August 20, 1997



Bonus Resource Services Corp (BOU on TSE, VSE), Calgary, AB. Tel: (403) 263-6777. Price: Aug 19/97: $6.10, 52-week range: $7.00-0.80. First mentioned at $0.76 on May 15/96. With the

recent acquisition of Beta Well Service, the company operates a fleet of 125 service rigs and six swabbing units, a workforce in excess of 750 employees. To support this growth, Bonus is raising $46 million through the sale of 8 million shares at $5.75/sh. and in the course of doing so the company has picked up solid investment banking sponsorship. The oil patch, particularily in Western Canada, is going through a vigorous period. This newsletter is raising its stock price scenario to a higher level, from $7.50 to $10 over the next year.



CFM Majestic Inc. (CFM on TSE), Mississauga, ON. Tel: (905) 670-7777. Price Aug 19/97: $23.75, 52-week range: $24.25-11.65. This is the first mention of CFM. The company is really capitalizing on the trend to gas fireplaces. Its share of the market in Canada is 35% and in the US, about 20-25%. Legislation against burning wood appears to be spreading, particularily in the US West. Housing starts are on an up-tick as well as renovations. A longer life span seems amenable to the installation of comforts such as fireplaces. The co.'s purchase in May 1996 of Vermont Castings provided entry into the big mass marketers such as Home Depot and Lowes. With the help of acquisitions, sales have increased from $30 million to $270 million in 3 years. Third quarter June 30 earnings were reported at $5.1 million, or $0.24/sh on revenues of $58.3 million. For the 9 mos, earnings of $15.2 million or $0.80/sh and sales of $188.9 million were 162% and 76% higher, respectively. Analyst Peter Rozenberg of TD Securities is calling for eps of $1.20 this fiscal year and $1.65 next, compared with 33 cents last year. If so, there is more room for gain in share price, possibly to the $30 level.



Canadian Medical Laboratories Limited (CLC on TSE), Mississauga, ON. Tel: (905) 624-0440. Price Aug 19/97: $6.20, 52-week range: $7.25-4.50. This is the first mention of CML. Company plans to branch out to conduct drug testing for the US and Canadian pharmaceutical industries from its current base of operating medical labs in Ontario. Revenues for year ending December should come in at about $70 million and earnings at around $0.45/sh. Next year's target is for e.p.s. of approx. $0.70 on 16.6 million shs out. If this happens, a stock trading price in the mid-teens is realistic. Growth funds appear to be increasing their stake in the company.



Gold Reserve Corporation (GRL on TSE, GLDR on NASDAQ).Spokane, WA. tel:(509) 623-1500. Price Aug 19/97: $11.00 52 week range: $21.70-7.80. First mentioned at $11.95 on July 15/96. Stock was doing well and then got shaken out along with many other gold stocks. Recently, the company has had audited its estimated reserves at the Brisas gold-copper deposit in southeastern Venezuela at 7.3 million ounces of gold and 950 million pounds of copper, making it one of the largest undeveloped gold deposits in the world. A feasibility study is expected to be finalized during the first half of 1998, which will include models of production at 25,000 tons/day and 40,000 tpd. GLR has $38 million in cash. A return to a more normal gold stock market evaluation should see the share price back to its previous high, that is in the low 20's.



IAMGOLD Corporation (IMG on TSE), Markham, ON. Tel: (905) 477-4420. Price Aug 19/97:$5.10, 52-week range:$8.00-4.40. This is the first mention of IMG. IAMGOLD has just completed its first quarter of gold production from the Sadiola Hill mine in Mali, West Africa. The mine reached full production in May, and in the recently completed quarter, produced 115,000 oz Au (44,000 oz net to IMG) at a cash cost of US$148/oz.. The average gold price realized during the period was US$342/oz. Sadiola is on target to produce 313,000 oz (119,000 net to IAMGOLD) this calendar year at a cash operating cost of $169/oz. For 1997, the mine has hedged foreward 160,000 oz at $400/oz. The Sadiola Hill gold mine is a world class deposit containing 7.9 million ounces of gold reserves and resources. IMG has a 38% stake in it. The company has non-restricted cash of $28.6 million which can be applied to its exploration holdings in West Africa (10,000 sq.km in 5 countries) and in South America (60,000 acres in Ecuador). The cash flow from Sadiola should permit IMG to grow into an important gold exploration company. With 64.6 million shs out, the stock appears undervalued in relation to both its underpinnings as well as to its potential.



Major Drilling Group International Inc. (MDI on TSE). Moncton, NB. Tel: (506) 857-8636. Price Aug 19/97: $22.80, 52-week range: $26.60-6.80. This is the first mention of MDI. Major is a mining drilling contractor operating in Canada, the US, Mexico, Central and South America. The company has been growing recently through acquisitions and these have and will be giving them entry into Central and South America as well as in Australia and Western Africa. Much of the growth is the result of countries adopting an open door policy to mineral exploration by international firms. This is specially true in Peru, Chile and now Brazil and Argentina. Fourth quarter ended April saw earnings increase 83% to 44 cents/sh on an increase in revenues of 68% to $28.2 million. For the year, earnings of $1.51/sh were 68% higher than last year's $0.73/sh. To finance recent acquisitions and additional expansion, MDI recently raised $42.7 million through the sale of 2.5 million shs at $18.00/sh. A recent pullback in the share price makes the stock once more appealing as a growth stock.



NQL Drilling Tools Inc. (NQL.A on TSE), Nisku, AB, TEL: (403) 955-8828, Price: Aug 19/97: $10.00, 52-week range: $11.40-2.80. First mentioned at $3.20 on May 15/96. The company is very much in the forefront of the activity surrounding drilling for oil and gas using horizontal and directional techniques. This has proven to be a popular method in Western Canada and is now being adopted in other countries, such as in the Permian basin in the US, particularily in older fields that have been subjected only to conventional drilling. NQL designs, manufactures and supplies downhole tools and services relating to this activity. Since much of the revenue generated comes from the rental of such tools, there is a great deal of leverage built in, the more tools available. The recent $17 million equity financing (2 million shs at $8.50/sh) will help grow this area of the business, as well as provide funds for further acquisitions in related services. Meanwhile, NQL reported 9 mos ( ended May) revenues of $30.2million up 43% and net income of $3.9 million, or $0.36/sh, up 44%. Management is already aiming for earnings of $1/sh for next year and if this is realized, a share price of $15-20 is potential.





Nevsun Resources Ltd. (NSU on TSE and VSE)Vancouver, BC, tel:(604)623-4700. Price Aug 19/97: $4.50 52 week range:$12.40-2.75. First mentioned at $10.10 on July 12/96. Nevsun has recently been almost the perfect example of a gold exploration stock getting the stuffing beaten out of it for various reasons: low gold prices, scandals affecting certain other exploration companies and delays in completing exploration ventures. In keeping with the trend, the stock has bounced off its lows. It appears that the government of Ghana is on the verge of settling its national frrest issue and that exploration will resume on the Kubi project. To date, 900,000 oz Au have been identified on these deposits and with further exploration this figure should be expanded. The more complex and possibly more expensive deposit at Tabakoto, Mali has an indicated resource of 2.5 million ounces of gold. Nevertheless, these two deposits combined with a cash holding of some $33 million provides a share value of about $8. This may explain the persistent rumors, emanating mainly out of London, that NSU stock is a possible takeover target. Once the dust has settled, a share price closer to the low teens is realistic over the next year.



C M Oliver Inc (OLV on TSE) Vancouver BC Tel (604) 685-6288. Price: Aug 19/97:$1.46 52 week range:$2.40-1.25. Mentioned first at $1.07 on Jan 15/96. The company reported net income of $4.6 million, or $0.27/sh, for the year ended March 31 on revenues of $83.1 million. Total assets under administration for this investment brokerage and investment planning firm grew to $2.5 billion from $2.0 billion. Recently, the firm has been hiring some seasoned pros, mainly in the institutional equity and trading areas. The stock looks undervalued and could very well become a takeover target. A more realist trading level would appear to be in the $3 area.