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KCL.TO is not a P.M. mine opportunity.....BUT, it is mining and some of you here may not follow all of the VMC boards. Most of you l know Donald Coxe and Peeker posted this on another board and I think it is darn possible:
Don Coxe sees KCL as potential takeover target by BHP Billiton.
Canadian potash juniors: Prime BHP takeover targets
DonCoxe, one of North America's best regarded mining gurus, reckons that a trio of Canadian junior potash explorers will be key takeover targets for BHP Billiton.
Author: Marc Davis
Posted:Wednesday,24 Jun 2009
Vancouver, BC (BNW News Wire) -
Canada's trio of small but well-financed potash exploration juniors - WesternPotash (TSX.V: WPX), Potash One (TSX: KCL) and Athabasca Potash (TSX:API) - are obvious takeover targets for potash-hungry BHP Billiton, the world's largest mining company. So says Don Coxe, one of the investmentindustry's leading experts on commodities.
Chicago-based Coxe is the chief strategist for Canada's CoxeCommodity Strategy Fund (TSX: COX.UN), which was named after him by theBMO Financial Group, the big-league investment banking firm that runs the fund.
BHP Billiton has already stated that it wants to be a "major" player in the potash industry within the next decade. And it is already hard at work developing the world's largest potash mine ever. Located 150 kilometres east of Saskatoon near the town of Jansen, it will eventually produce eight million tonnes per year mine and is scheduled for commissioning in early 2015. The mine will cost upwards of Cdn.$2.5 billion to build.
Yet, the diversified Australia-based mining company is a newcomer to the potash business and its grand aspirations cannot be realized with the commercialization of just one potash mine - no matter how big it is. Hence, Coxe believes that BHP Billiton may become an aggregator by buying out other valuable potash resources, such as potash deposits that are already in-development elsewhere in Saskatchewan.
And the most obvious candidates would be Saskatchewan's trio of publicly-traded potash explorers - Western Potash, Potash One, and Athabasca Potash - all of which are making good headway with their respective flagship projects.
"If you're a small potash exploration company operating in Saskatchewan, BHP Billiton might be interested in you," Coxe hinted during an exclusive interview with BNW Business News Wire. "Their cashflows are enormous and they want to be known as the leading resource company in the world."
This astute insight is shared by Jacob Bout, a fertilizers analyst for the Toronto-based investment banking heavyweight CIBC World Markets.
"Companies involved solely in exploration of potash are likely take-out candidates, either by diversified mining companies seeking away into the potash industry or by countries looking to lock-in supply," he stated a few months ago in a comprehensive research report entitled ‘Global Potash Supply - A Focus on Saskatchewan Exploration.'
In the same report, Bout pointed out that BHP Billiton is "lookingto get involved in potash mining." It is worth noting that globalmining giant Vale has recently taken over all of Rio Tinto's globalpotash assets, making Vale another potential suitor for potash juniorsin Saskatchewan.
A BHP Billiton spokesperson, Ruban Yogarajah, declined to discuss any future takeover plans that BHP Billiton might have to significantly build up its potash assets in the region in order to become a "major" producer.
Among the three remaining publicly-traded mining juniors that are still in the race to develop Saskatchewan's first new potash mine in nearly 40 years is Potash One. It announced the completion of a multi-million dollar pre-feasibility study (a preliminary blueprint for a mine) in late June. The assessment suggests that Potash One's solution-extraction amenable (low-cost and scalable) Legacy Deposit has a net present value of US $4.47 billion.
The company recently received another major boost with the arrivalof its new chairman, Robert Friedland, in May. The mining magnate is best-known as the man behind the epic Voisey's Bay nickel discovery in the remote Labrador region of eastern Canada. His company later sold the deposit to the mining multinational Inco Ltd. (now Vale Inco) for the princely sum of Cdn. $4.3 billion.
Coxe says he greatly admires Robert Friedland's "visionary" business acumen and believes that the famous financier has made a shrewd move by becoming the new driving force behind Potash One.
Friedland's efforts to develop huge mining projects in Mongolia and the Democratic Republic of Congo have lately been thwarted by "Third World politics," Coxe laments. By comparison, Friedland's commitment to developing a new potash mine in Saskatchewan represents a "pretty attractive" opportunity, he adds.
Meanwhile, BHP Billiton's drive to break into Canada's lucrative potash mining business may prove to be yet another master stroke, experts agree. In recent years, BHP Billiton helped break up De Beers' seemingly omnipotent diamond cartel with the commercialization of Canada's first ever diamond mine in 1998 - the rich Ekati Mine in the Northwest Territories.
Such takeover talk is music to the ears of Western Potash's president, Patricio Varas. "At WPX, we are exploring and developing a world-class resource. But lots of work is still ahead of us to prove and show companies like BHP that we have a worthwhile asset. On ourside, we have the funds and the technical ability to explore and discover that one special asset that attracts mine builders like BHP," he told BNW News Wire.
Rumours are even circulating that BHP Billiton could take a run at Potash Corp. of Saskatchewan - which boasts the world's largest potash reserves. Fai Lee, a mining analyst for another major Canadian investment bank, RBC Capital Markets, thinks that the merger would make strategic sense.
"We view Potash Corp.'s potash assets as long-life, low-cost assets that can be expanded and are largely export-oriented. As such, we believe Potash Corp.'s potash business would represent a good fit with BHP Billiton's stated business strategy," he recently advised clients.
Published courtesy of BNW Business News Wire.
KCL.TO is not a P.M. mine oportunity.....BUT, it is mining and some of you here may not ffollow all of the VMC boards. Most of you l know Donald Coxe and Peeker posted this on another board and I think it is darn possible:
Don Coxe sees KCL as potential takeover target by BHP Billiton.
Canadian potash juniors: Prime BHP takeover targets
DonCoxe, one of North America's best regarded mining gurus, reckons that a trio of Canadian junior potash explorers will be key takeover targets for BHP Billiton.
Author: Marc Davis
Posted:Wednesday,24 Jun 2009
Vancouver, BC (BNW News Wire) -
Canada's trio of small but well-financed potash exploration juniors - WesternPotash (TSX.V: WPX), Potash One (TSX: KCL) and Athabasca Potash (TSX:API) - are obvious takeover targets for potash-hungry BHP Billiton, the world's largest mining company. So says Don Coxe, one of the investmentindustry's leading experts on commodities.
Chicago-based Coxe is the chief strategist for Canada's CoxeCommodity Strategy Fund (TSX: COX.UN), which was named after him by theBMO Financial Group, the big-league investment banking firm that runs the fund.
BHP Billiton has already stated that it wants to be a "major" player in the potash industry within the next decade. And it is already hard at work developing the world's largest potash mine ever. Located 150 kilometres east of Saskatoon near the town of Jansen, it will eventually produce eight million tonnes per year mine and is scheduled for commissioning in early 2015. The mine will cost upwards of Cdn.$2.5 billion to build.
Yet, the diversified Australia-based mining company is a newcomer to the potash business and its grand aspirations cannot be realized with the commercialization of just one potash mine - no matter how big it is. Hence, Coxe believes that BHP Billiton may become an aggregator by buying out other valuable potash resources, such as potash deposits that are already in-development elsewhere in Saskatchewan.
And the most obvious candidates would be Saskatchewan's trio of publicly-traded potash explorers - Western Potash, Potash One, and Athabasca Potash - all of which are making good headway with their respective flagship projects.
"If you're a small potash exploration company operating in Saskatchewan, BHP Billiton might be interested in you," Coxe hinted during an exclusive interview with BNW Business News Wire. "Their cashflows are enormous and they want to be known as the leading resource company in the world."
This astute insight is shared by Jacob Bout, a fertilizers analyst for the Toronto-based investment banking heavyweight CIBC World Markets.
"Companies involved solely in exploration of potash are likely take-out candidates, either by diversified mining companies seeking away into the potash industry or by countries looking to lock-in supply," he stated a few months ago in a comprehensive research report entitled ‘Global Potash Supply - A Focus on Saskatchewan Exploration.'
In the same report, Bout pointed out that BHP Billiton is "lookingto get involved in potash mining." It is worth noting that globalmining giant Vale has recently taken over all of Rio Tinto's globalpotash assets, making Vale another potential suitor for potash juniorsin Saskatchewan.
A BHP Billiton spokesperson, Ruban Yogarajah, declined to discuss any future takeover plans that BHP Billiton might have to significantly build up its potash assets in the region in order to become a "major" producer.
Among the three remaining publicly-traded mining juniors that are still in the race to develop Saskatchewan's first new potash mine in nearly 40 years is Potash One. It announced the completion of a multi-million dollar pre-feasibility study (a preliminary blueprint for a mine) in late June. The assessment suggests that Potash One's solution-extraction amenable (low-cost and scalable) Legacy Deposit has a net present value of US $4.47 billion.
The company recently received another major boost with the arrivalof its new chairman, Robert Friedland, in May. The mining magnate is best-known as the man behind the epic Voisey's Bay nickel discovery in the remote Labrador region of eastern Canada. His company later sold the deposit to the mining multinational Inco Ltd. (now Vale Inco) for the princely sum of Cdn. $4.3 billion.
Coxe says he greatly admires Robert Friedland's "visionary" business acumen and believes that the famous financier has made a shrewd move by becoming the new driving force behind Potash One.
Friedland's efforts to develop huge mining projects in Mongolia and the Democratic Republic of Congo have lately been thwarted by "Third World politics," Coxe laments. By comparison, Friedland's commitment to developing a new potash mine in Saskatchewan represents a "pretty attractive" opportunity, he adds.
Meanwhile, BHP Billiton's drive to break into Canada's lucrative potash mining business may prove to be yet another master stroke, experts agree. In recent years, BHP Billiton helped break up De Beers' seemingly omnipotent diamond cartel with the commercialization of Canada's first ever diamond mine in 1998 - the rich Ekati Mine in the Northwest Territories.
Such takeover talk is music to the ears of Western Potash's president, Patricio Varas. "At WPX, we are exploring and developing a world-class resource. But lots of work is still ahead of us to prove and show companies like BHP that we have a worthwhile asset. On ourside, we have the funds and the technical ability to explore and discover that one special asset that attracts mine builders like BHP," he told BNW News Wire.
Rumours are even circulating that BHP Billiton could take a run at Potash Corp. of Saskatchewan - which boasts the world's largest potash reserves. Fai Lee, a mining analyst for another major Canadian investment bank, RBC Capital Markets, thinks that the merger would make strategic sense.
"We view Potash Corp.'s potash assets as long-life, low-cost assets that can be expanded and are largely export-oriented. As such, we believe Potash Corp.'s potash business would represent a good fit with BHP Billiton's stated business strategy," he recently advised clients.
Published courtesy of BNW Business News Wire.
KCL.TO Don Coxe mention is huge! Credible!
KCL.TO - NEWS
Potash Files 43-101 Technical Report on the Legacy Project
Press Release
Source: Potash One Inc.
On Tuesday June 23, 2009, 8:30 am EDT
Potash One Inc. (the "Company" or "Potash One") (TSX: KCL) is pleased to announce that, further to its news release dated May 14, 2009, it has filed today with the Canadian securities regulators, a 43-101 Technical Report dated June 15, 2009 (the "Report") on its Legacy Project in Saskatchewan, Canada. The Report was prepared by Dr. Michael Hardy, Ph.D., P. Eng. of Agapito Associates Inc., Grand Junction, Colorado and Stephen Halabura, P.Geo. and Debbie Shewfelt, M.Sc., P.Geo, of North Rim Exploration Ltd., Saskatoon, Saskatchewan. The Report can be found on SEDAR at www.sedar.com and on the Company's website at www.potashone.com.
ON BEHALF OF THE BOARD OF DIRECTORS,
Paul F. Matysek, M.Sc., P.Geo., President and Chief Executive Officer
About Potash One Inc.:
Potash One Inc. is a well-funded, TSX-listed Canadian resource company engaged in the exploration and development of advanced potash properties amenable to solution mining. The Company owns 100% of more than 515,000 acres of Potash Subsurface Exploration Permits in Saskatchewan, Canada. It includes the 97,240 acre Legacy Project, which has a NI 43-101-compliant Measured Resource of 29 million tonnes of KCl, an Indicated Mineral Resource of 222 million tonnes of KCl and an Inferred Mineral Resource of 852 million tonnes of KCl. The Legacy Project is adjacent to the largest producing solution potash mine in the world.
The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.
Contact:
Here is a link to a really, really good website that reports the economic news of the day. Most of the stories are the facts that the main stream media barley mentions.
http://www.cliffkule.com/
Kipp
More Homeowners Facing Foreclosure
By JACK HEALY
More homeowners than ever before are falling behind on their mortgage payments and sliding into foreclosure, according to figures released on Thursday, a sign that the country’s housing crisis is spreading through the ranks of previously stable borrowers.
About 5.4 million of the country’s 45 million home loans were delinquent or in some stage of the foreclosure process in the first three months of the year, according to the Mortgage Bankers Association. About 12.07 percent of all mortgages were delinquent or in foreclosure, up from 11.93 percent at the end of 2008.
Temporary halts on foreclosures imposed by lenders and mortgage underwriters have mostly ended, and banks are moving quickly against delinquent homeowners.
Housing specialists said the number of foreclosures would probably keep rising as more people lose their jobs or are forced to trade full-time work for part-time. Nearly six million jobs have been lost since the recession began a year and a half ago, and many economists expect the unemployment rate to rise to 10 percent from its current 8.9 percent.
More defaults by unemployed homeowners could shunt more houses onto an already saturated market, economists said, dragging prices down farther.
“We’re still caught in this vicious cycle,” said Patrick Newport, an economist at IHS Global Insight. “These numbers were horrible, and they’re going to get worse. This problem’s going to be with us for a while.”
The wave of employment-driven foreclosures could pose new challenges to the administration as it tries to stabilize falling housing values and keep up to nine million families in their homes.
In a recent paper, a group of economists at the Boston Federal Reserve said that foreclosure-prevention programs could be more effective if they provided direct aid to struggling homeowners, rather than focusing on modifying existing loans to reduce monthly payments.
The figures released Thursdaysuggested that prime fixed-rate loans were supplanting risky subprime loans and rising adjustable-rate mortgages as the driving force behind the country’s foreclosure crisis.
The foreclosure rate on prime fixed-rate mortgages, the industry’s standard plain-vanilla loan, doubled in the last year, according to the Mortgage Bankers Association, and for the first time, those loans make up the largest share of new foreclosures.
In the first quarter, a seasonally adjusted 6.06 percent of all prime loans were delinquent, up from 5.06 percent in the last quarter of 2008.
“More than anything else, this points to the impact of the recession and drops in employment on mortgage defaults,” Jay Brinkmann, chief economist of the Mortgage Bankers Association, said in a statement. “It does not appear the level of mortgage defaults will begin to fall until after the employment situation begins to improve.”
Although the problems are spreading through the market, the states hit hardest by the real-estate bust are still besieged by high delinquency rates. Four states — California, Florida, Arizona and Nevada — account for 46 percent of all new foreclosures in the country. And subprime loans continue to deteriorate, with 25 percent at least one payment behind in the first quarter.
Meanwhile, the government reported that new-home sales increased slightly in April, rising a seasonally adjusted 0.3 percent from a month earlier. On Wednesday, an industry group reported that sales of previously owned homes — which make up the most of the housing market — rose 2.9 percent last month as buyers went looking for bargains.
Still, the total inventory of homes on the market rose to a supply that would take 10.2 months to burn off, reflecting the incoming tide of distressed sales and foreclosures.
Next economic crisis looms: Commercial real estate defaults
Kevin G. Hall
McClatchy Newspapers
WASHINGTON — Two years after fissures in the residential housing market gave way to a national collapse of home prices and sales, experts warn the next shoe to drop is the commercial real-estate market, bringing more woes to the battered economy.
Thousands of commercial mortgages valued at hundreds of billions of dollars are approaching a renewal date. By some estimates, two out of every three will no longer meet the original loan conditions and won't be able to refinance. And with prices for commercial properties expected to plunge, a vicious cycle may unfold much as it has in the nation's housing market.
"It's the next wave to hit. It's the next round of bad news," said Scott Talbott, the senior vice president of government affairs for the Financial Services Roundtable, a trade group for big banks and other financial institutions who are collectively concerned about the coming problems.
A commercial mortgage meltdown is likely to prolong the nation's economic recovery. The falling prices in commercial real estate will lead to additional bank losses at a time when banks are sapped by home mortgage defaults and soaring credit card defaults. This could lead to future additional taxpayer assistance for the banks.
The reality is already on display. On April 16, the nation's second largest mall developer, General Growth Properties, filed for bankruptcy protection. The Chicago-based company owns more than 200 malls across the U.S., and was unable to renegotiate its debts as they came due.
Six days later, a 40-story office tower on New York's Avenue of the Americas was seized by its creditor, a Canadian-owned pension fund. The tower's owner, Macklowe Properties, couldn't meet loan terms.
"On the street, the rumor is it is coming and it's going to come fast and furious. Some people are predicting September," said Paul Waters, a New York-based executive vice president of brokerage operations in North America for NAI Global, a top-five commercial real estate brokerage with operations across the globe.
Just like the housing meltdown, the commercial real estate crunch is likely to begin as a slow bleed that gains momentum. The coming commercial real-estate crunch is likely to be spread evenly across the nation, in large part because of an outgoing economic tide that's spared few companies anywhere.
"There's going to be a lot of trouble on Main Street with some of these commercial and industrial buildings. The biggest impact will be on some of the smaller owners," Waters said. "The smaller local regional players that are stretched thin may have some great difficulties with their mortgages."
How bad it gets will depend on speed of economic recovery. Office space and multifamily apartments, two huge components of commercial real estate, are highly dependent on employment. Even if the economy begins growing again late this year as forecast, the number of unemployed is expected to keep rising well into next year.
"The translation is that office vacancy rates would continue to rise until mid-to late-2010," said Christopher Cornell, an economist specializing in commercial real estate for Moody's Economy.com, adding that "it's a drag on the recovery" well into next year.
The last crisis in commercial real estate — which includes office space, malls, industrial parks and multifamily apartments — came in the early 1990s. The problem then was an oversupply of new properties. Today, the driver is a deep economic downturn, with the economy contracting by more than 6 percent in each of the last two quarters.
As in the housing meltdown, weakened lending standards are a big part of the story for commercial real estate. Unlike housing, however, the ill effects from weakened commercial lending standards have been camouflaged to date because they've had a longer horizon than housing did over which to implode.
"If you take a look between 2005 and 2007, the underwriting standards on both the consumer side and the commercial side were spinning out of control," said Kevin Blakely, the president of the Risk Management Association, a Philadelphia-based trade group for financial risk managers. "I think it is a bigger issue than we like to admit."
In housing, many of the loans with poor underwriting went bad within two years, when adjustable-rate mortgages were due to reset to higher interest rates and raise monthly payment costs for homeowners.
However, commercial properties carry mortgages with lives of five years or 10 years. And these loans issued from 1999 to 2007 are coming up for a rollover — refinancing under similar terms. Today's economic downturn and credit crunch makes that unlikely, however, as credit standards have tightened.
As in housing, many commercial properties have mortgages that were bundled together in pools, sliced and diced and instead of being held by banks were sold to investors as bonds and securities. Thousands of these commercial mortgage-backed securities, or CMBS, are reaching their maturity dates over the next three years. Ten-year mortgages issued in 1999 and 2000 start coming due late this year, and five-year loans issued from 2005 to 2007 come due early next year.
"If you stop and think about what is coming up for maturity over the next couple of years, either on the banks' books or CMBS, there is going to be a day of reckoning as those loans mature and they have to be rebalanced and reset to today's underwriting standards," said Blakely, who worked 17 years as a bank regulator followed by 17 years as a bank executive and risk officer.
A March study by the Wall Street arm of Deutsche Bank, Germany's largest financial institution, points to this day of reckoning. It found that the number of U.S. commercial loans that hadn't refinanced within a month of their end date had tripled.
Refinancing usually happens months ahead of the end date. Since October, commercial refinancing has dropped from a pace of more than 400 mortgages a month to fewer than 100 a month, the bank said.
The report, entitled "Commercial Real Estate at the Precipice," said that under lenient underwriting standards, 56.8 percent of existing commercial mortgages wouldn't qualify for refinancing. Using conservative standards, two thirds won't make the grade.
That suggests that lenders will have to extend loans, much like they've tried to freeze adjustable-rate residential mortgages at their original lower rate to avoid a foreclosure. Even if the commercial loans are simply extended for a year or two, however, commercial real-estate prices are forecast to keep dropping so the time bomb will be delayed not defused, the report concluded.
"In our view, much of these losses are unavoidable, even in a mass (loan) extension environment," wrote Richard Parkus, the report's author.
Forecaster Moody's Economy.com expects $375 billion in losses on the $3.5 trillion in commercial mortgage loans and securities outstanding. That a loss rate of about 11 percent, nearly twice the rate of home mortgage foreclosures, and the forecaster thinks that about $200 billion of those commercial losses are still ahead.
"This is significant, but small compared to the over $1.1 trillion losses ultimately expected on residential mortgage loans and securities. Commercial mortgage losses will be a significant problem for many mid-sized and small banks," said Mark Zandi, the chief economist for Moody's Economy.com. "In fact, most of the banking failures that occur in the next several years will be due to losses on commercial mortgage loans."
Earlier this year, the Treasury Department and Federal Reserve announced a program in which they'll lend to investors willing to purchase the safest, top-rated commercial mortgage-backed securities. The Fed is trying to use its power as a lender of last resort to help keep some credit flowing into commercial real estate markets. This effort, however, is of limited importance because it targets the safest of commercial mortgages and won't address all that ails this important sector.
Additionally, pools of commercial mortgages are expected to be included in the auction of so-called toxic assets being readied by the Treasury Department through a public-private partnership.
Still, commercial real-estate brokers are bracing for protracted hard times.
"There will be a re-engineering of the culture of the real estate business," said Waters, the NAI Global executive, who expects few new development projects until the mortgage problem runs its course. "All the avenues to dispose (of bad commercial loans) are going to be utilized."
POE News
Pan Orient Energy Corp./NSE-H3 New Pool Oil Discovery: 840 bopd
On Wednesday May 27, 2009, 8:01 am EDT
CALGARY, ALBERTA--(Marketwire - May 27, 2009) - Pan Orient Energy Corp. (TSX VENTURE:POE - News) -
THAILAND
NSE-H3 New Pool Oil Discovery (60-per-cent working interest and operator)
Pan Orient Energy as operator of the L44/43 concession located onshore Thailand is pleased to announce that testing of the NSE-H3 well has confirmed the discovery of commercial hydrocarbons in a previously untested volcanic reservoir approximately 45 meters in thickness at 610 meters true vertical depth (TVD). The well is currently pumping through the annulus and free flowing through the casing, 32 degree API oil at a stabilized rate of 840 bopd and a water cut of less than 0.5%.
At year end 2008, there were no reserves of any category attributed to this shallow volcanic zone. Pressure data and the slightly lower gravity of the crude oil (32 API vs 36 API), confirms this is a distinctly separate pool from the underlying main volcanic reservoir at NSE.
NSE-H3 was designed to target the main volcanic reservoir of the NSE Central fault compartment. The proven main volcanic target zone was encountered at a depth of approximately 802 meters TVD and exhibited severe drilling fluid losses with free oil observed at surface. While conditioning the wellbore prior to logging and casing, it become evident the hole was collapsing. After repeated failures to reenter the well bore the decision was made to plug the well back with cement and test a much shallower volcanic at approximately 600 meters. Rock samples from the zone of interest exhibited open vesicular (vuggy) porosity and oil shows were observed over a 70 meter interval. No drilling fluid losses had been encountered while drilling through this interval, suggesting a conventional type of oil reservoir with primary porosity and possibly non fracture dominated permeability. The deeper main volcanic objective at NSE-H3 will be re-drilled at a later date.
A post NSE-H3 test review of NSE Central wells drilled previously is currently underway to estimate the reserve potential of this new zone discovery. Preliminary analysis indicates this same shallow volcanic zone has been encountered in eight other wells with thicknesses averaging approximately 50 meters. These wells were never tested in the shallow volcanic zone because they were completed as deeper, main volcanic zone producers. Additional wells targeting this new volcanic zone will be slotted into the 2009 drilling schedule on a priority basis.
Wells NSE-I1, an exploration/appraisal well in the NSE northern fault compartment and NSE-J1, a development well in the southern portion of the NSE central fault compartment, are currently drilling ahead just above their primary volcanic reservoir objectives.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Capstone Reports Exceptional Copper-Gold Grades at Minto North - Best Ever Drill Intercepts
On Tuesday May 12, 2009, 7:15 am EDT
http://finance.yahoo.com/news/Capstone-Reports-Exceptional-cnw-15212931.html/print
<< Hole 09SWC466 intercepts 10.8% Cu & 10.4g/t Au over 13.4m (including 15.0% Cu & 15.7g/t Au over 8.2m) Hole 09SWC475 intercepts 7.8% Cu & 3.0g/t Au over 23.9m (including 13.9% Cu & 1.8g/t Au over 7.1m) >>
VANCOUVER, May 12 /CNW/ - Capstone Mining Corporation (CS: TSX) today announced assay results from 15 additional exploration drillholes completed on the "Minto North" discovery at the Minto Mine. These most recent drill intercepts from Minto North, which is located approximately 600 metres north-northwest of the current open pit mining operation, returned the highest ever copper-gold intercepts in the history of the Minto property. Highlights of assays from these most recent drillholes are summarized in the table below and the full results for the fifteen holes released today are provided in the attached table.
Petrobank First Quarter Production Hits 43,856 BOEPD
On Tuesday May 12, 2009, 1:37 am EDT
http://finance.yahoo.com/news/Petrobank-First-Quarter-ccn-15211168.html/print
CALGARY, ALBERTA--(Marketwire - May 12, 2009) - Petrobank Energy and Resources Ltd. ("Petrobank" or the "Company") (TSX:PBG - News) is pleased to announce our first quarter 2009 financial and operating results.
(All references to $ are Canadian dollars unless otherwise noted)
HIGHLIGHTS
(all comparisons are to the first quarter of 2008)
- Petrobank's production almost doubled to 43,856 barrels of oil equivalent per day ("boepd") in the first quarter of 2009.
- Canadian Business Unit ("CBU") production increased 59% to 22,085 boepd.
- Latin American Business Unit ("LABU") production increased 152% to 21,771 barrels of oil per day ("bopd").
- Our Heavy Oil Business Unit ("HBU") produced 248 bopd in March and 256 bopd in April.
- Despite a sharp drop in world oil prices funds flow from operations increased by 1% to $125.2 million ($1.40 per diluted share). We recorded a net loss of $1.5 million ($0.02 per diluted share) in the first quarter compared to net income of $35.5 million ($0.40 per diluted share) in the same 2008 period.
- CBU production expenses improved 27% to $6.81/boe and LABU production expenses improved 32% to $7.40/bbl.
- CBU operating netbacks, excluding hedging gains of $5.31/boe, averaged $34.68/boe and LABU operating netbacks averaged $30.18/bbl in the first quarter.
- On April 27, 2009, Petrobank agreed to sell 9.9 million shares of our Petrominerales holdings for gross proceeds of $101.5 million. The transaction is expected to be completed on May 15, 2009, at which time Petrobank's ownership interest will be reduced to approximately 66.8%.
AGT - Grey Fox results.
The annual shareholders meeting for Apollo is here in Denver on Thursday. I was all set to go but had to change plans due to my day job. I expect the drilling results for Grey Fox to come out just prior to, or during the shareholder meeting. If the results don't come out at all this week, they might not be good.
If anyone is going to the meeting on Thursday it would be great if you could post the highlights here. In addition to hedging the CAD at $1.20 against the USD, they were also talking about a diesel hedge??? It would me nice to hear if they put that hedge on as well.
A sell off in gold this coming week or 2 could be a big gift!
Good Luck Guys!
Kipp
The pandemic I am worried about is the largest robbery of citizens in the history of the world. We US tax payers have watched the banks privitize gains while transfering losses and risk to us. The media is not doing their job, not digging into the facts and repoting them. The real pandemic is greed and its infection of Wall Street, Government, and the Media. I can't simply put a mask on, stay home, and avoid the affects of the greed pandemic. Greed and corruption explain a lot of what is going on. I think new world order conspiracy gives the greedy bastards way more credit than they deserve.
Kipp
bbotcs - We have come a long long way in both understanding and preventing pandemics. The third world seems more at risk than the developed nations. Too many people, living too close together, are asking for trouble.
All you need to do to stop the flu is not allow people to swap resperatory system fluids with each other. T.V., radio, the internet, all allow instant communication. The worst thing is the damage to the economy that will occur if everyone stays home.
On average 35-40,000 people die from flu every year.
roguedolphin - Swine flu looks to me like a big bust for dooms day enthusiasts. It looks like a big pork sale, cheap mexican vacation posibility, and a boon for surgical mask makers. It is too late in the season for a flu pandemic. This strain looks non fatal for most people that get it. School is out in weeks and the CDC and media are all over this. By the time Baxter makes a vaccine there won't be anyone infected to force a mandatory vaccination on.
Go out and buy some center cut chops, book a fishing trip to mexico, and relax.
Kipp
rougedolphin, I have 1 question:
When they intern us, vaccinate us, kill some of us, and the rest of us are not producing/spending...................who will be doing the spending, paying the taxes, etc.?????
Just curious as how anyone benefits from this scenario long term.
Kipp
Bobwins - GMK - Multibagger or Tortilla Flats???
I am in the absolute peak of the season with my day job and there's not much extra time to dig into fine details.
What I know is this food/grain/tortilla company was a steady grower for years and got up to $16/shr. The CFO decided to hedge the Peso against declines in the USD. The Peso immediately cratered and the USD shot up, nearly bankrupting the company. The stock sold off sub $1.00. Now they seem to be rebounding but i can't find any news. This may be worth a look to see if they have found a way out of the derivitives bet going south???
Look at this long term chart:
http://finance.yahoo.com/echarts?s=GMK#chart1:symbol=gmk;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
http://stockcharts.com/charts/gallery.html?s=gmk
http://stockcharts.com/h-sc/ui
Gruma, S.A.B. de C.V., through its subsidiaries, primarily engages in the manufacture and distribution of corn flour, tortillas, wheat flour, and other related products. It also engages in the production and distribution of grains primarily used for industrial and human consumption. The companys primary brands include MASECA, JUANA, TIA BERTA, and DECASA for corn flour; MISSION and GUERRERO for packaged tortillas; ROBIN HOOD and POLAR for wheat flour; MONICA for rice; and LASSIE for oats. In addition, it offers banking services, securities brokerage services, management of retirement funds, the purchase and sale of uncollected invoices and notes, rendering of general warehousing services, life insurance, and casualty insurance. The companys customers include supermarkets, mass merchandisers, smaller independent stores, restaurant chains, food service distributors, schools, hospitals, and the military. It has operations in Mexico, the United States, Central America, Venezuela, Europe, Asia, and Oceania. The company, formerly known as Gruma, S.A. de C.V., was founded in 1949 and is based in San Pedro Garza Garcia, Mexico.
From Yahoo Board Post:
GMK tanked on temporary strength in the dollar as foreigners wanting to liquidate U.S. based assets forced a major need for U.S. dollar purchases. However, this will be a temporary quirk and the U.S. dollar, at least in my opinion, will be headed back down big time in the next few months. If this scenario plays out (don't see how it can't when the Fed is now printing a few extra trillion to handle the economic meltdown), GMK's losses could turn into big gains as (at least as I understand it) their derivitive contract go out through 2010. This is risky but if my expectation comes true, GMK could easily be back in the mid-teens in the next 9-12 months. Good risk reward at these levels.
Thanks,
Kipp
BTO.TO - Any reason for high volume and volitility? It looks like someone needed out? I see no news or change in the story.
Kipp
China took yet another action little noticed in the American media, but with major long term implications. China finalized a deal with Argentina, arranging a $10.2bn currency swap of their respective currencies (70bn CNY/38bn ARS). While Michele Bachmann and the like were up in arms after Zhou Xiaochuan, Governor of the People’s Bank of China (PBoC), suggested that SDRs could potentially function as a new global reserve currency, this particular story appears to have garnered little attention from those paranoid of a “one world currency“. However, this development is of crucial strategic importance and should be recognized by US policymakers as a development that must be addressed, rather than proposing legislation that doesn’t even begin to make any sense.
The move will allow Argentineans to directly access Chinese Yuan for trade, rather than having to settle in US Dollars. Previously, as the USD has been the primary reserve currency for international trade, an importer would have to cross two “spreads”, first converting ARS to USD, and then the USD to CNY (just imagine having to go to the airport currency exchange twice just to buy a souvenir). The Argentine Central Bank is explaining the move as a “contingency plan to bolster liquidity amid the global financial crisis,” but this vague statement is better explained by Passport at Foreign Policy:"
New oil with zero trans fat could revolutionize frying
By Dan Piller, The Des Moines Register
What may be the next big thing in the quest for the perfect low-fat french fry will sprout from Iowa ground this summer.
Pioneer Hi-Bred says its genetically engineered soybean will make an oil that has no artery-clogging trans fats. The high-oleic oil is supposed to last three to five times longer in commercial fryers than most zero-trans-fat oils.
BETTER LIFE: Tests confirm fast-food fries are trans-fat free
WEIGHT-LOSS CHALLENGE: Fitness news, tips, video and more
BLOG SQUAD: Get dietitians' advice on what to eat
The Johnston, Iowa-based company, the second-largest producer of hybrid seeds for agriculture, will put the soybean through tests to determine whether those claims are true. If so, then McDonald's, Frito-Lay and other companies may snap up the oil and promote heart-healthy fried foods and chips.
The consequences for Americans' health could be significant.
"Zero-trans-fat oils are clearly healthier," says David Lemon, a Des Moines, cardiologist. "The American average diet contains 3% trans fats, and the percentage now recommended is 1% or less."
The U.S. Food and Drug Administration has required food processors to label foods by the amount of trans fat because medical researchers say trans fats promote bad cholesterol in the bloodstream. That can lead to heart disease.
"Any product that does the job translates into a gain for the population," Lemon says.
Iowa agriculture has a lot at stake in the oil wars, because the state is the nation's largest producer of soybeans.
Americans consume 31 billion pounds of oil a year. Up to 40% of that oil is hydrogenated, meaning high in trans fats.
The FDA has approved the high-oleic soybean. Pioneer hopes to get Department of Agriculture approval to begin selling the soybean to farmers this fall for planting next year.
Most soybean oils require the injection of hydrogen to maintain stability under high heat. Hydrogenation adds trans fats to the oil, however.
The exception is low-linolenic soybean oil, which was developed from research by Fehr and others. The reduction in linolenic acid, which causes the breakdown of the oil in heat, has produced an oil that can remain stable for two to three hours.
The high-oleic oil would take the next step. Oleic acids would block the development of destabilizing linolenic acids.
Boosters of high-oleic oil say it will remain stable three times to 10 times longer than the low-linolenic oils.
New oil with zero trans fat could revolutionize frying
By Dan Piller, The Des Moines Register
What may be the next big thing in the quest for the perfect low-fat french fry will sprout from Iowa ground this summer.
Pioneer Hi-Bred says its genetically engineered soybean will make an oil that has no artery-clogging trans fats. The high-oleic oil is supposed to last three to five times longer in commercial fryers than most zero-trans-fat oils.
BETTER LIFE: Tests confirm fast-food fries are trans-fat free
WEIGHT-LOSS CHALLENGE: Fitness news, tips, video and more
BLOG SQUAD: Get dietitians' advice on what to eat
The Johnston, Iowa-based company, the second-largest producer of hybrid seeds for agriculture, will put the soybean through tests to determine whether those claims are true. If so, then McDonald's, Frito-Lay and other companies may snap up the oil and promote heart-healthy fried foods and chips.
The consequences for Americans' health could be significant.
"Zero-trans-fat oils are clearly healthier," says David Lemon, a Des Moines, cardiologist. "The American average diet contains 3% trans fats, and the percentage now recommended is 1% or less."
The U.S. Food and Drug Administration has required food processors to label foods by the amount of trans fat because medical researchers say trans fats promote bad cholesterol in the bloodstream. That can lead to heart disease.
"Any product that does the job translates into a gain for the population," Lemon says.
Iowa agriculture has a lot at stake in the oil wars, because the state is the nation's largest producer of soybeans.
Americans consume 31 billion pounds of oil a year. Up to 40% of that oil is hydrogenated, meaning high in trans fats.
The FDA has approved the high-oleic soybean. Pioneer hopes to get Department of Agriculture approval to begin selling the soybean to farmers this fall for planting next year.
Most soybean oils require the injection of hydrogen to maintain stability under high heat. Hydrogenation adds trans fats to the oil, however.
The exception is low-linolenic soybean oil, which was developed from research by Fehr and others. The reduction in linolenic acid, which causes the breakdown of the oil in heat, has produced an oil that can remain stable for two to three hours.
The high-oleic oil would take the next step. Oleic acids would block the development of destabilizing linolenic acids.
Boosters of high-oleic oil say it will remain stable three times to 10 times longer than the low-linolenic oils.
Palladium - Who knows anything about this metal?
I just watched a 60 Minutes segment on cold fusion. It was dead and burried and now it is back again. Palladium is "THE" metal for the process.
I will do some digging when I have time. Any input is appreciated. If you can see the 60 minutes piece you will understand the interest.
Kipp
nsomniyak - devastated is a bit too strong "financially" as I don't see any way to lose a lot of money in Apollo, the gold is there. What will be devastating is if they disapoint "emotionally", probably because of the amount of dd I have invested in this speculative investment.
Fingers Crossed!
Kipp
bbotcs - Yes the western part is dry and windy with bluffs and hills. The eastern part gets more rain and has rolling hills. Lincoln is a nice place and has the University influence. You can buy a really nice little house for $80,000. If you go rural or small town you are talking $50,000.
bbotcs, I think Nebraska has a surplus and the state has its act together. Get the heck out of there! Houses are really cheap and you can have a massive garden. You gotta like the color red to live in "The Husker Nation"!
Kipp
Freedom to Fascism is playing on PBS channel 12 KBDI in Denver. This is very surprising to me. They are selling the CD's as part of their fund raiser. The guy just told any teachers watching to play it in their classes to spark debate.
I am all for debating the current system, especially the Federal Reserve, Treasury Dept., and wreckless ...no... no INSANE government spending, Tax Code and so on.
Kipp
AGT Presentation Link
Coinmaker,
Here is a link to the latest presentation from Apollo. You don't get the sound but if you read through the slides you will get a feel for the company and the Black Fox mine coming on line
http://www.apollogold.com/htmlpage/presentations/040309_q4confcall.pdf
Several key facts:
-Management knows how to mine and mill rock from their running of the Montana operation.
-They moved a working mill from another company on the cheap and hired the same guy to run it for them.
-New trucks and equipment
-Fully funded
-Grey Fox property 15 miles away has drilling results scheduled for release this month
I am very skeptical of start ups and have come to be this way from some serious disappointments in the past. I have looked at AGT everyway til Tuesday and can't find fault to this point. We are at the moment of truth and we will be rewarded, or devistated in a matter of weeks.
Let us know what you think after digging into Apollo yorself.
Good Luck,
Kipp
Bobwins, and everyone here - Copper
There could also be copper in "hidden" inventories that are not reported. Just like banks are hiding foreclosed properties so as not to tank the market. Capstone doing a secondary is another tip off to me. I feel that investing in copper today would be "late". I also agree that the Chinese will stop buying in an instant if they feel they are driving prices up.....can you say .....whip....saw!
On the other hand, gold at $850ish will present good opportunities. AGT is holding up in the move from $1000+ to maybe $840-$850. I have some cash and I can't decide if I should buy some physical metal or buy more stock.
Does anyone here have a place to buy coins that charges reasonable premiums? I have been going to "Rocky Mountain Coin" in Denver but they have been tapped out lately.
Kipp
Here is another bearish copper/China blip.
http://www.bloomberg.com/apps/news?pid=20601012&sid=afS8tJO_eUxY&refer=commodities
Copper Prices Drop in New York as China’s Economic Growth Slows
Share | Email | Print | A A A
By Millie Munshi
April 16 (Bloomberg) -- Copper prices fell the most in a week after a report showed the economy in China, the biggest metal user, expanded at the slowest pace in almost 10 years last quarter, eroding speculation that demand will rebound.
China’s gross domestic product grew 6.1 percent in the first quarter from a year earlier, government data show. That trailed forecasts by economists and is the weakest pace since the fourth quarter of 1999. Before today, copper surged 57 percent this year on speculation that government spending would spur use of the metal.
“The Chinese data disappointed,” Alex Heath, the head of industrial-metals trading at RBC Capital Markets in London, said in a report. The figures were “not the kind of picture that should support further price gains on the metals.”
Copper futures for July delivery fell 3.85 cents, or 1.7 percent, to $2.1705 a pound at 11:12 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest one-day drop since April 6. The most-active contract surged 3.8 percent yesterday as inventories declined.
The metal extended losses after a report showed U.S. builders broke ground on fewer homes in March and permits fell to a record low. Builders are the biggest users of the metal, putting about 400 pounds (181 kilograms) into the average U.S. home.
“The housing data has taken a lot of the wind out of the sails for copper,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “Housing is clearly not out of the woods yet and that’s going to take a toll on copper demand.”
Housing Starts Fall
Housing starts fell 10.8 percent to an annual rate of 510,000, the Commerce Department said today in Washington. Building permits, a sign of future construction, fell 9 percent to 513,000. Copper tumbled 54 percent in 2008 as slumps in housing and manufacturing coupled with mounting job losses slashed demand for the metal.
Lower inventories may limit the decline in copper, analysts at Barclays Capital in London said today in a report.
Inventories monitored by the London Metal Exchange dropped 1.1 percent to 475,200 metric tons today. Supplies have fallen for four straight sessions, the longest string of declines in a month, and are down 13 percent from a four year high on Feb. 25.
On the LME, copper for delivery in three months dropped $79, or 1.6 percent, to $4,740 a ton ($2.15 a pound). The price reached a record $8,940 on July 2.
To contact the reporter on this story: Millie Munshi
Copper/China story. Please read this and comment.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html
Kipp
China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.
Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.
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China's jobless migrant workers hits 23m"China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."
"The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources," he said.
The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters) and praseodymium (glass).
While it makes sense for China to take advantage of last year's commodity crash to restock cheaply, there is clearly more behind the move. "They are definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank.
John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. "We're very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China's pockets are deep."
Zhou Xiaochuan, the central bank governor, piqued the interest of metal buffs last month by calling for a world currency modelled on the "Bancor", floated by John Maynard Keynes at Bretton Woods in 1944.
The Bancor was to be anchored on 30 commodities - a broader base than the Gold Standard, which had caused so much grief in the 1930s. Mr Zhou said such a currency would prevent the sort of "credit-based" excess that has brought the global finance to its knees.
If his thoughts reflect Communist Party thinking, it would explain the bizarre moves in commodity markets over recent weeks. Copper prices have surged 49pc this year to $4,925 a tonne despite estimates by the CRU copper group that world demand will fall 15pc to 20pc this year as construction wilts.
Analysts say "short covering" by funds betting on price falls has played a role. But the jump is largely due to Chinese imports, which reached a record 329,000 tonnes in February, and a further 375,000 tonnes in March. Chinese industrial demand cannot explain this. China has been badly hit by global recession. Its exports - almost half GDP - fell 17pc in March.
While Beijing's fiscal stimulus package and credit expansion has helped lift demand, China faces a property downturn of its own. One government adviser warned this week that house prices could fall 50pc.
One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America's debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. "We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets," he said.
This is slightly disingenuous. China has the world's largest reserves - $1.95 trillion, mostly in dollars - because it has been holding down the yuan to boost exports. This mercantilist strategy has reached its limits.
The beauty of recycling China's surplus into metals instead of US bonds is that it kills so many birds with one stone: it stops the yuan rising, without provoking complaints of currency manipulation by Washington; metals are easily stored in warehouses, unlike oil; the holdings are likely to rise in value over time since the earth's crust is gradually depleting its accessible ores. Above all, such a policy safeguards China's industrial revolution, while the West may one day face a supply crisis.
Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1pc, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a "Copper Standard" as a "Gold Standard".
Listening to this taped recording is beyond disturbing.
http://washingtontimes.com/news/2009/apr/06/tsa-detains-official-from-ron-paul-group/
This is TSA gone wild!
FINALLY! Barron's, a major "credible" media outlet is printing the truth. The media is asleep at the wheel on this crisis. The American tax payer has been like a sheep going to slaughter!
I have never gone to a political protest in my life. I have decided to go to the "Tea Party" on the steps of the Colorado State Capital on the 15th.
The worst thing about all of this is how far down the wrong road we have already gone. Trillions will be wasted before we get any real change. The corruption in the system is so entrenched that it will take years to root out. The economy will be brought to its knees before any reel change will take place. Government, Media, Bankers, Regulators..................all of them are in on this fraud.
Since William Black did a PBS interview with Bill Moyers last week, I have been doing a Google News search to see who has been covering the story. Not a single major network has picked up the story:
http://news.google.com/news?pz=1&ned=us&hl=en&q=William+Black
Maybe this Barron's story will take the main stream media to task. I doubt it, but I "hope" they start investigating the truth.
Kipp
I wonder if those are the same economists that predicted these numbers????
Federal budget deficit sets March record $192.3B
Federal deficit hits March record $192.3 billion; near $1 trillion halfway through budget year
Martin Crutsinger, AP Economics Writer
Friday April 10, 2009, 3:25 pm EDT
WASHINGTON (AP) -- The Treasury Department said Friday that the budget deficit increased by $192.3 billion in March, and is near $1 trillion just halfway through the budget year, as costs of the financial bailout and recession mount.
Last month's deficit, a record for March, was significantly higher than the $150 billion that economists expected.
The deficit already totals $956.8 billion for the first six months of the budget year, also a record for that period. The Obama administration projects the deficit for the entire year will hit $1.75 trillion.
A deficit at that level would nearly quadruple the previous annual record of $454.8 billion set last year. The March deficit was nearly four times the size of the imbalance in the same month last year.
Nearly $300 billion provided to the nation's banks and other companies to cope with the most severe financial crisis in seven decades has pushed government spending higher.
The Treasury report said that through the end of March, $293.4 billion had been provided to support companies through the $700 billion bailout fund Congress passed last October. That support has been provided primarily to banks, although insurance giant American International Group Inc. and auto companies General Motors Corp. and Chrysler LLC also have received assistance.
Besides the bailout fund, Fannie Mae and Freddie Mac received $46 billion last month, bringing the total assistance provided to the mortgage finance companies to $59.8 billion since October. The government took control of both last September after they had suffered billions of dollars in losses on mortgage loans.
Through the first six months of the budget year that began Oct. 1, tax revenues have totaled $989.8 billion, down 13.6 percent from the year-ago period. The government's receipts have been reduced sharply by the recession, which is shaping up to be the longest of the post World War II period. The downturn began in December 2007.
Government outlays totaled $1.95 trillion through March, 33.4 percent higher than the year-ago period. Besides higher payments for the financial rescue, the government is paying more in such areas as unemployment benefits and food stamps.
The Treasury report showed benefit payments from the unemployment trust fund totaled $44.6 billion so far this budget year, up from $19.4 billion last year.
The Congressional Budget Office estimated last month that President Barack Obama's budget proposals would produce $9.3 trillion in deficits over the next decade, a figure $2.3 trillion higher than estimates made in February in the administration's first budget proposal.
The CBO review projected Obama's budget would generate deficits averaging almost $1 trillion annually over the decade ending in 2019.
The administration said it remained confident its forecasts for declining deficits over that same period could be achieved. But private economists have faulted those estimates for relying on economic assumptions they believe are too optimistic.
The administration projects that after hitting $1.75 trillion this year, the gap between spending and tax revenues will dip to $1.17 trillion in 2010, and plunge to $533 billion in 2013. If accurate, that would fulfill Obama's pledge to cut the deficit he inherited in half by the end of his current term in office.
Some economists have expressed concerns that the massive deficits being forecast could push interest rates up sharply, especially if foreign investors worry about the size of the U.S. deficit projections.
Lawrence Summers, director of Obama's National Economic Council, said Thursday there have been no indications that investors are growing worried about the size of the deficits. On the contrary, he said yields on Treasury securities have been pushed lower by increased demand from investors seeking to hold Treasury bonds as a safe haven in uncertain economic times.
nuts, I appreciate your take. I am not so optimistic medium term. These headlines are too hard for me to set aside and think the markets will zoom ahead with inflation in check and willing buyers to take on trillions of US debt. Read this article from today:
http://finance.yahoo.com/news/Federal-budget-deficit-sets-apf-14901586.html?sec=topStories&pos=main&asset=TBD&ccode=TBD
Our goverment acts like a shopaholic that has been given 10 brand new credit cards with no spending limit! This is getting insain! I do not see how paper currency is going to hold value and I feel inflation and higher interest rates are on the not too distant horizon. The US needs to sell over $50 billion in treasury notes EVERY WEEK! It is clear if we have no buyers we will buy and sell them to ourselves.
I am only 43 years old so I wasn't old enough to understand the 70's. I was a teen in '82 and I remember how hard it was to get my dishwashing job for minimum wage.
I am heavier in cash, precious metals, and some energy. I may be one of the wall of worry guys that will get climbed over and left behind.........but I am sleeping at night.
Good to have you back. AGT and BTO.TO are my largest holdings at the moment.
Kipp
nuts - It's good to have you back! What is your take on the macro economy, inflation, etc?
Kipp
BTO.TO - POP!
Nice pop in BTO.TO! Here is an interesting chart of BTO.TO, AGT, and GLD. There is a lot of ground to make up!
http://finance.yahoo.com/echarts?s=AGT#chart2:symbol=agt;range=1y;compare=bto.to+gld;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Kipp
Oil Forecast - This seems reasonable to me.
(Sorry for the poor reproduction of the original format. Kipp)
April 6, 2009
Pengrowth Spring Conference - notes
Henry Groppe -
1)
Henry:
o
Has 55 years of experience in oil.
o
Clients include some of the largest oil & gas, chemical, financial and governments of the world.
o
Uncanny record of accurate long term forecasting.
o
Turned bullish at the beginning of 2009
o
See last year’s notes for Groppe’s presciently bearish tone.
2)
Groppe fundamentally disagrees with many of his peers (Matt Simmons, Boone Pickens, Goldman Sachs et al) who believe that demand will continue its relentless upward march. Groppe asserts the new paradigm is declining production and consumption; the only question is “what is the clearing price” to balance the supply/demand equation?
3)
We have just lived through a century of cheap oil. The mindset of the USA is that cheap oil is their God-given right. Cheap oil shapes USA’s economic and military dominance. Until US society views oil as a valuable resource it will continue paying $1/2 Trillion per annum for imported oil.
4)
Currently OECD countries use oil as follows:
o
51% transport
o
27% Industrial (what Groppe calls “BTU Only”)
o
12% raw materials
o
10% Heating Oil
Groppe believes that, going forward, more and more oil will be “preserved” for its highest and best use, that of transportation.
“BTU Only” needs will be supplied by coal, natural gas, etc.
Note: China’s use of oil is more wasteful than OECD countries. Only 1/3rd of China’s consumption is for transportation and the balance is industrial use.
5)
Depletion is relentless. If demand does NOT increase, the world needs to add 5 to 6 million barrels per day every year or the equivalent of a new Saudi Arabia every two years!
6)
All the big targets have been found.
7)
4.5 years ago OPEC reached its capacity.
8)
Oil is the biggest business in the world, comprising 9% of global GDP. We are at a crossroad where, for the first time in history, the industry will begin to decline. It is the output constraint that leads Groppe to conclude that “the energy sector is the most attractive investment sector for the foreseeable future”. Henry, not one prone to hyperbole said this at least twice during his speech.
9)
70% of non-Opec oil is produced by 7 countries (USA, Canada, Mexico, Russia, Norway, the UK and China). 6 of 7 of those countries are in production decline. Canada (due to oil sands) is the only growing producer.
o
Within 5 or 6 years, Mexico will be a net importer of oil, causing a major political problem. Mexico’s Cantarell field was the second largest producing field in the world but is now declining at 15% per annum.
10)
Oil price will range between $65 and $100 for the foreseeable future. There will be significant volatility because the industry is effectively producing at capacity. With little “slack” in the system, small blips create big pricing issues both positively and negatively.
11)
Henry is unsure whether oil production peaked in 2006 or whether there will be one last spurt, making 2010 the peak year.
12)
The Department of Energy (“DOE”) and Exxon have recently backed off of their forecast of limitless production growth; saying they are “no longer certain” production can grow. Groppe is NOT a fan of the DOE because they simply extrapolate future production using “trend-line” analysis.
13)
Saudi Arabia is the only producer in the world with excess capacity. It can produce up to 12.5 million bbls/day in the short term and 11.5 mm/bbls/day in the long term.
14)
Why did oil go from $30 to $147 and back again??
o
Based upon expert advice, OPEC believed that non-OPEC production was going to grow by 1.5 million barrels in 2007
o
OPEC therefore cut production by 1.5 million bbls in 2007.
o
The 2007/08 winter was very cold.
o
Price started to run up.
o
OPEC saw that the forecast non-OPEC production increase was NOT materializing so it increased its production by 2 million bbls. However, you can’t turn on the spigots overnight so prices continued to run higher.
o
At around $120/bbl the hedge funds took over the momentum play and took it up to $147.
o
The production increases materialized as the financial crisis hammered the world’s economies; the increasing supply in the face of falling demand caused prices to collapse.
15)
Why do oil prices have to double off their February lows?
o
THE SAUDI’S ARE MAKING THE SAME MISTAKE AGAIN, LISTENING TO THE EXPERTS.
o
OPEC (lead by the Saudi’s) has cut 4.2 million bbls/day of production since autumn 2008.
o
Demand has NOT fallen as much as expected (Jim Kinnear, Pengrowth’s CEO, stated that gas consumption in the US is the same today as a year ago).
o
The supply/demand imbalance being created will necessitate $85-$90 oil to change people’s habits again.
16)
Some rough numbers:
o
Production cuts of 4 million bbls. Groppe thinks OPEC production INCREASES during 2009 will mean an average drop in production of only 2 million bbls/day for all of 2009.
o
Increased demand due to falling price is 4 million bbls. (Groppe uses an elasticity of +0.1 {a 50% drop in price yields a 5% increase in demand}. The price drop from $100 (average price for 2008) to under $50 causes a 5% increase in demand or 4 million bbls (5% x 80 million bbls = 4 million bbls).
o
The shortage is 6 million bbls.
o
The recession reduces demand at THREE TIMES the rate of the oil price change. The elasticity of oil demand to GDP is -0.3 so a 5% drop in GDP translates into a 1.2 million bbls/day (80 million x 5% x -0.3) drop in demand.
o
The NET SHORTAGE is 4.8 million bbls/day. As in 2008, the quickest changing variable to a supply/demand imbalance is price; it must go up.
17)
The commodity collapse has provided the world with $3 trillion of stimulus; $1.5 trillion via oil, $1.5 trillion via other commodities. This equals 6% of global GDP and dwarfs government efforts to bail out economies.
18)
Natural Gas:
o
Best cure for low prices is low prices so we are currently in the correcting phase and from now through 2010 prices will range between $7 and $10/mcf.
o
With 25% annual declines (45% first year declines on new wells), it will not take long to correct back to $7 to $10 range. A price of $6.50 to $7.00 should be the longer term floor price.
o
An OPEC in gas would to prevent the boom bust cycles;
Gas producers can become VERY irrational on their own.
Groppe has seen sales as low as 30 cents/mcf in recent years.
Producers don’t have the self control to cut production; only low prices force them to curtail development.
o
Tight gas peak production will occur within 3 to 4 years.
o
Shale gas peak production will be within 5 to 7 years.
Everyone thinks shale gas is new; it isn’t. Mitchell Energy was producing from the Barnett Shale play for 45 years before Devon bought Mitchell.
Big operators are saying production in the Barnett could peak this year.
Other big shale plays have similar stories; Groppe is not as bullish as the “consensus” about future production from these fields.
o
LNG gas production will peak in ten years. However, the US will see much less LNG than expected a few years ago. Why? Because other markets are closer to the production source so netbacks will be higher than if selling to the USA.
o
Drilling activity has dropped a lot;
Rig count down from about 2,000 to 1,045 for vertical wells.
Horizontal drilling was holding up well, until recently. Rig count was stable at around 400 rigs but that has fallen to around 370. Note that one horizontal well equates to about 15 vertical wells.
19)
Oil Sands
o
When times are good and oil is cheap Oil Sands are an environmentalist’s dream.
o
When oil is pricey, Oil Sands are a geopolitically secure source of energy.
o
If you accept Groppe’s views, Oil Sands have a very bright future.
nutsaboutgolf - Are you out there? Anyone know where nuts is? Have not heard from him for a month. I miss his input here!
Kipp
I am sitting with my BTO.TO and AGT. I have not sold any, only added to what are now both big (probably too big) positions. I have convictions that gold will rocket higher soon. It looks to me like all of the worlds governments are going to print fiat paper to infinity and beyond. A competitive de-valuation of currencies will develop compounding inflation. These 2 companies remind me of "Minefinders" when it was trying to get into production, It has gone from $2.50 to $8.00 leaving a lot of wimpy bag holders at the bottom of the "V". My fate is now in the hands of a bunch of rough and tuff rock crushers, lucky for me, they are really good at it!
Jr. oil stocks are my next target as oil comes back to look over the cliff at $40ish a barrel.
Good Luck Guys!
Kipp
Could PXX be raising funds to purchase the TXCO tar sands assets. This would explain some of the TXCO move???
This would give TXCO cash to continue operating.
??????????????????????????? Thinking out loud.
Kipp