Jim Letourneau's Blog

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Filtering by Tag: news

Calandra's Complaint - Too Many Miners

Thom Calandra's latest Stockhouse post points out that there are over 4000 junior mining companies globally.

The roulette wheel of too many mining choices deserves a wide berth, not a spin. Did you know there are 4,000 tickers on that wheel?

An investor could spin that wheel once each minute for almost three days running and come up a winner maybe 20 times. Assuming the investor covered enough of the wheel with chips, that is.

The winnowing process has begun. Investors aren't going to be making bets on companies that only have enough cash to "keep the lights on" for a year or two. I think most shareholders would rather have their money back than see it go to paying salaries and the costs of maintaining a public listing.

One positive outcome of the great junior mining company bloodbath is that the survivors are pretty easy to spot. That makes our job much easier.

Gold Financing Glut

GoldSeek.com lists some of the latest precious metal financings.

  • Newmont announced a $1.2 billion equity issue

  • Kinross Gold – $360 million

  • Silver Wheaton - $250 million

  • Red Back Mining - $150 million

  • Endeavour Financial - $100 million

  • Alamos Gold - $75 million


Don't forget to check out our latest research report.

We would add to that the closed financing by Central Fund of Canada for US$130 million. There have also been some major bullion purchases by the ETFs in 2009. CommodityOnline.com reports that in 24 2009 trading days, the major ETFs have taken up some $3.1 billion in 111 tonnes of gold.

While I'm as bullish as the next guy on gold (OK not GATA bullish), I think we're in the 7th inning of the current gold move.

Alaska Volcano Watch

Steam and tremors emanating from the 10,200-foot Redoubt Volcano, located about 100 miles southwest of Anchorage, are more likely than not to result in an eruption.

USA Today

Everything you need to know about the Redoubt Volcano is available from the Alaska Volcano Observatory.

Volcano Trivia

  • There have been four cases since 1982 in which jet engines have flamed out in flight due to an encounter with volcanic ash.

  • In any one week, there are usually at least two or three volcanoes erupting sufficiently near international air routes to trigger the IAVW

International Airways Volcano Watch (IAVW)

Alberta Drilling Rights Sale Very Quiet

Land sale activity in Alberta is dwindling due to an uncertain royalty structure, low commodity prices and a dwindling credit market. Land acquisition shows commitment on the part of oil companies to drill new wells. If they don't drill within a fixed period of time, they lose their drilling rights and the lands revert back to the Crown. Diminished drilling budgets force companies to "high grade" their land packages. They'll do the minimum amount of drilling required to keep their core landholdings and let the rest expire.

Land sales are not the best barometer of future industry activity. Record Alberta land sales in in 2005 related to a boom in coalbed methane plays marked a peak in the fortunes of companies focused on unconventional gas. The 2008 land sale take was $938 million, in  2005 it was $1.8 billion. While 2009 is shaping up to be a very slow year, it is going to get easier for companies to make a profit exploring for oil as land and drilling costs plummet from peak levels.

US Energy Independence Reality Check

Peter Tertzakian (author of A Thousand Barrels a Second) floats some presidential quotes in his latest column. I'm hearing The Who's Won't Get Fooled Again in my head (over and over and over...).

At the end of this decade, in 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving. Richard Nixon-1974

I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 – never. Jimmy Carter-1979

It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs. Barrack Obama-2009

Tertzakian writes...When Carter left office in 1982 the United States consumed about 15 MMB/d, 28% of which was imported from foreign sources. By the time Obama assumed his watch over the nation, foreign oil dependency was 65% on around 20 MMB/d of consumption.