Time to Run
So we ended the third quarter near record highs for the big cap stocks with the Dow 30 finishing within 100 points of a new all time record high. The major stocks pretty much spent the third quarter ragaining the ground they had lost over the earlier summer months. This is very important for the stocks we have added to our portfolio, and the main reason why we have been adding to our positions at rock bottom prices.
The way we see the markets playing out at this time consists of a market rally during the fourth quarter (we understand that this prediction is not really going out on a limb, but please hear us out). The big Techs we think will continue to lead the market higher, and as a consequence we think that tech in general will charge higher. This will at first most likely keep prices depressed in sectors that compete for the speculative dollars, meaning our uraniums and tar sands plays. Not to worry though, because we believe that as this market rally strengthens, so will the inflow of new money from the sidelines.
This is what truly excites us because we think that at least 2 of our uranium plays have the potential to double their market cap through the drill bit this season (drilling season that is). We also believe that Canwest will once again be successful on over 50% of their drill targets. This news will attract the new capital (those speculative dollars we were talking about earlier) and because at the same time there is a rally in tech, it will add to the magnitude of any bull rush into uranium. At this early stage in exploration it takes just one success to add greatly to the market caps of all the companies in the sector. So we believe that the greater the run in tech through the end of the year, the greater the rush of dollars into uranium and tar sands when drill results begin to come out.
We have constantly stated that Pitchstone is one of our favorite stocks in the uranium area right now and went further to state that the stock is a great buy anywhere from $1.20-$1.30. We stuck by our word and more than doubled our holdings in PXP in the last few weeks. The company will be drilling on their very prospective land and leaving the bill for SXR to pick up. The company did however sell the SXR shares and now has roughly $5 million in the bank. They still posses 300,000 warrants which will most likely be sold within the next year or two (whenever they use their $5 million through drilling). Any good news from PXP could potentially cause a huge spike in the price as we have witnessed in the past due to a small float. The company only has about 27 million shares fully diluted with a strong balance sheet and an excellent management team. This all adds up to nearly a great story, but the catalyst will surely be the drill results from this season.
We are currently looking at adding to our Canalaska holdings as well. Why wouldnt we be willing to add to an investment when a large multinational mining company has put $11 million into CVV's most promising project? We have heard from our sources within the industry that this JV deal has upped the asking price for stakes in these projects. We have spoken with people at different companies within the basin that have real estate near the major mines, and they all say that they are looking for partners and will use that dollar figure when negotiating price terms. After viewing all the drill results and information regarding last drilling season, we firmly believe that CVV may be onto a world-class discovery. They found a foot of uranium mineralization and are going to drill that area extensively this season, which we believe will lead to a large find.
The beginning of October is the month to move into these small resource stocks as the long, boring summer drained the speculative money out of the sector. The fireworks begin with the first freeze because that is when the equipment can me mobilized to the sites and the faster that this is accomplished the sooner drilling begins and is completed. The old market saying goes, "buy on the rumor, sell on the news" and this can most definately be put to practice in our current situation. We will continue to nibble , and when necessary we will take bites the size your mother warned you about.
The way we see the markets playing out at this time consists of a market rally during the fourth quarter (we understand that this prediction is not really going out on a limb, but please hear us out). The big Techs we think will continue to lead the market higher, and as a consequence we think that tech in general will charge higher. This will at first most likely keep prices depressed in sectors that compete for the speculative dollars, meaning our uraniums and tar sands plays. Not to worry though, because we believe that as this market rally strengthens, so will the inflow of new money from the sidelines.
This is what truly excites us because we think that at least 2 of our uranium plays have the potential to double their market cap through the drill bit this season (drilling season that is). We also believe that Canwest will once again be successful on over 50% of their drill targets. This news will attract the new capital (those speculative dollars we were talking about earlier) and because at the same time there is a rally in tech, it will add to the magnitude of any bull rush into uranium. At this early stage in exploration it takes just one success to add greatly to the market caps of all the companies in the sector. So we believe that the greater the run in tech through the end of the year, the greater the rush of dollars into uranium and tar sands when drill results begin to come out.
We have constantly stated that Pitchstone is one of our favorite stocks in the uranium area right now and went further to state that the stock is a great buy anywhere from $1.20-$1.30. We stuck by our word and more than doubled our holdings in PXP in the last few weeks. The company will be drilling on their very prospective land and leaving the bill for SXR to pick up. The company did however sell the SXR shares and now has roughly $5 million in the bank. They still posses 300,000 warrants which will most likely be sold within the next year or two (whenever they use their $5 million through drilling). Any good news from PXP could potentially cause a huge spike in the price as we have witnessed in the past due to a small float. The company only has about 27 million shares fully diluted with a strong balance sheet and an excellent management team. This all adds up to nearly a great story, but the catalyst will surely be the drill results from this season.
We are currently looking at adding to our Canalaska holdings as well. Why wouldnt we be willing to add to an investment when a large multinational mining company has put $11 million into CVV's most promising project? We have heard from our sources within the industry that this JV deal has upped the asking price for stakes in these projects. We have spoken with people at different companies within the basin that have real estate near the major mines, and they all say that they are looking for partners and will use that dollar figure when negotiating price terms. After viewing all the drill results and information regarding last drilling season, we firmly believe that CVV may be onto a world-class discovery. They found a foot of uranium mineralization and are going to drill that area extensively this season, which we believe will lead to a large find.
The beginning of October is the month to move into these small resource stocks as the long, boring summer drained the speculative money out of the sector. The fireworks begin with the first freeze because that is when the equipment can me mobilized to the sites and the faster that this is accomplished the sooner drilling begins and is completed. The old market saying goes, "buy on the rumor, sell on the news" and this can most definately be put to practice in our current situation. We will continue to nibble , and when necessary we will take bites the size your mother warned you about.
posted by -theinvestar @ 10/02/2006 09:15:00 PM
0 Comments:
Post a Comment
<< Home