of 30-year mortgages — short-term interest rates, while they can fluctuate, are usually lower.
"Financing long-term assets with short-term borrowing is at the heart of the problem," said Christopher Johns, manager of the Tax Free Fund of Colorado, which avoided the bonds.
For years, the market worked, saving issuers large amounts of interest as the price of the debt reset at auction every seven, 28 or 35 days.
Buyers came to consider the securities as safe as holding cash.
The Colorado institutions also bought bond default insurance, which gave the debt a triple-A rating.
The Wall Street investment banks, which arranged the marketing of the bonds, served as a buyer of last resort if no other investors bid in the auctions.
From 1984 to 2007, only 44 auctions failed, according to Bloomberg News.
But the subprime mortgage crisis, where high-risk mortgages were packaged and widely sold as securities, rocked even this once-stable market.
Bond insurers, such as MBIA Inc. and Ambac Financial Group, who guaranteed Colorado bonds, also branched into insuring mortgage securities.
As losses on mortgage securities mounted, the credit ratings of bond insurers came under pressure, raising doubts about the protection the insurers could really offer.
Investment banks supporting the auctions also ran into trouble because of their investments in mortgage- backed securities.
The world's largest banks have written off more than $181 billion in bad mortgage-related investments, leaving them less able financially to step in and support the auctions.
"Wall Street is not in a position to take that debt on their balance sheet," said Ken Harris, a co-manager of the Westcore Colorado Tax Exempt Fund.
Auction-rate bonds suddenly lost their luster and liquidity.
In February, thousands of bond auctions, including those of Colorado institutions, failed as no investors or banks bid on the bonds.
Such a "failed auction" triggers payment by the bond issuer of a maximum interest rate — often as high as 12 to 15 percent — to holders of the bonds.
Auction-rate municipal bonds now have higher yields than government treasuries — even though they are tax-exempt. This rarely happens.
"When you see short-term muni rates spike up because of the penalty rates, it carries through the rest of the market," Johns said.
Higher rates have brought out some buyers who see little risk of defaults on the bonds.
"We never participated in the auction-rate markets over the last 20 years," said Westcore's Harris. Now, his fund is loading up on auction-rate bonds.
New buyers helped bring down rates from maximum levels, but issuers aren't expecting interest rates to return to where they were last fall.
One of the hardest-hit issuers in Colorado is the E-470 toll road, which in June converted $422.1 million of fixed-rate debt to auction-rate bonds.
Interest rates on those bonds soared from an October low of 3.5 percent to a February high of 11.95 percent.
On Thursday, E-470 experienced its first failed auction, and the interest rate hit the 12 percent maximum.
The soaring rates mean the toll highway authority faces a $24.43 million increase in annual interest costs if it stays in the auction-rate market. It is looking at ways to exit the market.
"We never expected the market would go completely dysfunctional," said John McCuskey, E-470's finance chief.
E-470, he said, has reserves and a "rainy day" account to cover the short-term impact of sharply higher interest rates.
In Colorado Springs, Memorial Health System saw two failed bond auctions in mid-February drive rates from the 3 percent range to the maximum rate of 12 percent.
Memorial Health, which operates city hospitals, sold about $272 million in auction-rate bonds in 2002 and 2004 for hospital expansion.
More recently, the hospital's bond interest rates dropped to between 9 and 6.5 percent as some investors came back into the market.
Still, chief financial officer Gary Flansburg said, if the interest rate stays at 6.5 percent, Memorial Health will pay an extra $800,000 a month on its debt. At 10 percent, the extra monthly tab would be $1.6 million.
"We're working as diligently as we can to transfer these bonds to a different mode," he said.
Student aid provider CollegeInvest is Colorado's largest issuer, with $980.4 million of its $1.6 billion debt in auction-rate bonds.
The student-loan lender is paying $1.8 million more in interest each month than it did last summer, said spokeswoman Jennifer Robinson.
If sustained, those higher interest rates could ripple through to higher costs on some types of adjustable-rate student loans, something the student aid provider is trying to avoid, Robinson said.
Meanwhile, Poudre Valley Health System — which operates Poudre Valley Hospital in Fort Collins and the Medical Center of the Rockies in Loveland — awaits Monday's bond auction.
It issued $215 million in bonds in 2005 primarily to build the Loveland facility.
The bonds are rebid every 35 days and until recently were paying at auction an average of about 3.37 percent interest, said Poudre Valley's Doughty.
Then, on Feb. 19, with auctions failing all over the country, investors bid up the price on $82 million of the Poudre debt to 10.55 percent, suddenly loading the hospital system with an extra $140,000 in weekly interest.
The system so far has paid the the extra interest costs out of cash reserves and has not reduced staff or otherwise cut operations, Doughty said.
The hospital system, however, will restructure the debt. Going to fixed-rate bonds will probably add about $2 million in annual interest payments compared with $7 million if it stays with auction-rate bonds.
"Instead of paying investors the extra money," Doughty said, "we would rather have that cash available for capital equipment and other hospital needs."
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
$USD - Lower highs and lower lows.
Here is the chart:
http://stockcharts.com/charts/gallery.html?$USD
I see nothing long term that will help our dollar. Piling on more debt, bailouts, handouts, increasing unemployment, financial crisis.......................................
Listen to Jim Puplava's 3rd hour:
I listened to the radio program this morning and the 3rd hour gave me a lot to think about. The dollar is going down, gold/silver, energy, commodities up, financials and consumer discretionary down.
http://www.financialsense.com/index.html
Joke of the week!
Paulson says dollar to reflect strong fundamentals
Friday March 7, 11:07 pm ET
STANFORD, California (Reuters) - Treasury Secretary Henry Paulson on Friday reiterated his view that a strong dollar was in the U.S. interest and the greenback's value would ultimately reflect strong economic fundamentals.
"The strong dollar is in the nation's interest. Our economy like any other has got its ups and downs," Paulson told an economic policy conference at Stanford University. "The long term fundamentals are strong. And I'm confident they'll be reflected in currency market."
The dollar has declined in value as the U.S. economy has weakened under the strain of a housing crisis and financial market turmoil. Federal Reserve interest rate cuts have also reduced the dollar's value against major currencies including the euro and Britain's pound.
Thanks Monty - FR.TO and GPR.TO were added to my holdings yesterday. SST, EXN and AUN are doing better these days. I sure have a lot of silver all of the sudden!
All of these bail out plans means the dollar is doomed. Canadian listed energy, silver/gold, fertilizer are now 90+% of my holdings.
Good Luck!
Kipp
MontyHigh - FR.TO
Monty,
Can you take a minute to update us on FR.TO. I remember it wqas a big holding for you. Here is news from today:
http://biz.yahoo.com/iw/080305/0370910.html
Thanks!
Kipp
Excellon More Than Doubles Platosa Mineral Resource to 417,000 Tonnes of High-Grade
Monday March 3, 8:02 am ET
TORONTO, ONTARIO--(Marketwire - March 3, 2008) - Excellon Resources Inc. (TSX:EXN - News) has increased its indicated mineral resource to 417,000 tonnes at its 100%-owned Platosa test-mine, located near Bermejillo, in northeastern Durango State, Mexico.
The updated Mineral Resource estimate indicates a 126% increase in the Indicated Mineral Resource category to a total of 417,000 tonnes grading 1,060 g/t silver (31 oz/T), 9.31% lead, and 9.79% zinc, up from 184,500 tonnes grading 1,546 g/t silver, 10.86% lead, and 10.50% zinc (at May 9, 2006). The Inferred Mineral Resource has also increased nine-fold from 8,200 to 73,000 tonnes at a slightly higher grade than that of 2006. Tonnages and grades are summarized below. The results meet Company expectations and Platosa remains one of the highest grade producing silver, lead, and zinc deposits in Mexico.
Since the cut-off date for the new estimate, the drill holes announced in press release No. 5 - 2008 (February 21, 2008) have shown that the Guadalupe and Rodilla mantos are connected. In addition, new massive sulphide mineralization with an estimated true thickness of 4.7 metres has been encountered in the NE-1 area approximately 100 metres east of Rodilla. Assay results from these holes are pending and drilling is ongoing to trace the extent of both these mantos.
"Our new 43-101-compliant Mineral Resource estimate confirms that our aggressive drilling program in the immediate test-mine area, as well as the underground mine development, has allowed us to add to our resource on a continual basis, even as we have shipped over 78,000 tonnes of ore since our 2006 resource estimate. The Indicated and Inferred Mineral Resource disclosed today is sufficient to sustain the Platosa test-mine operation for eight years on the present basis of selling ore directly to Penoles or four years should the Company decide to build an on-site 350 tonne per day flotation mill. A final mill construction decision is expected in the near future," said Richard W. Brissenden, Excellon's CEO and president. "Looking to the future, we are also delighted with the discovery of new massive sulphides at NE-1 and the linking of the Guadalupe and Rodilla mantos. Neither of these recent results is incorporated into the updated resource estimate and we look forward to adding to our resource base in these and other areas as we continue to drill."
Platosa Project - Summary of February 3, 2008 Mineral Resource Estimate
-------------------------------------------------------------
Category Tonnes (t) Silver (g/t) Lead (%) Zinc (%)
-------------------------------------------------------------
Indicated 417,000 1,060 9.31 9.79
-------------------------------------------------------------
Inferred 73,000 758 9.19 9.69
-------------------------------------------------------------
Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA), independent geological and mining consultants, prepared the estimate as at February 3, 2008 in accordance with the guidelines set forth in National Instrument 43-101 ("NI 43-101").
The Guadalupe and Guadalupe South Mantos account for 51% of the Indicated Resource and a large portion of the increase. In addition, the newly and not-completely delineated Rodilla Manto contributed 75,200 tonnes or 18% of the total Indicated Mineral Resource.
Significant Estimation Parameters
The estimate is based on data for drill holes completed through to December 10, 2007, and production data to February 3, 2008. The resources were estimated through block modelling in Gemcom Software. Volumes were constrained using 3D wireframes interpreted at a cut off grade of U.S. $40/tonne Net Smelter Return ("NSR") value. Assumptions used for the NSR calculation include metal prices of U.S. $13.00/oz silver, $0.90/lb lead, and $1.10/lb zinc. Silver grades were capped at 10,000 g/t prior to compositing. Block silver, lead and zinc grades were interpolated within the wireframes using the Inverse Distance Squared method. The Platosa drill hole database includes 444 vertical and inclined diamond drill holes totalling 78,065 metres of core. Most holes within the Mineral Resource area are aligned along NE-SW oriented sections spaced 15 metres apart for an average drill hole spacing is approximately 15 to 20 metres. A total of 612 silver, lead and zinc assays were used in the Mineral Resource estimate. Block tonnage was estimated from volume using a bulk density formula derived from the interpolated lead and zinc grades and a regression formula derived from 85 bulk density measurements made on mineralized drill core. The estimate is of Mineral Resources only and, because these do not constitute Mineral Reserves, they do not have any demonstrated economic viability.
A detailed description of the estimation and other pertinent geotechnical information related to the Platosa project will be included in an NI 43-101-compliant technical report being prepared for the Company by Scott Wilson RPA and to be filed on SEDAR within the mandated 45 days of this press release.
Qualified Persons
Dr. Peter Megaw, PhD, CPG, and Mr. John Sullivan, BSc., PGeo., have acted as Qualified Persons, as defined in NI 43-101, for this disclosure and have supervised the preparation of the technical information, which formed the basis for the updated Mineral Resource disclosed in this press release.
Dr. Megaw has a PhD in geology and more than 25 years of relevant experience focused on exploring silver and gold systems in Mexico. He is a Certified Professional Geologist (CPG 10227) by the American Institute of Professional Geologists and an Arizona Registered Geologist (ARG 21613). Dr. Megaw is not independent of Excellon as he is a shareholder.
Mr. Sullivan is an economic geologist with over 35 years of experience in the mineral industry. Most recently a senior geologist at a Toronto-based international geological and mining engineering consulting firm, he has evaluated properties and prepared NI 43-101 reports on gold and base metal projects in Canada and internationally. Mr. Sullivan is not independent of Excellon as he is an officer and holds common share purchase options.
Mr. D. W. Rennie, P.Eng., a Consulting Geological Engineer, and Mr. David Ross, P.Geo., a Senior Geologist, both employed by Scott Wilson RPA, acted as the Qualified Persons, as defined in NI 43-101, for the Scott Wilson RPA Mineral Resource estimate. Mr. Rennie, Mr. Ross, and Scott Wilson RPA are independent of Excellon.
Quality Assurance and Quality Control
The Platosa exploration program is supervised by John R. Sullivan, Excellon's vice-president of exploration. Drill core samples are prepared by SGS Laboratories in Durango, Mexico, with silver and gold assayed in Durango. Sample pulps are sent to SGS Canada Inc. and further assaying is carried out at its ISO/IEC 17025 accredited laboratory in Toronto, Ontario. Excellon has a comprehensive quality assurance and quality control program in place that is supervised by an independent QP.
About Excellon
Excellon, a self-sustaining mineral resource company operating in Durango State, Mexico, is committed to building value through production, expansion and discovery. The Company is producing silver, lead and zinc from high grade manto deposits on its Platosa Property, strategically located in the middle of the Mexican silver belt. In fiscal 2008, Excellon's focus is on increasing its Mineral Resources through an aggressive $11-million exploration program, expanding its operation, and studying the feasibility of building a mill at site. The Platosa Property, not fully explored, has several geological indicators of a large mineralized system, the tracking of which Excellon believes will lead to the discovery of a world class deposit.
On behalf of
EXCELLON RESOURCES INC.
Richard W. Brissenden, President and Chief Executive Officer
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 27E of the Exchange Act. Such statements include, without limitation, statements regarding future anticipated exploration program timing, content, cost and results, the discovery and delineation of mineral deposits/resources/reserves at the Company's Platosa property, business and financing plans, business trends and future operating revenues. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.
This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this Press Release, which has been prepared by management.
Contact:
Annemarie Brissenden
Excellon Resources Inc.
Manager, Corporate Communications
(416) 364-1130
(416) 364-6745 (FAX)
Email: abrissenden@excellonresources.com
Website: www.excellonresources.com
Paramount Expands High Grade Gold and Silver Mineralization to Depth and Confirm Their First High Grade Zone (Clavo) Within the San Miguel Vein
Friday February 29, 3:11 am ET
Link to full story with charts: http://biz.yahoo.com/iw/080229/0368811.html?printer=1
CHIHUAHUA, MEXICO--(MARKET WIRE)--Feb 29, 2008 -- Paramount Gold and Silver Corp. (Toronto:PZG.TO - News)(AMEX:PZG - News)(Frankfurt:P6G.F - News)(WKN: A0HGKQ) is pleased to announce assay results from 14 drill holes in the San Miguel Zone of its San Miguel project in the Guazapares Mining District, Mexico. Drill holes SM-05 to SM-18 were drilled 30-90 meters apart and were designed to intercept the San Miguel vein structure approximately 50-150 meters below the surface.
These drill holes extend the high grade gold and silver mineralization found in holes SM-01 to SM-04 (reported Jan. 24, 2008 (http://www.paramountgold.com/news/press_release.asp?ID=100100)). The nature of this mineralization suggests that we have found what is commonly known in Mexico as a Clavo; a mineralized body inside a vein with small dimensions and high grades. In light of these assay results, this part of the area in the San Miguel zone will be referred to as 'Clavo 99'. The mineralization in 'Clavo 99' was extended by approximately 100m down dip: SM-13 (12.53m of 1.38 g/t Au Eq. and 1.03m of 9.26 g/t Au), SM-15 (4.02m of 13.87 g/t Au Eq.) and SM-18 (8.03m of 2.22 g/t Au Eq.), and 100m along strike to the southeast: SM-05 (5.06m of 3.71 g/t Au Eq.) and SM-07 (6.65m of 5.18 g/t Au Eq.). For a complete view of all drill hole locations from the San Miguel vein, please see the attached longitudinal section at the end of this press release.
Highlights of these assay results are seen in the table below (visit www.paramountgold.com for further assay details, map of project showing the location of the San Miguel Zone, map of the southern part of the Zone itself, and a longitudinal section of the vein structure):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Gold Gold
True Gold Silver Equiv. Equiv.
Hole From To Interval Width (grams/ (grams/(grams/(grams x
Number (Meters) (Meters) (Meters) (Meters) ton) ton) ton) meters)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-05 50.75 57.90 7.15 5.06 1.05 159.00 3.71 18.76
--------------------------------------------------------------------------
Including: 3.01 0.99 258.86 5.30 15.95
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-06 51.90 62.00 10.10 7.14 0.82 41.00 1.50 10.71
--------------------------------------------------------------------------
Including: 1.34 2.28 120.00 4.29 5.76
--------------------------------------------------------------------------
98.50 115.00 16.50 10.94 0.75 18.00 1.05 11.49
--------------------------------------------------------------------------
Including: 1.00 4.49 19.00 4.81 4.81
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-07 45.00 48.60 3.60 2.55 0.48 60.00 1.48 3.77
--------------------------------------------------------------------------
48.60 50.80 2.20 1.56 Cavity
--------------------------------------------------------------------------
50.80 56.00 5.20 3.68 0.46 67.00 1.58 5.81
--------------------------------------------------------------------------
56.00 56.60 0.60 0.42 Cavity
--------------------------------------------------------------------------
56.60 66.00 9.40 6.65 0.93 255.00 5.18 34.43
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-09 74.35 75.15 0.80 0.57 2.70 129.00 4.85 2.74
--------------------------------------------------------------------------
84.20 86.50 2.30 1.63 1.03 147.00 3.47 5.64
--------------------------------------------------------------------------
102.65 108.00 5.35 3.78 2.44 216.47 6.05 22.87
--------------------------------------------------------------------------
Including: 1.27 6.75 15.00 7.00 8.91
--------------------------------------------------------------------------
Including: 0.71 0.00 1050.00 17.50 12.37
--------------------------------------------------------------------------
133.00 135.00 2.00 1.15 4.30 88.00 5.75 6.59
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-10 54.90 58.90 4.00 2.83 1.23 207.00 4.69 13.26
--------------------------------------------------------------------------
134.00 134.80 0.80 0.40 3.94 107.00 5.72 2.29
--------------------------------------------------------------------------
134.80 136.30 1.50 0.75 Cavity
--------------------------------------------------------------------------
136.30 137.10 0.80 0.40 3.61 91.00 5.13 2.05
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-11 26.50 28.20 1.70 1.30 0.28 140.00 2.60 3.39
--------------------------------------------------------------------------
65.30 69.30 4.00 3.06 2.10 15.00 2.35 7.20
--------------------------------------------------------------------------
85.00 86.00 1.00 0.77 64.70 0.00 64.70 49.56
--------------------------------------------------------------------------
154.10 155.30 1.20 0.77 93.70 0.00 93.70 72.19
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-13 122.10 123.70 1.60 1.03 6.39 172.00 9.26 9.52
--------------------------------------------------------------------------
including 0.51 12.65 231.00 16.50 8.48
--------------------------------------------------------------------------
123.70 143.20 19.50 12.53 0.76 37.23 1.38 17.30
--------------------------------------------------------------------------
including 4.82 1.22 78.23 2.52 12.15
--------------------------------------------------------------------------
157.00 163.80 6.80 4.37 1.04 5.76 1.13 4.94
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-14 38.00 41.00 3.00 2.60 0.48 33.00 1.03 2.68
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-15 130.80 132.70 1.90 1.14 3.30 502.95 11.68 13.32
--------------------------------------------------------------------------
including 0.48 6.02 1090.00 24.19 11.61
--------------------------------------------------------------------------
139.00 145.70 6.70 4.02 4.32 572.73 13.87 55.76
--------------------------------------------------------------------------
including 0.60 4.85 1785.00 34.60 20.76
--------------------------------------------------------------------------
including 0.60 15.40 186.00 18.50 11.10
--------------------------------------------------------------------------
148.40 151.10 2.70 1.62 7.94 35.00 8.53 13.82
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-16 45.50 49.70 4.20 3.64 0.51 323.00 5.89 21.42
--------------------------------------------------------------------------
140.00 148.00 8.00 6.93 0.98 4.00 1.05 7.27
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SM-18 93.30 99.00 5.70 3.66 0.10 292.00 4.96 18.15
--------------------------------------------------------------------------
99.00 105.40 6.40 4.11 0.06 55.00 0.97 3.99
--------------------------------------------------------------------------
139.00 151.60 12.60 8.03 1.53 41.00 2.22 17.82
--------------------------------------------------------------------------
including 1.28 4.90 118.00 6.86 8.81
--------------------------------------------------------------------------
including 1.28 3.41 6.00 3.50 4.49
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Gold Gold
True Gold Silver Equiv. Equiv.
Hole From To Interval Width (grams/ (grams/(grams/(grams x
Number (Meters) (Meters) (Meters) (Meters) ton) ton) ton) meters)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Larry Segerstrom, COO of Paramount Gold and Silver Corp., commented, "These results confirm the continuity of the gold and silver mineralization from the surface down to at least 150 meters of depth. They also extend the mineralization to 250 meters along strike and it remains open. These grades and volumes are consistent with and substantiate the discovery of a high-grade ore shoot similar to those at nearby Palmarejo. The geological characteristics of the vein structure strongly suggest that similar mineralization may persist to a depth of 250 meters or more."
Currently, 'Clavo 99' is approximately 275 m wide and goes to a depth of 150 m. Assays are pending on holes SM-19 to SM-24, which were drilled to test the strike length potential of the system. Paramount is currently drilling the San Miguel vein deeper and along strike to better define 'Clavo 99' and to test for other Clavos. Holes SM-34 and SM-35, which have just been sent to ALS Chemex for assaying, were drilled to test the Clavo to 200 m of depth. SM-34 was drilled 50 meters below SM-15, and SM-35 was drilled 50 meters below SM-18 and SM-20.
Quality Control
Paramount takes detailed digital photos of the entire core before it is cut by saw to half core which is assayed at ALS Chemex's Vancouver laboratory. As part of quality assurance, quality control (QA/QC), Paramount has put into place a detailed program of periodically introducing certified standards, blanks and duplicates into the sample stream. Half-core samples are being retained on site for verification and reference purposes.
The qualified person who has reviewed this news release is Dana C. Durgin, M. Sc. Economic Geology. He is a Certified Professional Geologist (CPG #10364) with the American Institute of Professional Geologists, and a Registered Professional Geologist in Wyoming (PG-2886).
About Paramount
Paramount Gold is listed on the AMEX and TSX under the symbol PZG and trades on the Frankfurt Stock Exchange under the symbol P6G (WKN: A0HGKQ). Paramount Gold is a precious metals mining exploration company presently in the early stages of an extensive exploration program at their San Miguel project in the Guazapares Mining District, part of the Sierra Madre Occidental gold-silver belt of Mexico. Paramount has completed over 29,000 meters of core drilling, totaling 162 drill holes on the project, with results pending on approximately 33 holes. In April 2007, Paramount began a 50,000 meter drill program, of which 22,000 meters have been completed to date. In 2007, Paramount completed $25 million in financing which is being utilized to develop their San Miguel and Andrea projects and other opportunities.
Paramount Gold and Silver Corp. is the operator of the San Miguel project, which is a joint venture with Tara Gold Resources Corp. (Other OTC:TRGD.PK - News) (30%). Tara Gold is required to contribute 30% of exploration costs to maintain their interest.
"Safe-Harbor" Statement: This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company may not be realized. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially.
A map of the San Miguel Area is available on the Marketwire website at the following address: http://media3.marketwire.com/docs/SanMiguelArea.jpg
- Longitudinal Section of the southern part of the San Miguel vein structure.
- Note: AuEq60 is gold-equivalent calculated at a 60:1 silver to gold ratio.
Contact:
Contacts:
Paramount Gold and Silver Corp.
Larry Segerstrom
COO
613-226-9881
Paramount Gold and Silver Corp.
Chris Halkai
Corporate Relations
866-481-2233
613-226-9881
http://www.paramountgold.com
Petrominerales Announces Record Year End Results and Reserves
Thursday February 28, 8:39 pm ET
http://biz.yahoo.com/ccn/080228/200802280445640001.html?.v=1&printer=1
BOGOTA, COLOMBIA--(Marketwire - Feb. 28, 2008) - Petrominerales Ltd. (TSX:PMG - News; "Petrominerales" or the "Company"), 76.5% owned subsidiary of Petrobank Energy and Resources Ltd. (TSX:PBG - News; OSLO:PBG - News; "Petrobank"), is pleased to announce record fourth quarter and year-end financial and operating results, a 51% increase in proved plus probable reserves and a 152% increase in proved plus probable NPV discounted at 10% (before taxes) to US$1.3 billion.
(All further references to $ are United States dollars unless otherwise noted)
RESERVES
Total proved plus probable reserves in Colombia have increased by 51%, based on the DeGolyer and MacNaughton ("D&M") evaluation as at December 31, 2007. All reserves stated herein are based on forecast prices and costs and are company interest reserves after Ecopetrol's (the State oil company) share, and before royalties. D&M's work incorporates an update of their comprehensive geological and petrophysical evaluation of the Corcel, Orito, Neiva and Joropo properties. The evaluation does not include any reserves associated with our remaining 13 exploration blocks.
Summary results of the D&M report are highlighted as follows:
- Total proved reserves increased by 52% to 20.6 million barrels.
- Total proved plus probable reserves increased by 51% to 37.0 million barrels.
- Total proved, probable and possible reserves increased by 53% to 51.9 million barrels.
- Total proved plus probable NPV 10% (before taxes) increased 152% to $1.3 billion (3P - $1.8 billion).
- Proved plus probable reserve additions replaced 815% of 2007 production.
- Total proved plus probable F&D costs, including expenditures incurred on exploration blocks, and changes in future development costs were $21.74/bbl in 2007.
Reserves - Company Interest
Light and Medium Oil (mbbl)
----------------------------------------------------------------------------
Developed Producing 9,118
Total Proved 20,597
Total Proved + Probable 36,977
Total Proved + Probable + Possible 51,930
Reserve Reconciliation Proved +
Total Proved + Probable +
Proved Probable Possible
----------------------------------------------------------------------------
December 31, 2006 reserves 13,563 24,531 33,906
2007 production (1,740) (1,740) (1,740)
Net additions 8,774 14,186 19,764
------------- ------------------------------------
December 31, 2007 reserves 20,597 36,977 51,930
Year over year increase in reserves 52% 51% 53%
Production replacement 504% 815% 1,136%
Net Present Value Before Tax ($ millions)
2007
------------------------------------
0% 5% 10% 15%
------------------------------------
Proved Developed Producing 558.8 497.3 447.9 415.5
Total Proved 1,091.7 918.8 787.4 698.5
Proved + Probable 1,885.1 1,558.7 1,314.9 1,156.4
Proved + Probable + Possible 2,636.4 2,168.0 1,819.4 1,598.7
Net Present Value - After Tax - Forecast Prices ($ millions)
As at December 31, 2007
2007
------------------------------------
0% 5% 10% 15%
------------------------------------
Developed Producing 470.0 420.1 379.4 352.1
Total Proved 814.1 690.9 596.4 531.1
Proved + Probable 1,291.8 1,070.8 905.1 794.3
Proved + Probable + Possible 1,745.3 1,435.0 1,204.2 1,053.2
The disclosures required in accordance with National Instrument 51-101 of the Canadian Securities Administrators will be available in the Company's Annual Information Form to be filed on the SEDAR website at www.sedar.com in March.
FINANCIAL & OPERATING HIGHLIGHTS
In 2007 we launched a significant exploration campaign to position ourselves for long-term growth. The program was highlighted by our Corcel discovery which has resulted in significant increases in production. We continued our development at Orito and recent production increases have demonstrated our success leading into our 2008 development drilling program. Our financial and operating results for the fourth quarter of 2007 highlights significant increases over the fourth quarter of 2006 as follows:
- Crude oil production increased by 304%, averaging 9,575 barrels per day, mainly due to production from our Corcel discovery.
- Operating netbacks increased by 60% to $62.50/bbl.
- Funds flow from operations increased by 668% to $51.8 million.
- Net income increased by 778 percent to $23.5 million.
Financial and Operating Results
The following table provides a summary of Petrominerales' financial and operating results for the three and twelve month periods ended December 31, 2007 and 2006. Consolidated financial statements with Management's Discussion and Analysis (MD&A) are now available on the Company's website at www.petrominerales.com and will also be available on the SEDAR website at www.sedar.com.
Three months ended Years ended
December 31, % December 31, %
2007 2006 change 2007 2006 (1) change
----------------------------------------------------------------------------
Financial ($000s,
except where noted)
Crude oil revenue 68,600 11,038 521 121,802 43,676 179
Funds flow from
operations (2) 51,778 6,745 668 85,883 28,789 198
Per share - basic
($) (3) 0.52 0.07 643 0.89 0.33 170
- diluted
($) (3) 0.50 0.07 614 0.88 0.33 167
Net income 23,491 2,677 778 47,551 14,798 221
Per share - basic and
diluted ($) (3) 0.23 0.03 667 0.49 0.17 188
Capital expenditures 37,216 23,617 58 143,022 73,365 95
Total assets 441,462 181,407 143 441,462 181,407 143
Working capital
(net debt) (2) 106,691 11,469 830 106,691 11,469 830
Common shares
outstanding, end of
period (000s)
Basic 100,289 95,000 6 100,289 95,000 6
Diluted (4) 108,854 98,051 11 108,854 98,051 11
Operations
Operating netback
($/bbl) (2)
Crude oil revenue 77.87 50.58 54 70.00 54.54 28
Royalties 7.88 4.05 95 6.55 4.38 50
Production expenses 7.49 7.35 2 7.16 6.87 4
----------------------------------------------------------------------------
Operating netback 62.50 39.18 60 56.29 43.29 30
Average daily crude
oil production (bbls) 9,575 2,372 304 4,767 2,194 117
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Proved plus probable
reserves (mbbls) (5) 36,977 24,531 51
----------------------------------------------------------------------------
----------------------------------------------------------------------------
NPV 10% before tax ($
millions) 1,314.9 521.8 152
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Amounts in the periods ending on or before June 30, 2006 have been
translated and restated in United States dollars from the previously
reported Canadian dollar amounts. See "Change in Accounting Policy"
within Management's Discussion and Analysis ("MD&A").
(2) Non-GAAP measure. See "Non-GAAP Measures" section within MD&A.
(3) Assumed weighted average number of basic and diluted shares totalled
78,999,900 prior to incorporation on April 20, 2006. See "Formation of
the Company" within MD&A.
(4) Assumes 3,656,508 common shares will be issued upon conversion of the
Company's convertible debentures which were issued in December 2007.
(5) Company working interest before deduction of royalties.
OPERATIONAL UPDATE
Production has averaged 8,927 bopd in February 2008 which includes 4,929 bopd from Corcel. In April we plan to run electrical submersible pumps with capacities of 15,000 barrels of fluid per day in both our Corcel-1 and 2 wells which are expected to increase Corcel production. The high fluid rates concurrent with increasing water cuts will allow us to maximize the ultimate recovery of original oil in place.
We continue to test our Corcel-3 well. An additional 600 feet of geological section was drilled in Corcel-3 below what was previously thought to be economic basement. During the drilling of the additional section, we encountered sands with oil and gas shows before drilling was terminated and the decision to case the well was made. Three of these new intervals were evaluated, two unsuccessfully, and the interval from 12,449 feet to 12,461 feet was perforated and successfully tested 27 degree API crude oil at rates up to 760 bopd, with fluctuating water cuts. We have temporarily suspended this interval. The test interval from 12,240 to 12,258 in the lower Guadalupe has been tested and produced 100% water. We plan to test one additional uphole zone.
We then plan to drill our next Corcel well, Corcel-4, vertically on the crest of the structure. This will allow us to fully evaluate the potential of the lower zones encountered in Corcel-3 in a significantly up-dip location, access attic oil in the Guadalupe and Mirador zones, and drill a well all the way to economic basement. The lower sand unit in Corcel-3 was not seen in Corcel-1, as the well was not drilled deep enough but in Corcel-2 the lower sand is over 75 feet thick and approximately 95 feet structurally higher than the interval tested in Corcel-3. The Corcel-4 well is expected to be 150 feet up-dip of the Corcel-3 well. We also plan to drill the Corcel-C prospect as our next Corcel exploration well during the second quarter of 2008, after the surface location is constructed.
On our Joropo Block, the Ojo de Tigre-3 well has been completed in the Carbonera formation. We have perforated 17 feet of C7 sands and will begin production testing the well using a jet pump system within the next week.
Our Casanare Este-2 well reached a total depth of 10,570 feet on February 27. We plan to log the well over the next week.
Our first exploration well on the Las Aguilas Block, Conga-1, was drilled in late 2007, yielding a new pool discovery. While the well demonstrated non-commercial quantities of hydrocarbons in the Caballos zone, the primary formation in Orito, it was completed as an oil well in the lower Villeta formation. We plan to test additional up-hole Villeta potential in this well and test the Villeta zones in our closest Orito well, Orito-133, in 2008.
Our first phase seismic work commitments on our Llanos Basin heavy oil blocks are nearly complete and are now being interpreted. On the Chiguiro Oeste and Rio Ariari Blocks, we have competed shooting 576 kilometres of reconnaissance 2D seismic. On the Chiguiro Este Block, we are shooting a reconnaissance 2D program, and a 3D seismic program to better define two channel systems previously identified from 2D seismic. These programs are expected to be complete in early March.
Petrominerales Ltd.
Petrominerales Ltd. is a Latin American-based exploration and production company producing oil in Colombia with 15 exploration blocks covering a total of 1.6 million acres in the Llanos and Putumayo Basins. Petrominerales is 76.5% owned by Petrobank (TSX/Oslo Bors: PBG).
Certain information provided in this press release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Specifically, this press release contains forward-looking statements relating to the timing of capital projects and the results of operations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. You can find a discussion of those risks and uncertainties in our Canadian securities filings. Such factors include, but are not limited to: general economic, market and business conditions; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; timing and rig availability, outcome of exploration contract negotiations; fluctuation in foreign currency exchange rates; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations; and other factors, many of which are beyond the control of the Company. There is no representation by Petrominerales that actual results achieved during the forecast period will be the same in whole or in part as those forecast. Except as may be required by applicable securities laws, Petrominerales assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
arnie - EXN
I have been molding with EXN.TO for so long I forgot the .V - .TO switch. My last purchase was in August when it went to $.90. I never got close to the $.90 bargain but the $1.20's were just fine.
Thanks for posting the symbols for everyone.
Kipp
EXN.V Silver
Look at the chart of EXN.V:
http://stockcharts.com/charts/gallery.html?EXN.TO
The sellers are all washed out from the long sideways move. EXN will report more assay results from recent drilling, announce new reserve estimate, get permit for new mill, all in the next few weeks. Earnings, cash in the bank, labor problems have calmed down. I am looking for multi-bagger as silver moves into the $20's this year.
Take another look guys, this is a potential monster stock in the making.
Kipp
Capstone expansion on track:
CS.TO remains a great long term hold:
"Mill Expansion Project
Tons mined and processed were higher in the four months ended December 31, 2007 compared to previous 2007 periods as expansion to the 2,200 tpd was completed in September. Capital expenditures are budgeted at $10 million to further expand the facility to 3,000 tpd which is expected to be completed by the fourth quarter this year."
Kipp
CAPSTONE EARNINGS:
Link to full report so you can read tables:
http://biz.yahoo.com/iw/080228/0368289.html
Capstone Mining December 31, 2007 Four Month Stub Period Results
Thursday February 28, 8:30 am ET
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Feb 28, 2008 -- Capstone Mining Corp. ("Capstone") (Toronto:CS.TO - News) announces its financial results for the four month stub period ending December 31, 2007 including production and sales for the Cozamin mine located in Zacatecas State, Mexico. All dollar amounts are stated in U.S. dollars unless otherwise indicated.
Overview and Highlights
For the four months ended December 31, 2007, Capstone's earnings, before future income tax allowance were $16.8 million or $0.21 per share ($0.20 per share diluted), and earnings, after future income tax allowance, a non-cash item, were $10.4 million or $0.13 per share ($0.12 per share diluted).
- Revenue for the four months ended December 31, 2007 was $33.0 million. The average realized price for sales of copper, zinc, lead and silver in the four months was $3.09/lb, $1.07/lb, $1.24/lb and $8.40/oz respectively.
- Copper production during the four months ended December 31, 2007 was 9.0 million lbs compared with 13.9 million lbs for the 12 months ended August 31 2007 (65% of the previous 12 month period).
- At December 31, 2007, Capstone had working capital of $51.7 million including $25 million in cash, $8.1 million in marketable securities, current receivables of $14.9 and no bank debt, in addition the fair market value of Capstone's share ownership of Silverstone Resources Corp. as of today is approximately $90 million, which is not included in working capital.
- Copper cash costs for the four months ended December 31, 2007 were $0.96/lb of copper (net of by-product credits and including smelter, refining, transportation and all site costs).
- Total costs (the aggregate of cash costs, royalty, depletion and amortization and accretion) for the four months ended December 31, 2007 were $1.16/lb.
- Capstone continued its share buyback plan and purchased an additional 815,500 common shares on the open market at an average price of CDN$2.76. The shares have been returned to treasury and cancelled under its normal course issuer bid.
- During the four month stub period the Cozamin mine operated at its current designed throughput rate of 2,200 tpd.
------------------------------------------------------------------------
4 months ended Year ended
December 31, 2007 August 31, 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenue $33.0M $55.3M
------------------------------------------------------------------------
Copper $26.5M $37.7M
------------------------------------------------------------------------
Zinc $ 1.5M $ 8.0M
------------------------------------------------------------------------
Lead $ 1.9M $ 2.7M
------------------------------------------------------------------------
Silver $ 3.1M $ 6.9M
------------------------------------------------------------------------
Operating profit $16.8M $27.2M
------------------------------------------------------------------------
Earnings (before future tax) $16.8M $25.2M
------------------------------------------------------------------------
EPS - basic (before future tax) $ 0.21 $ 0.31
------------------------------------------------------------------------
Earnings (after future taxes) $10.4M $22.7M
------------------------------------------------------------------------
EPS - basic $ 0.13 $ 0.28
------------------------------------------------------------------------
Cozamin Mine
4 Months Ended December 31, 2007 Production and Sales Highlights
- Capstone produced the following metals during the year.
- 9.0 million pounds of copper
- 2.5 million pounds of zinc
- 1.6 million pounds of lead
- 414,000 ounces of silver
- Concentrate sales for the period were dry metric tonnes ("DMT"), containing;
- 8.6 million pounds of copper
- 1.4 million pounds of zinc
- 1.5 million pounds of lead
- 377,000 ounces of silver
Concentrate inventory at December 31, 2007 was 9,793 DMT (containing 2.8 million pounds of copper, 2.9 million pounds of zinc and 0.5 million pounds of lead).
December 31, 2007 Production Results and Forecast for 2008 and 2009
------------------------------------------------------------------
2008 (F) 2009 (F)
------------------------------------------------------------------
Total tons milled 850,000 1,000,000
------------------------------------------------------------------
------------------------------------------------------------------
Copper (payable lbs) 30,000,000 40,000,000
------------------------------------------------------------------
Silver (payable ounces) 1,300,000 1,500,000
------------------------------------------------------------------
Zinc (payable lbs) 9,000,000 10,000,000
------------------------------------------------------------------
Lead (payable lbs) 5,100,000 5,000,000
------------------------------------------------------------------
The following table is a summary of the actual operating statistics for
the four months ended December 31, 2007 and the year ended August 31, 2007.
---------------------------------------------------------------------------
4 months
ended Year ended
Dec 31, 2007 Aug 31, 2007
---------------------------------------------------------------------------
Total tons mined 251,716 484,641
---------------------------------------------------------------------------
Tons of ore milled 260,714 461,933
---------------------------------------------------------------------------
Copper grade (%) 1.79 1.59
---------------------------------------------------------------------------
Zinc grade (%) 1.24 1.47
---------------------------------------------------------------------------
Silver grade (g/t) 69 71
---------------------------------------------------------------------------
Lead grade (%) 0.52 0.6
---------------------------------------------------------------------------
Copper recovery (%) 87.1 86
---------------------------------------------------------------------------
Zinc recovery (%) 41.3 44.9
---------------------------------------------------------------------------
Silver recovery (%) 73.3 73
---------------------------------------------------------------------------
Lead recovery (%) 49.8 52.6
---------------------------------------------------------------------------
Copper production (million DMT lbs) 9.0 13.9
---------------------------------------------------------------------------
Zinc production (million DMT lbs) 2.5 6.8
---------------------------------------------------------------------------
Silver production ('000 ounces) 414 747
---------------------------------------------------------------------------
Lead production (million DMT lbs) 1.6 3.0
---------------------------------------------------------------------------
Note: Silver reports to all concentrates.
Stub Four Month Period Production Highlights
Copper
- Copper in concentrate produced during the four month period was 9.0 million pounds of copper, year ended August 31, 2007 was 13.9 million.
- Copper concentrate sales for the period were 18,277 dry metric tons ("DMT"), containing 8.6 million pounds of copper, year ended August 31, 2007 was 11.8 million.
- The average price for sales of copper in the period was $3.09/lb.
- Copper concentrate inventory at December 31, 2007 was 5,631 DMT, an increase in inventory from the 5,447 DMT of concentrate on hand at August 31, 2007.
- Silver in the copper concentrate produced during the period totaled 335,000 ounces.
Zinc
- Zinc in concentrate produced during the four month period was 2.5 million pounds of zinc, year ended August 31, 2007 was 6.8 million.
- Zinc sales for the period were 1,799 DMT, containing 1.4 million pounds of zinc, year ended August 31, 2007 was 5.0 million.
- The average price for sales of zinc in the period was $1.07/lb.
- Zinc concentrate inventory at December 31, 2007 was 3,804 DMT, an increase in inventory from the 2,413 DMT of concentrate on hand at August 31, 2007.
- Silver in the zinc concentrate produced during the period totaled 12,000 ounces.
Lead
- Lead in concentrate produced during the four month period was 1.6 million pounds of lead, year ended August 31, 2007 was 3.0 million.
- Lead concentrate sales for the period were 1,147 DMT, containing 1.5 million pounds of lead, year ended August 31, 2007 was 2.8 million.
- The average price for sales of lead in the period was $1.24/lb.
- Lead concentrate inventory at December 31, 2007 was 358 DMT, an increase in inventory from the 290 DMT of concentrate on hand at August 31, 2007.
- Silver in the lead concentrate produced during the period totaled 67,000 ounces.
Mill Expansion Project
Tons mined and processed were higher in the four months ended December 31, 2007 compared to previous 2007 periods as expansion to the 2,200 tpd was completed in September. Capital expenditures are budgeted at $10 million to further expand the facility to 3,000 tpd which is expected to be completed by the fourth quarter this year.
Labour
There were 4 minor lost time accidents during the period from both operations and construction. The number of personnel at the end of the period was 530, of which approximately 90 were contractors related to the expansion project.
Four Month Actual Sales
Actual sales and costs for the year are tabulated below.
---------------------------------------------------------------
4 months
ended
Dec 31, 2007
---------------------------------------------------------------
Copper (million lbs) 8.6
---------------------------------------------------------------
Zinc (million lbs) 1.4
---------------------------------------------------------------
Lead (million lbs) 1.5
---------------------------------------------------------------
Silver ('000 ounces) 377
---------------------------------------------------------------
Copper production costs, net of by product
credits, per lb of copper $ 0.55
---------------------------------------------------------------
Off property costs for transport, smelting
and refining per lb of copper $ 0.41
---------------------------------------------------------------
Total cash costs of production per lb of copper $ 0.96
---------------------------------------------------------------
Copper production costs in the four months ended December 31, 2007 were $0.21 above plan reflecting the impact of the company having sold less zinc and writing down a portion of the zinc with lower grade in the concentrate and the lower by product metal prices.
Financial Results
The information in this news release and the selected financial information contained in the following pages should be read in conjunction with the audited Consolidated Financial Statements and Management Discussion and Analysis for the four months ended December 31, 2007, which will be available at Capstone's website at www.capstonemining.com and at www.sedar.com.
The Company's earnings before future tax accruals for the four months ended December 31, 2007 were $16.8 million or $0.21 per share compared to earnings of $25.2 million or $0.31 per share for the year ended August 31, 2007. The Company's net earnings for December 31, 2007 were $10.4 million or $0.13 per share compared to $22.7 million or $0.28 per share for August 31, 2007 after future income tax allowance, a non-cash item.
The Company reported revenues for the four month period of $33.0 million (year ended August 31, 2007 - $55.3 million). Revenues consisted of copper concentrate sales of $26.5 million, zinc concentrate sales of $1.5 million, lead concentrate sales of $1.9 million and silver in concentrate sales of $3.1 million.
Cost of sales for the four month period was $9.0 million (year ended August 31, 2007 - $14.2 million), treatment and transportation charges were $5.3 million (August 31, 2007 - $10.1 million), royalty charges were $0.6 million (August 31, 2007 - $1.4 million) and depletion was $0.9 million (August 31, 2007 - $1.7 million).
For the four month period ended December 31, 2007, the Company recorded an unrealized gain related to mark-to-market on the outstanding derivative contracts in the amount of $2,928,644 (August 31, 2007 - $Nil).
A future income tax provision of $6.3 million was recorded at December 31, 2007 compared to $2.5 million at August 31, 2007. The increase in the income tax provision is mainly due to the reversal of the current future income tax asset set up at August 31, 2007 as well as an increase in the excess of book value of capital assets over tax values.
Glencore International AG and Trafigura Beheer B.V. purchases the concentrates produced by the Cozamin mine pursuant to the terms of a written contract.
Capstone Mining Corp.
Selected Financial Information
Consolidated Balance Sheets
-------------------------------------------------------------------------
Dec 31, Aug 31,
2007 2007
-------------------------------------------------------------------------
Cash $ 25,114,753 $ 35,988,166
Marketable securities 8,097,348 -
Investment in Silverstone Resources Corp. 39,022,891 28,498,044
Property, plant and equipment 45,655,190 44,616,033
Other assets 27,090,014 24,888,492
-------------------------------------------------------------------------
Total assets 144,980,196 133,990,735
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Deferred revenue 41,398,281 43,056,390
Other liabilities 17,833,194 15,561,814
-------------------------------------------------------------------------
Total liabilities 59,231,475 58,618,204
Shareholder's equity 85,748,721 75,372,531
-------------------------------------------------------------------------
Total liabilities and shareholders' equity 144,980,196 133,990,735
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Operations
-------------------------------------------------------------------------
Four months Year
ended ended
Dec 31, Aug 31,
2007 2007
-------------------------------------------------------------------------
Total revenues $ 32,975,274 $ 55,335,647
Total cost of sales (16,157,585) (28,138,291)
-------------------------------------------------------------------------
Operating profit 16,817,689 27,197,356
G&A and other expenses (3,437,958) (3,773,660)
Other items 3,409,803 1,726,946
-------------------------------------------------------------------------
Earnings (loss) before income taxes 16,789,534 25,150,642
Future income tax (6,333,610) (2,479,593)
-------------------------------------------------------------------------
Earnings (loss) for the year 10,415,923 22,671,049
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EPS - Basic 0.13 0.28
EPS - Diluted 0.12 0.27
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capstone will host a conference call on Friday, February 29 at 8:00 a.m. Pacific Time (11:00 AM Eastern Time) to discuss these results. The conference call may be accessed by dialing 1.866.514.1894 in North America or 1.480.248.5085 internationally, please ask for the Capstone Mining Corp. conference call. The conference call will be archived for later playback until March 7, 2008 and can be accessed by dialing 1.866.501.5559 and the passcode is 21264082#.
ABOUT CAPSTONE
Capstone is a Canadian based mining company currently operating the 100% owned Cozamin copper-silver-lead-zinc mine located in Zacatecas State, Mexico. Capstone has approximately 81.4 million shares outstanding and is well financed with no bank debt. More information is available online at: www.capstonemining.com.
LT - AOS.V
They will get taken out at a huge premium way before the 4 years you are thinking. All it will take is the first deal for one of the major oil sands companies to buy one of the jr. explorers.
We shall see!
Kipp
AOS $.04/bbl Oil!! Repost
Posted by: kipp440
In reply to: None Date:2/9/2008 8:59:49 AM
Post #of 2046
AOS.V - $.04 Per Barrel Oil!!!!
Take a few minutes to scroll this presentation and see why AOS is worth holding. I hold a lot of slightly underwater shares.
http://www.aboilsands.ca/documents/Presentations/AOS_London_Presentation.pdf
Holding for longer term 10 bagger.
Kipp
INFLATION!!!!!!!
PPI rocketing skyward. You need to have Energy, Gold/Silver, Agricuture to protect your wealth from the ravages of inflation.
Stagflation.
There are great picks and great posters over on the VMC Jr's Energy, Miners, and Ag boards:
http://investorshub.advfn.com/boards/board.asp?board_id=9329
http://investorshub.advfn.com/boards/board.asp?board_id=5834
http://investorshub.advfn.com/boards/board.asp?board_id=9423
The talking heads can't figure out that B.R.I.C. are consuming commodities like no tomorrow. We will slow down here in the U.S. but the world keeps turning.
Jr. gold and silver miners are dirt cheap!
Kipp
EXN.V - Take another look!
Guys,
Print out the map and drill results in this press release:
http://biz.yahoo.com/iw/080221/0365076.html
Look at the results and see that the Manto's are all conected. There is one hole that had 62 ounces of silver, granted it was only 1 metre thick, but that's a huge strike.
The company has a lot of news coming up: new reserve estimate, mill permit, cash in the bank, continued drilling, high silver prices. Sprott is heavily invested here.
There is a good chance that they will find the "source" of the massive sulfides, the MOTHER LODE!
Holding and Molding.
Kipp
POE.V - New IR Presentation/Update
I see more gushers coming from POE.V, here is the latest presentation. The tax picture is still a bit murky to me, but the production and oil price means this stock will go up considerably. Kipp
http://www.panorient.ca/POE-PP-Updated-FEB-2008b.pdf
Comments from another poster:
"The 2008 drilling plan....
33 well program commenced:
16 well appraisal/development program at Na Sanun East/ Na Sanun
3 well exploration program in L33
8 well exploration program in L44
1 well appraisal program at POE-6
5 well exploration program at L53
Wichian Buri/L33
Note: Please refer to page 11
Twenty wells with the prefix of "JHC" just appeared in this presentation. It appears the company is gaining confidence that the Wichian Buri field extends to the north almost to the dividing line between L44 and L33. But the focus remains elsewhere since they state..."1 well appraisal program at POE-6". I'll be interested in seeing where they spud that one well, if they go for one of these new JHC wells (JHC-1B?) or return to the inventory of unused POE series of wells in the area from last year. Also if you look carefully two wells show up with the prefix "L33", possibly part of "3 well exploration program in L33".
The Edge
(Stratigraphic Zero Edge)
(page 12 to 19)
A Stratigraphic Zero Edge is the place where a formation(rock layer) pinches out.(goes to zero thickness).
Note: Please refer to map on page 15.
It is obvious the company is referring to the volcanic layers when they refer to this ‘stratigraphic zero edge’ the question is are they referring to all four layers or just one in particular. I think contacting the company is the only way to find the definitive answer. It seems to me that the aerial extent is just too great for this edge to be referring to just the 'main volcanic' layer (Zone 2), especially the large 'western lobe' off of the southern compartment. (But I in no way discount this as a possibility) And if the stratigraphic zero edge is just the aerial extent of the 'main volcanic layer' one has to wonder what is the full extent of all four layers.
Regarding this 'western lobe' I believe it is below the Oil/Water contact point therefore not productive. I base this conclusion on the one little blurb we have from the company regarding the O/W contact point from the NR dated 10/18/2007...
"These test results confirm the hydrocarbon potential of a fairway that is a minimum 7.5 kilometers in length (north-south) and whose maximum extent is still unconstrained by a defined oil/water contact to the north and south as well as to the east."(Notice what is missing there....the word 'west'.)
This 'western lobe' might be below the O/W contact point now but in the past I have a feeling that it was not and was a source for much of the oil we now see in the central and southern compartments. Which ties in with something I said in the past...
"I keep thinking that there is just too much oil present to be sourced from directly below the field. My current thinking is the sills extended for some distance away from the field (down - dip or down slope from the field) and generated oil in those outlying areas. When the sills cooled and fractured the oil then used them as pathways (going up-dip) back to our fields."
NSE Southern Compartment
Note: Please refer to map on page 18.
The legend states...Proposed Wells (15) and Producing Wells (5) yet I only count two new wells. And the real oddity is the producing wells are a combination of both the producing color (green) and the proposed color (pink). Maybe the company is just going to drill deviated well off of the currently producing wells.
NSE Central Compartment
Note: Please refer to map on page 19.
The real excitement appears to be here with twelve proposed wells. Looking carefully at the proposed wells we find only seven locations but four of these locations have multiple 'legs'(up to three) coming off of them, bringing the total up to twelve. Gentlemen I believe we are looking at the conformation that the horizontal wells that the company has discussed in the past are about to become a reality.
Two things of note on this map:
1. Three of these proposed wells are outside the NSE Production License area and will probably be development wells thinly disguised as a 'L44 exploration well'. (Extension to permit coming this year?)
2. There is a new leg that appears to be coming off of L44-H (which in fact brings the total to 13 wells) what is unclear is if this well be drilled from the existing L44-H well or if they will construct another pad very close by.
Closing Comments
The company appears to be at The Edge of a drilling campaign that will lead to its production rapidly expanding. The often mentioned 20,000 barrels per day exit rate for the end of 2008(12,000bpd net to POE) now seem like a target completely in sight. I would not be surprised if the company achieves this goal and surpasses it to the upside. Considering the 2007 drilling successes and the technical work that was achieved in that time we should also see a large increase in the reserves when they are reported this spring. This year the focus appears to be expanding production with just enough exploration to keep the old blood pumping, a balanced approach that I like very much."
POE.V - New IR Presentation/Update
I see more gushers coming from POE.V, here is the latest presentation. The tax picture is still a bit murky to me, but the production and oil price means this stock will go up considerably. Kipp
http://www.panorient.ca/POE-PP-Updated-FEB-2008b.pdf
Comments from another poster:
"The 2008 drilling plan....
33 well program commenced:
16 well appraisal/development program at Na Sanun East/ Na Sanun
3 well exploration program in L33
8 well exploration program in L44
1 well appraisal program at POE-6
5 well exploration program at L53
Wichian Buri/L33
Note: Please refer to page 11
Twenty wells with the prefix of "JHC" just appeared in this presentation. It appears the company is gaining confidence that the Wichian Buri field extends to the north almost to the dividing line between L44 and L33. But the focus remains elsewhere since they state..."1 well appraisal program at POE-6". I'll be interested in seeing where they spud that one well, if they go for one of these new JHC wells (JHC-1B?) or return to the inventory of unused POE series of wells in the area from last year. Also if you look carefully two wells show up with the prefix "L33", possibly part of "3 well exploration program in L33".
The Edge
(Stratigraphic Zero Edge)
(page 12 to 19)
A Stratigraphic Zero Edge is the place where a formation(rock layer) pinches out.(goes to zero thickness).
Note: Please refer to map on page 15.
It is obvious the company is referring to the volcanic layers when they refer to this ‘stratigraphic zero edge’ the question is are they referring to all four layers or just one in particular. I think contacting the company is the only way to find the definitive answer. It seems to me that the aerial extent is just too great for this edge to be referring to just the 'main volcanic' layer (Zone 2), especially the large 'western lobe' off of the southern compartment. (But I in no way discount this as a possibility) And if the stratigraphic zero edge is just the aerial extent of the 'main volcanic layer' one has to wonder what is the full extent of all four layers.
Regarding this 'western lobe' I believe it is below the Oil/Water contact point therefore not productive. I base this conclusion on the one little blurb we have from the company regarding the O/W contact point from the NR dated 10/18/2007...
"These test results confirm the hydrocarbon potential of a fairway that is a minimum 7.5 kilometers in length (north-south) and whose maximum extent is still unconstrained by a defined oil/water contact to the north and south as well as to the east."(Notice what is missing there....the word 'west'.)
This 'western lobe' might be below the O/W contact point now but in the past I have a feeling that it was not and was a source for much of the oil we now see in the central and southern compartments. Which ties in with something I said in the past...
"I keep thinking that there is just too much oil present to be sourced from directly below the field. My current thinking is the sills extended for some distance away from the field (down - dip or down slope from the field) and generated oil in those outlying areas. When the sills cooled and fractured the oil then used them as pathways (going up-dip) back to our fields."
NSE Southern Compartment
Note: Please refer to map on page 18.
The legend states...Proposed Wells (15) and Producing Wells (5) yet I only count two new wells. And the real oddity is the producing wells are a combination of both the producing color (green) and the proposed color (pink). Maybe the company is just going to drill deviated well off of the currently producing wells.
NSE Central Compartment
Note: Please refer to map on page 19.
The real excitement appears to be here with twelve proposed wells. Looking carefully at the proposed wells we find only seven locations but four of these locations have multiple 'legs'(up to three) coming off of them, bringing the total up to twelve. Gentlemen I believe we are looking at the conformation that the horizontal wells that the company has discussed in the past are about to become a reality.
Two things of note on this map:
1. Three of these proposed wells are outside the NSE Production License area and will probably be development wells thinly disguised as a 'L44 exploration well'. (Extension to permit coming this year?)
2. There is a new leg that appears to be coming off of L44-H (which in fact brings the total to 13 wells) what is unclear is if this well be drilled from the existing L44-H well or if they will construct another pad very close by.
Closing Comments
The company appears to be at The Edge of a drilling campaign that will lead to its production rapidly expanding. The often mentioned 20,000 barrels per day exit rate for the end of 2008(12,000bpd net to POE) now seem like a target completely in sight. I would not be surprised if the company achieves this goal and surpasses it to the upside. Considering the 2007 drilling successes and the technical work that was achieved in that time we should also see a large increase in the reserves when they are reported this spring. This year the focus appears to be expanding production with just enough exploration to keep the old blood pumping, a balanced approach that I like very much."
manny t - My point exactly!
I have stated that Mosaic or PCS will take KCL out with their new found wealth! They will get their market caps up to $80-100 billion and then go on a buying spree. The fun thing for us will be if they both want the reserves in a bad way. I can easily see a billion or two for the deal.
We shall see!
Kipp
GRAIN PRICES SMASH RECORDS!
Look at the grain prices today.
http://www.cbot.com/cbot/pub/page/0,3181,949,00.html
Oil and natural gas strong as well.
Fertilizer stocks hitting all time record highs.
Food price/energy inflation is here to stay.
Canadian dollar up 1.5%.
Kipp
cl001 - KCL - When is the last time we had a stock rocket on volume right after a dilutive PP??? Not since the good old days of base metal mania.
We have a big winner here!
Kipp
Wade - KCL Rocketship
Wade,
KCL doesn't qualify for VMC. It is talked about heavily on the VMC Food and Ag board found at http://investorshub.advfn.com/boards/board.asp?board_id=9423
It will go down as one of the all time biggest gainers in the VMC universe.
Kipp
EXN.V - Still looking for Elephant!
This news went little noticed last week. I still hold shares purchased in August. Kipp
Excellon Discovers 4.7 Metres of New Massive Sulphides in NE-1 Manto and Adds to Rodilla
Thursday February 21, 11:49 am ET
TORONTO, ONTARIO--(Marketwire - Feb. 21, 2008) - Excellon Resources Inc. (TSX:EXN - News) has intersected important new massive sulphide manto mineralization in holes LP444 and LP447 (see table and map below) in the NE-1 area, 100 metres (m) east of the Rodilla Manto. LP447 intersected an estimated true thickness of 4.72 m of sphalerite and galena-rich massive sulphides. LP444, drilled 40 m to the north of LP447, cut 0.2 m of similar massive sulphides. Assays for both intersections are pending. This is the first follow up drilling to discovery Hole LP173, drilled 20 m to the west-northwest of LP447 in 2006, which intersected an estimated true thickness of 3.17 m of massive to semi-massive sulphides grading 580 g/t (16.9 oz/T) silver, 8.3% lead and 6.2% zinc. The NE-1 Manto remains open in several directions and drilling continues in this area.
ADVERTISEMENT
The Company also announces assays for six holes in the Rodilla Manto (see table below). The intersections include massive to disseminated and breccia sulphides and range in estimated true thickness from 0.91 to 15.25 m. They carry from 96 to 2,130 g/t (2.8 to 62.1 oz/T) silver; 0.2 to 10.1% lead; and 0.04 to 13.5% zinc. These values are comparable to those previously reported from Rodilla (see press releases of December 13, November 13, and October 16, 2007) including the discovery hole (LP326), which cut an estimated true thickness of 2.0 m of massive sulphides grading 1,143 g/t (33.3 oz/T) silver with 8.3% lead and 10.7% zinc.
In addition, three new massive sulphide and sulphide breccia intercepts, with estimated true thicknesses of 4.17 m (LP442), 7.52 m (LP446) and 2.55 m (LP448), have been made in ongoing drilling of Rodilla (see table and map below). The massive sulphide intercepts in these three vertical holes consist largely of massive sphalerite with subordinate galena and 10 to 20% barite gangue. Assays are pending. Hole LP446 has the potential to expand Rodilla 40 m to the east-southeast, although an additional hole is required to confirm this. Of significance to eventual development and test-mining plans, Hole LP442, drilled in an approximate 30 m gap between Rodilla and the Guadalupe Manto, demonstrates that these two mantos are connected. Five additional holes (LP435, LP437, LP438, LP441, and LP445 - shown on the map) drilled in the immediate Rodilla Manto area encountered the favourable fragmental limestone unit, but did not intersect significant sulphides. Rodilla remains open in several directions, and drilling continues in this area.
Scott Wilson Roscoe Postle Assoc. Inc. is nearing completion of the updated Mineral Resource estimate and the Company expects to receive this near the beginning of March.
"We are pleased with the continued growth of the Rodilla Manto and particularly encouraged by the new and exciting massive sulphide intercepts in the NE-1 area," said Richard W. Brissenden, Excellon's CEO and president. "These developments validate our ongoing strategy of aggressive follow-up drilling of all sulphide intercepts while continuing to test other areas of our large property where geological, geochemical and geophysical data suggest that additional CRD mineralization remains to be discovered."
To view the Table: Assay Results, Sulphide Intersections and Assays Pending, please visit the following link: http://media3.marketwire.com/docs/ASSAYRESULTS.pdf.
To view Map 1: Location Map and Map 2: Mantos and Recent Drill Hole Locations, please visit the following link: http://media3.marketwire.com/docs/MAPS1AND2.pdf.
The Platosa exploration program is supervised by John R. Sullivan, Excellon's vice-president of exploration. Drill core samples are prepared by SGS Laboratories "SGS" in Durango, Mexico, with silver and gold assayed in Durango. Sample pulps are sent to SGS Canada Inc. and further assaying is carried out at its ISO/IEC 17025 accredited laboratory in Toronto, Ontario.
Qualified Persons
Dr. Peter Megaw, PhD, CPG, and Mr. John Sullivan, BSc., PGeo., have acted as the Qualified Persons, as defined in National Instrument 43-101, for this disclosure and have supervised the preparation of the technical information on which this press release is based.
Dr. Megaw has a PhD in geology and more than 25 years of relevant experience focused on exploring silver and gold systems in Mexico. He is a Certified Professional Geologist (CPG 10227) by the American Institute of Professional Geologists and an Arizona Registered Geologist (ARG 21613). Dr. Megaw is not independent of Excellon as he is a shareholder.
Mr. Sullivan is an economic geologist with over 35 years of experience in the mineral industry. Most recently a senior geologist at a Toronto-based international geological and mining engineering consulting firm, he has evaluated properties and prepared National Instrument 43-101 reports on gold and base metal projects in Canada and internationally. Mr. Sullivan is not independent of Excellon as he is an officer and holds common share purchase options.
About Excellon
Excellon, a self-sustaining mineral resource company operating in Durango State, Mexico, is committed to building value through production, expansion and discovery. The Company is producing silver, lead and zinc from high grade manto deposits on its Platosa Property, strategically located in the middle of the Mexican silver belt. In fiscal 2008, Excellon's focus is on increasing its Mineral Resources through an aggressive $11-million exploration program, expanding its operation, and studying the feasibility of building a mill at site. The Platosa Property, not fully explored, has several geological indicators of a large mineralized system, the tracking of which Excellon believes will lead to the discovery of a world class deposit.
On behalf of
EXCELLON RESOURCES INC.
Richard W. Brissenden, President and Chief Executive Officer
cl001 - KCL
Potash One is lining up to be our big winner this year. The right management, sector, product, country, etc. We need some good drill results to demonstrate the same mineralization that Mosaic is mining at Belle Plain extends on to KCL property. I am in favor of slow walking this project and doing it in a very deliberate, professional way. Plenty of funding, all of the right moves. One of the majors is going to pay up big time for these reserves. I too shy away from non-producers and hesitate to buy more shares. I have enough to be very meaningful and I'm just going to enjoy this ride. I don't have your knack for timing and buy and mold works for me.
As for agriculture in general, we are in big trouble. Grain reserves are getting to dangerously low levels, and now we are going to burn the inventory in our gas tanks. If we have harsh weather and yields suffer we will see famine for those who can't pay more than the next country. The public is totally clueless to what is going on. You can still buy fast food off the $.99 menu and that's all they know. CNBC was saying the fertilizer stocks are doomed, just like the .com stocks. I don't remember dot coms haveing P/E's under 20!!!!
Let's hope KCL plays hard to get and gives us at least a 10 bagger or more!
Thanks for allof your commitment and hard work on the VMC Jr's. YOU ARE THE MAN IN PSL8!!
Good Luck!
Kipp
Cornerstone Natural Gas Report
Rig count keeps dropping. Prices are firming up. New Natural Gas fired power plants are coming online over the next few years. We should be looking at these stocks again. Some of my oil stocks have lots of gas too, like TXCO, CXPO.OB.
http://www.cornerstoneenergy.com/marketnews/mi022208.pdf
Anybody have any natural gas stocks with big potential to double or triple production over the next few years?
Kipp
Good Summary of Oil/Gas Markets
http://www.financialsense.com/fsu/editorials/dancy/2008/0222b.html
My favorite stocks are: TXCO, POE.V, OIL.TO, PMG.TO, CXPO.OB, and AOS.V speculative tar sands play. I own all of these stocks and plan to hold for long term gains as they ramp up production in an increasing energy price and inflationary environment. These smaller companies can increase production 100, 200, 300+%, where the mega cap companies can not.
I see $150 oil and $15 natural gas in 2009.
Kipp
Newsletter Email for KCL
(This showed up in my email, Kipp)
Potash One Inc. (TSX Venture: KCL)
Summary
The demand for potash is growing steadily in the face of increasing global population and a looming food crisis. The explosive growth in China and India, and the coincident increase in food requirements has made net importers out of nations that once were self-sufficient in terms of food supply. This has put increased pressure on farmers to max out yields through optimized fertilization programs. Potash is the source of Potassium in the NPK (Nitorgen- Phosphate Potassium- triplet of fertilizer designations.)
There are a handful of companies who control the Saskatchewan potash district, and in terms of the few development companies that are advancing to production before the end of this decade, only Potash One has the management team with the been-there done-that pedigree that makes them the best bet.
Potash One is taking a different approach to production. They cherry picked a land package they believe will be amenable to solution mining which tend to offer lower capital costs and a quicker timeline to production (4-5 years) versus traditional mining (7-8 years). The project has had two successful solution mining tests conducted by previous operators.
Company president Paul Matysek was the CEO and President of Energy Metals Corporation, a premiere uranium company traded on New York Stock Exchange and Toronto Stock Exchange. Energy Metals became one of the fastest growing companies in Canada in the last two years having grown from a market capitalization of only $10 million in 2004 to $1.2 billion when it was sold to a larger uranium producer earlier in 2007.
Click here for the rest of the article:
http://www.midasletter.com/premium/Potash-One-Report.php
Midas Letter is a publication of Midas Publishing, LLC, an independent financial publishing company owned and operated by James West, a twenty year veteran of financial journalism with a focus on small cap companies.
The information provided herein is derived from sources believed to be reliable but no warranty as to accuracy is express or implied. Midas Publishing and its employees have received no compensation for the authorship and/or distribution of this letter, though the company and/or its employees may from time-to-time purchase shares in the open market, or may participate in private financings at discounted prices.
This document is provided for information purposes only, and is not to be construed as investment advice to either purchase or sell securities in any company herein mentioned
For Investor Relations Contact:
Arlen Hansen,
Kin Communications Inc.
Suite 1810-925 West Georgia St
Vancouver, BC V6C 3L2
P 604.684.6730
F 604.684.6740
Toll Free: 1.866.684.6730
arlen@kincommunications.com
To ensure you are receiving our emails please add ir@kincommunications.com to your address book.
Kin Communications (KinCom) provides, for remuneration, corporate communications and investor relations services to the above mentioned client(s). The information contained in this email is based on existing disclosure documents or other publicly available information. You are encouraged to seek independent verification of any information that is important to your decision and speak with an investment advisor regarding any of your decisions. KinCom nor the above mentioned client(s) is not offering securities or advising or soliciting the purchase or sale of securities.
Potash One - KCL.V
(I pasted an email I sent out this morning below, Kipp)
Here is a link to an interview with the CEO of Potash One – KCL.V
After the advertisement go to the 4 minute mark.
http://broadband.bnn.ca/bnn/?sid=205&vid=33572
I see a major fertilizer company using their high priced stock to buy Potash One. They have 360 million tons of potash that is worth $450-500/ton. They are steaming ahead to develop a solution mine. There is no way Mosaic and PCS are going to stand for them to get to completion and start the mine. I encourage all of you to study the company website and try to understand what they are sitting on. The equity financing announced Thursday puts a $4.00 floor on the stock price. They are having no trouble jumping millions of dollars to move the company forward.
http://www.isxresources.com/s/NewsReleases.asp?ReportID=287568&_Type=News-Releases&_Title=Potash-One-Announces-Equity-Financing
Here is a link to the stock info.
http://www.stockhouse.ca/comp_info.asp?symbol=KCL&table=LIST
The current market cap is $115 million. There are approximately 25 million shares outstanding. The question you need to ask yourself is what value do you put on 360 million tons of potash that is still in the ground, in a politically safe part of the world? If you say it is worth $1.00/ton you can value the company at $360 million, or 3x the current stock price.
I have a meaningful amount of shares here and am banking on someone valuing the reserves at a much higher level than pennies per ton. A strong stomach for volatility and some patience here will be rewarded.
My 2 cents.
Kipp
Silverstone Provides 4 Months Silver Sales and Increases Sales Forecast
Wednesday February 20, 8:00 am ET
http://biz.yahoo.com/iw/080220/0364146.html (NICE!, Kipp)
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Feb 20, 2008 -- Silverstone Resources Corp. (CDNX:SST.V - News) ("Silverstone") reports sales of 737,000 ounces of silver in 2007. Silverstone previously forecast 2007 silver sales of 700,000 ounces (see October 10, 2007 news release). The additional silver was due to increased production rates at the Cozamin mine. On September 28, 2007, Silverstone completed the purchase of 100% of the life of mine silver from Lundin Mining's Neves-Corvo and Aljustrel mines (see June 6, 2007 press release). Silverstone started to receive silver from Neves-Corvo production commencing on October 1, 2007. The Aljustrel mine began commissioning in late 2007. Silverstone changed its fiscal year end from August 31 to December 31 and will be filing its audited four month stub period ending December 31, 2007 in March 2008 and therefore will not be reporting quarterly financials at November 30, 2007. Silverstone is pleased to report silver sales results for the four months ended December 31, 2007. Silverstone purchased 2007 production at an average cost of US$3.98 per ounce. The cost of silver is fixed at less than US$4.00 per ounce through 2010.
PMG.TO Chart - Look at this reversal!
http://stockcharts.com/charts/gallery.html?PMG.TO
Will CXPO.OB do the same thing? Comments?
Kipp
TXCO Chart - Nice Consolidation!
http://stockcharts.com/charts/gallery.html?TXCO