Wednesday, March 18, 2009

Commodity of the future - Lithium? CLQ.v, WLC.v, MCI.v, TNR.v and more!?

Seems like junior miner TNR Gold Corp has been making alot of waves lately - getting on front page of retail investor central Stockhouse yesterday with their big announcement - acquisition of Lithium projects in ... Canada.

Hopefully that should mean alot more easier financing (read: flow through!) in this climate - lithium has been mentioned under people's breaths the last few months - even the likes of Warren Buffet, Doug Casey, and various writers have jumped on board.

As far as my limited market knowledge has told me, there's only 3 other TSX juniors that's announced lithium property acquisitions recently... let's compare some success factors that determine if a company makes a run or not!

1) Property Merit
2) Leadership
3) Network, other JV's, other companies involved?

Let's compare quickly.
TNR Gold Corp
Other than properties in Argentina and Alaska, seems like junir miner TNR has expanded into the wave of exciting green energy plays - lithium!
Management and leadership: Gary Schellenberg - quick Google reveals he is well known around industry. Bought out by De Beers in one previous deal Winspear Resources for $300+ million. Possibly other successes, but that's not a bad track record to have!
Also runs Coast Mountain Geological - group that consults for TSX miners around Vancouver, Bravo Ventures Group (BVG), Serengeti Resources (SIR), Barrick, NewCrest, and more (check CMG site) - very similar to Equity Engineering, SGS Lakefield, etc.

Bio here: Mr. Schellenberg has been managing and financing public and private resource based companies for the past 20 years. This experience provides the Company with leadership and well defined corporate goals.
Looks like he is a geologist with B.Sc. Geo background - reassuring thought that it's not some broker who cannot tell rock formation from non-sense that geologist is telling you! Good to see few of his clients have done quite well last few years especially Bravo! Fund manager John Lee from Mau Capital was very bullish on Serengeti (SIR.v) awhile ago as well.
Other properties? 2 Lithium properties in Ontario - famous for pegmatite and rare earth elements area. Sounds like some historic drilling had good grades, very promising. Would've been nicer with resource but it's a great start!
Los Azules - OH MY! This is quite the interesting project...Minera Andes 43-101 resource 11.2 billion pounds copper + 23 year mine life @ $0.85/lb production cost!!
Shotgun - 1 million ounces of gold
El Salto - large porphyry copper system in San Juan w/ perfect infrastructures!
El Tapau - Good copper grades 0.5% not to mention 1g/t grade Gold!
Batidero - Tenke / Paul Connibear / Lundin Group
Iliamna - next Pebble? - BHP Billiton transferred to TNR (always nice to get properties from majors!) --> lotsa point on network and

Suffice to say - we like the company. Competent management, good network, lots of institutional investors and big financial backers.

Mountain Capital (MCI.v)
In a hierarchy of legitimacy - MCI takes last place, easily. Their webpage does not even have any map or much details so far --> says Alberta Research Council indicated 2.8 billion lbs of Lithium?? New page seems to be up finally - at least there's a bit more property details and management info! Thin team and running low on cash...$200K and

We found out about the project through spam-blast from infamous Vancouver tech-guru Mr. R. Szeto's KREW Communications IR e-mail-blast-follow-up-call firm. . Not surprisingly the lack of news fell short and the pump is gone shortly after few weeks ago. It's now flat back to high single digits. Will it come back up with more oooomph next round of boiler room?

First the layoff of directors late 2008 ---> next repricing of 700,000 options to $0.05.
Next comes hiring of promo firm PaRaDox from Quebec... sounds very typical of an overly-promotional TSX firms. This is one strike.

Who's at helm - Blair Naughty - largely unknown name in junior mining it seems - quick Google test doesn't come up with much - from profile sounds like another broker-turned-opportunity-miner? I don't claim to be a geologist but I imagine things sell easier than the management group at least has a Geo degree or a P.Geo on hand?

Other properties of merit - Worst yet, other property was...Potash. Did someone miss the Raytec and fertilizer pump of 2008 summer? Seems like they have dropped those projects already, when will they drop lithium? No other mentions of their past BC Gold property - this group seems to treat lithium like a fad more than anything else ---> PASS!!

Canada Lithium (CLQ)

Formerly Black Pearl Mining - what happened there? Name change, dump rest of properties and promote new commodity for 2009?

Who's at helm CEO - Judy Baker
"Judy Baker, MBA has been President of Canada Lithium Corp. since September 27, 2007. Ms. Baker has fourteen years of experience in the mining and mineral exploration sector including equity analysis, fund management, exploration services and mining company experience. He served as Vice President, Business Development & Investor Relations of Nevsun Resources Ltd. Ms. Baker served as President of Southeast Asia Mining Corp. from February 5, 2008 to May 25, 2008 and served as its Consultant. Her prior experience includes Institutional Sales, Toll Cross Securities, Toronto, North American Business Manager, Quantec Geoscience, Toronto, and Resource Analyst, US Global Investors, San Antonio, Texas. She has been a Director of Canada Lithium Corp. since September 27, 2007 and Absolut Resources Corp. since June 26, 2006. Ms. Baker has an MBA from University of Western Ontario, and an Honours B.Sc. in Geological Engineering, Mineral Resources Exploration from Queen's University."
It's difficult finding fault on the academic excellence and history of this group's leadership, Ivey's a great school and seems like she went to a top engineering school for Exploration Geology. Curiously seems like she's done more analytical jobs like CFA's instead of field exploration work. Regardless I'm sure having been through so many different aspects of the business (buy/sell/exploration/brokerage) she might have a decent network of contacts.

Let's move onto the news flow and properties...Quebec Lithium previous operating mine..

Quebec Lithium is a system of underground spodumene-rich dikes. The mine
was operated under the former Quebec Lithium Corporation as an underground
mine, surface concentration plant and refinery from 1955 to 1965, to produce
ceramic grade and chemical grade spodumene concentrates, lithium carbonate, lithium hydroxide monohydrate as well as a small quantity of lithium chloride and
feldspar. When mining operations were suspended, the proven ore reserve was stated to
be 15,612,300 tonnes at a grade of 1.14% Li2O calculated down to the 150 metre level in the proven, probable and possible categories. The reserve was
calculated using an 85% recovery rate and a 7% dilution factor. Over a period of
10 years of operation, the ore hoisted from underground works averaged a grade
of 1.25% of LiO2 against the composed 1.13%, derived from geological sections"
*Historical Reserves

Lets' be honest here, that property sounds reasonable! BLK's Other property includes a gold deposit @ Tully with 43-101 report. No major joint ventures and major investor group from sounds of it. I'd say this company sounds decent - if claims hold true and they could begin production? Note however it did take 10 years for them to define resource @ Tully... need a faster acting group!


Western Lithium Corp (WLC)

A shell spin out from Western Uranium - this is the highest share price of the group at $0.55+.

Lotsa cash at $5 million, let's take a look at management.

Mr. Chmelauskas was most recently President and CEO of Jinshan Gold Mines, Inc. In this position he successfully managed and led the company during all phases of the commissioning of one of China’s largest open pit gold mines. In addition to his considerable experience in the exploration, development, and mining industry, Jay has held key positions with companies in the chemical manufacturing industry, including Lead Analyst with Methanex Corporation where he was involved with a $250 million chemical plant expansion in Chile. His experience in both the chemical and mining industries is well suited to lead Western Lithium forward during the near term phases of development, product marketing and production.

Mr. Chmelauskas has a Bachelor of Applied Science in Geological Engineering, University of British Columbia and a Master of Business Administration, Queen’s University.

Jinshan has done a great job with properties in China - but I find it funny that Mr. Chmelauskas left Jinshan in the terrible month of October 2008. I guess leaving a company at its lowest stock price in years is an acceptable thing to do, provided it's better for your career to jump ship?

Optics are terrible about the timing, that's for sure! Will he leave Western Lithium if the money runs out??
Property at question - Chevron Resources began exploration for uranium in Nevada in the McDermitt Caldera area in 1975. In September 1977, the U.S. Geological Survey alerted Chevron to the presence of anomalous concentrations of lithium associated with volcaniclastic moat sediments within the caldera. Based on the information from the USGS, Chevron analyzed drill cuttings from rotary percussion drill holes drilled in 1977 in the moat sediments for lithium. One hundred and forty feet of hole number MJB-7-4 averaged 0.278% Li; eighty five feet of MJB-7-5 averaged 0.236% Li. These results confirmed the presence of significant lithium hosted by a massive, green claystone within the moat sediment section.

Reasonable sounding property - not that spectacular of result, however! Seems like they dropped all their other plays too? I'd put this slightly behind Canada Lithium. I have to say though the cash reserve is attractive!!


Monday, March 16, 2009

Recessino to end in 2009!, WLC.v

Helicopter Mr. Bernanke comes through for the market - 5 days of rally on the DOW/US markets - was the story all of last week, can it last? Would this end the commodity boom as we know it?

Of course not! If anything a slight recover will only make people realize that more money should be needed to access basic raw materials!

Depression Fears Subside on Bernanke Remarks, Rally in Stocks

March 16 (Bloomberg) -- The longest winning streak in U.S. stocks since November and reassuring comments from Federal Reserve Chairman Ben S. Bernanke are soothing concern that the U.S. is headed for its first depression in seven decades.

“The financial meltdown and accompanying depression scenario has been taken off the table,” said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees $60 billion. “The heart of the problem is the banking system, and news coming out of that sector suggests that we may have turned a corner.”

Banks from Citigroup Inc. and Bank of America Corp. to Barclays Plc indicated in the past week that earnings have been rising since the start of the year, and government data showed U.S. retail sales may be stabilizing after a six-month rout. With officials working on details of their bank-rescue plan, Bernanke said in an interview with CBS television’s 60 Minutes that the main risk is a shortage of political will to complete the task.

It will likely take some time before the worst is past for the U.S. job market, and bank losses on investments including commercial property and leveraged loans are still likely to rise, analysts said. Bernanke said last week it’s “well within the realm of possibility” that the unemployment rate will exceed 10 percent, a level unseen since 1983.

The Treasury this week intends to provide more information about a $1 trillion plan to remove distressed mortgage assets from banks’ balance sheets. The Fed also is scheduled this week to start the first phase of a $1 trillion program to revive the market for securities backed by consumer and business loans.

‘Mind Boggling’

Combining those two initiatives with the $787 billion fiscal stimulus, the magnitude of U.S. monetary and fiscal actions and their likely effects as they ripple through the economy are “mind-boggling,” said Gabriel Borenstein, managing director of global fixed income in New York at Jesup & Lamont Securities, a brokerage and investment banking firm.

The efforts “will not fail,” predicted Borenstein, who in June 2005 correctly forecast a “serious recession” ahead. “If that doesn’t work we’re going to turn into the Gobi Desert,” Borenstein said today.

The Standard & Poor’s 500 Stock Index gained 1.5 percent to 767.87 as of 12:23 p.m. in New York, boosting its advance over five trading days to 13.5 percent. The index hasn’t risen for five straight sessions since November.

Recession End

Bernanke reiterated in the interview that, should the government succeed in calming financial markets, the recession will probably end this year and the economy will expand in 2010. “Green shoots” are appearing in some markets aided by the Fed, and there has been “some improvement” in banks, he said.

The S&P Financials Index has soared 41 percent in six sessions as sentiment shifted on the outlook for the industry. At the same time, Fed officials have repeatedly voiced concern this year that losses will increase as commercial-property values decline.

Borrowers unable to pay their debts are also causing record losses for so-called collateralized loan obligations, a type of debt that packages loans that are below investment grade and slices them into securities of varying risk and return.

The S&P/LSTA U.S. Leveraged Loan 100 Index fell to 62.1 cents on the dollar at the end of last week from 100.3 cents in June 2007. The decline contributed to the $1.2 trillion of losses and writedowns by global financial institutions since the start of 2007.

‘Some Patience’

“Recovery is not going to happen until the financial markets and the banks are stabilized,” and the government’s plan is “going to take some patience. It’s going to take some support,” Bernanke said.

Bernanke’s comments signal he is prepared for criticism from lawmakers over any request for more aid to beleaguered financial companies, including additions to the $700 billion Troubled Asset Relief Program. Treasury Secretary Timothy Geithner said this month the U.S. bank-rescue plan may need another infusion of taxpayer money.

Senator Jim Bunning, a Kentucky Republican, voiced the skepticism of some lawmakers by telling Fed Vice Chairman Donald Kohn at a March 5 hearing that should regulators request “more money for more banks and more corporations” they “will get the biggest ‘No.’”

Bernanke said the October law creating the TARP prevented a possible “global financial meltdown” and that he told a skeptical congressman at the time that businesses in his district would begin suffering losses without decisive congressional action. He didn’t identify the lawmaker.

“We’ve averted” the risk of a depression, Bernanke said. “Now the problem is to get the thing working properly again.”


Minera Andes had a nice jump today - then again who wouldn't after paying off $17 million dollars worth of loans on Mr. Goldcorp's private placement fund?


Minera Andes Inc. has repaid in full the corporation's indebtedness to Macquarie Bank Ltd. of Australia. The total indebtedness was $17.5-million (U.S.), which consisted of a loan of $7.5-million (U.S.) due on or about March 7, 2009, and a loan of $10-million (U.S.) due in September, 2009. The corporation no longer has any bank debt.

With the repayment of the indebtedness to Macquarie and the payment of $11.3-million to satisfy the cash call made in respect of the corporation's 49-per-cent interest in the producing San Jose gold/silver mine operated by Minera Santa Cruz SA, the corporation has met its current financial obligations.

As previously reported in Stockwatch on Jan. 16, 2009, San Jose is forecast to produce approximately 7.5 million ounces of silver and 95,000 ounces of gold in 2009.

Allen V. Ambrose, president and chief executive officer of Minera Andes, said: "We are pleased to report that, with the completion of the private placements of $40-million from Rob McEwen, we have paid off our bank debt and cleaned up our balance sheet. With the company's financial condition improved, management will be able to focus on increasing shareholder value by increasing its exploration drilling activities on its high-potential 100-per-cent-owned prospects in the San Cruz province of southern Argentina."

The moneys for the payment of the cash call and repayment of the indebtedness to Macquarie were obtained by private placements with Mr. McEwen, a director of Minera Andes and the company's largest shareholder. Mr. McEwen purchased 40 million shares of Minera Andes for $40-million ($1 per share). The details of the private placements with Mr. McEwen have been the subject of previous Minera Andes news releases reported in Stockwatch on Feb. 9, 2006, Feb. 18, 2009, Feb. 19, 2009, Feb. 25, 2009, and Feb. 26, 2009.

Thursday, March 5, 2009

Here are some trading ideas... Gold, TNR, MAI, WCL, Lithium, Green Energy, Uranium...

Fresh off the plane from a quick round at PDAC - I immediately knew what the investing world is going to look like in 2009 - resources & resources.

Keep in mind this is one of the world's largest gathering of resource/mining companies in the world - Rio Tinto, Goldcorp, Yamana, TECK Cominco, VALE, Inco, you name it - they will have a presence there.

Companies filled to the brim with cash and trading below cash values are all hunting for deals and properties with reserves - people were open minded about so-called pounds-in-the-ground. 

The cash we all know and currency system is rapidly failing us and the smart miners are once again ahead of the curve.

Let's take a quick glance at Gold today (see above) - up $30/ounce. Reason? Very simple: GM below $2 and bankrupcy fears - and Citibank is in danger of being delisted from NYSE - it dropped below $1 today. 

Stocks tumble as investors worry about banks, GM

Stocks resume steep slide as brief optimism fades amid lack of positive news

NEW YORK (AP) -- Investors fled Wall Street as fear grew about the stability of the nation's largest banks and worries mounted about General Motors Corp.

The major market indicators resumed their slide Thursday after a one-day rally, falling to levels not seen in more than a decade as investors contended with more disheartening economic data, new concerns about the stability of GM and ongoing uncertainty about the financial system. The Dow Jones industrial average fell more than 250 points, and the big indexes were all down more than 3 percent.

Stocks fell across the board, with the beleaguere banking sector posting some of the steepest losses. Shares of Citigroup Inc., still shaky despite receiving billions in government aid, at times sank below $1. General Motors, meanwhile, dropped below $2 as it warned of possible bankruptcy.

The market is also extremely anxious ahead of Friday's February Labor Department report that is likely to show the loss of hundreds of thousands of jobs. Even some positive news, including some better-than-expected retail sales and factory orders, was not enough to stoke investor confidence.

The reports failed to show a significant improvement and so the market gave back its big gain from Wednesday, said Doreen Mogavero, president of brokerage Mogavero, Lee & Co.

"The economic data is still obviously a huge worry," she said. "I don't think anyone thinks we're in the clear because the market was up yesterday."

But beyond the bad economic data, investors who had placed their hopes in the Obama administration to pull the country out of recession are worried that Washington's efforts will fall short.

"Everyone knows that the economy is bad, so I don't think that's the problem here," said Eric Ross, director of U.S. research at brokerage Canaccord Adams. "The government clearly doesn't have a solution."

TNR Gold Corp announced excellent overall update plans and things look bright for creative juniors - now is definitely survival of the fittest. 

Goldcorp's McEwan puts up more money for Minera Andes, closing rest of the $40 million private placement at $1/share now (instead of initial $0.33) - MAI jumps. 

I think there's a strong possibility he will find out more about junior miner TNR GOLD CORP and acquire it for a tidy $5 million or so, would be interesting if majority shareholder group in TNR will allow that to happen?? 

After all, 1/8 of $497 million NPV is not bad for a company trading at 77 million shares outstanding at $0.06 - that's only a mere $4.62 million market cap! We haven't even factored the rest of the Alaskan projects into account and El Salto/Tapau , etc!


The Hunt for Green and Sustainable Energy