August 28, 1995
The Diamond Fields nickel-cobalt discovery at Voisey Bay, Labrador is an example of one grouping which gathered a great deal of attention beginning in February 1995. When it becomes evident now that the one stock that really represents value is only Diamond Fields ( it moved up in price from under $4 to over $70 ) it may be game over, at least temporarily, for the slew of companies that jumped into the area play. This newsletter will not only be looking for evidence of the next area discovery, but will be going back to take a look at the casualties of the Voisey Bay once the shake-out has run its course.
Chai-Na-Ta Corp ( CC on the TSE and CCCF on NASDAQ ) Langley, British Columbia based (604) 533-8883 ginseng grower is moving in the right direction by both increasing harvesting acreage as well as producing value-added product. If ever owning this stock becomes a fad, the shares will trade at prices considerably higher than its current $2.90 level.
Hartco Enterprises Inc. ( HTC on TSE and ME ) Montreal based (514)354-3810 operator of Canada's largest network of computer outlets may be one way of participating in the impact Windows 95 may have. The shares at $8.50 of this well-managed company have consistently outperformed the market.
Malofilm Communications Inc. ( MFM.B on TSE and ME ) Montreal based (514)844-4555 is Canada's largest video distributor. In spite of past growth record the stock at $5 trades at low value, particularly in relation to 1994 earnings of $0.46/sh and forecasts of $0.55 this year and $0.70 in 1996.
In the currently overlooked oil and gas sector, Strike Energy Inc. ( SEN on TSE ) Calgary-based (403)233-6416 is growing through acquisitions done at reasonable cost, development through horizontal drilling and, possibly, through enhanced recovery of existing oil reserves. The shares trading at $3 may be considered for the long term.
The gold mining sector has been underperforming in global stock markets and the recent toxic spill at the Omai gold mine in Guyana has added negative sentiment to the industry. However, under such conditions are born investment opportunities. Both Cambior Inc. ( CBJ on TSE & ME and Amex ) and Denver-based Golden Star Resources ( GSC on TSE and GSR on Amex ) have pulled back to very attractive price levels of $14 and $7, respectively. Other emerging junior gold mining exploration companies to keep an eye on are Franc-Or Resources Inc. ( FOR on TSE ) (514) 861-5323 exploring and developing large tracts in stable French Guiana, Birim Goldfields Inc. ( BIRM on CDN-OTC )(514)393-8611 who along with joint-venture partner Hemlo Gold Mines Inc. is exploring a vast tract in the Ashanti belt in the Republic of Ghana. Also, newcomer Procoloro Resources Inc. ( PCH on ME )(819)738-5435 is well worth a glance, the company developing and expecting to bring into production quickly several small gold mines in Columbia, South America, which together could add up significantly.