TreasurePicks: February 2008

Friday, February 29, 2008

CRO-V This Is A Rocket- One To Watch For Pullback

Markets RED RED RED - BWR.wt down 20% Haircut

Move your money out as I did...Here is a quick alternate nickel stock, .60 cents down from the high of 1.98 but a smaller float, TSX based , has bottomed and is moving back up,

Canadian producing mine and lots of money and potential to double or triple this year.
down from the high, but has a double bottom bounce up happening.

Check this out click the link

One To Watch CRO-TSX-V

Thursday, February 28, 2008

Jennings Confirms Target PDP:TSX $17.40

DrillingThe well is created by drilling a hole 5 to 30 inches (13 – 76 cm) diameter into the earth with an oil platform which rotates a drill bit. After the hole is drilled, a steel pipe (casing) slightly smaller than the hole is placed in the hole, and secured with cement. The casing provides structural integrity to the newly drilled wellbore in addition to isolating potentially dangerous high pressure zones from each other and from the surface.With these zones safely isolated and the formation protected by the casing, the well can be drilled deeper (into potentially more-unstable and violent formations) with a smaller bit, and also cased with a smaller size casing. Modern wells often have 2-5 sets of subsequently smaller hole sizes drilled inside one another, each cemented with casing.

Crude surges past $102 a barrel

JOHN WILEN
Thursday, February 28, 2008
NEW YORK — Crude prices rebounded Thursday, shooting up more than $2 (U.S.) a barrel to a new record as a falling U.S. dollar and the prospect of lower interest rates attracted fresh money to the oil market.
U.S. retail gasoline prices, meanwhile, rose closer to records above $3 a gallon.

A pair of dismal economic reports Thursday drew more money into the oil market, as did Federal Reserve Chairman Ben Bernanke's comments that the economy is not immediately threatened with stagflation, a combination of economic weakness and rising inflation.
The Commerce Department said gross domestic product grew at only a 0.6 per cent rate in the fourth quarter, below estimates and at only a fraction of the previous quarter's growth rate, while the Labour Department said applications for unemployment benefits rose by 19,000 last week, more than expected.

Rather than viewing such news as bad for oil demand, investors chose to see it as confirmation of their beliefs that the Fed will continue cutting interest rates to try to shore up the economy. Interest rate cuts tend to weaken the U.S. dollar, and crude futures offer a hedge against a falling dollar. Also, oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
“I really think that this is oil being viewed as ... a financial instrument,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Light, sweet crude for April delivery rose $2.45 to $102.09 a barrel on the New York Mercantile Exchange after rising to a new record of $102.74.

Crude prices are within the range of inflation-adjusted highs set in early 1980. A $38 barrel of oil then would be worth $97 to $104 or more today, depending on the how the adjustment is calculated. A direct comparison with daily Nymex prices is difficult because historical data, gathered before the crude futures contract was created in 1983, are based on average monthly prices posted by oil producers.
Different analysts have varying benchmarks for an inflation adjusted high. For example, John Kingston, director of oil at Platts, the energy research arm of McGraw-Hill Cos., arrived at an all-time high of more than $104 a barrel, which he said adjusts for delivery costs to and from Cushing, Okla., the Nymex crude oil delivery terminal. Using his own inflation adjustment, A. G. Edwards & Sons, Inc. oil analyst Eric Wittenauer arrived at a widely quoted estimate of $103.76.

However, an inflation calculator maintained by the Bureau of Labour Statistics estimates that $38 in 1980 is worth $97.34 today. A Federal Reserve Bank of Minneapolis calculator puts $38 in 1980 dollars at $99.43 today.

Oil's rally is pulling gas prices higher. At the pump, retail gasoline prices rose 0.9 cent overnight to a national average of $3.161 a gallon, according to AAA and the Oil Price Information Service. Prices are within 7 cents of May's record of $3.227 a gallon. The Energy Department expects prices to peak near $3.40 a gallon this spring; many analysts think prices will rise much higher than that.
Oil prices fell $1.24 a barrel Wednesday after the Energy Department reported crude inventories rose more than expected last week.
But that reflected a rare reaction by oil investors to supply and demand fundamentals. Oil prices have been far more affected in recent months by dollar- and interest rate-driven investment decisions, analysts say.

“[Fundamentals] have no relationship to price right now,” Mr. Flynn said. If prices were responding to supply and demand, fundamentals, they would be falling, he said. Several recent forecasters have lowered oil demand growth predictions for this year due to the slowing economy, and domestic oil inventories have been growing.

Oil prices have received some support in recent days from word of a technical glitch that temporarily disrupted the flow of a small amount of crude out of Nigeria. Eni SpA denied earlier reports that its Brass River oil terminal had been attacked by rebels. Turkey's recent invasion of Northern Iraq in search of Kurdish rebels has also been supportive, Mr. Flynn said, but these stories are not enough in and of themselves to explain why oil continues to trade above $100.

Many analysts believe it's just a matter of time until the fundamentals reassert themselves on the market, pushing prices down.

Other energy futures also rose Thursday. March gasoline futures rose 0.94 cent to $2.4871 a gallon on the Nymex, while March heating oil futures rose 6.23 cents to $2.8334 a gallon.

April natural gas futures jumped 41.3 cents to $9.473 per 1,000 cubic feet. The Energy Department said inventories fell by 151 billion cubic feet last week, slightly less than expected.

In London, April Brent crude rose $2.18 to $100.45 a barrel on the ICE Futures exchange.

© Copyright The Globe and Mail

BWR Anonymous Dumps 1 Million Plus Ahead Of Financials

Petrolifera Petroleum Limited Cases Puesto Morales Este X-1001 Well

Drilling
The well is created by drilling a hole 5 to 30 inches (13 – 76 cm) diameter into the earth with an oil platform which rotates a drill bit. After the hole is drilled, a steel pipe (casing) slightly smaller than the hole is placed in the hole, and secured with cement. The casing provides structural integrity to the newly drilled wellbore in addition to isolating potentially dangerous high pressure zones from each other and from the surface.

With these zones safely isolated and the formation protected by the casing, the well can be drilled deeper (into potentially more-unstable and violent formations) with a smaller bit, and also cased with a smaller size casing. Modern wells often have 2-5 sets of subsequently smaller hole sizes drilled inside one another, each cemented with casing.

After drilling and casing the well, it must be 'completed'. Completion is the process in which the well is enabled to produce oil or gas.

In a cased-hole completion, small holes called perforations are made in the portion of the casing which passed through the production zone, to provide a path for the oil to flow from the surrounding rock into the production tubing. In open hole completion, often 'sand screens' or a 'gravel pack' is installed in the last drilled, uncased reservoir section.

These maintain structural integrity of the wellbore in the absence of casing, while still allowing flow from the reservoir into the wellbore. Screens also control the migration of formation sands into production tubulars and surface equipment, which can cause washouts and other problems, particularly from unconsolidated sand formations in offshore fields.

After a flow path is made, acids and fracturing fluids are pumped into the well to fracture, clean, or otherwise prepare and stimulate the reservoir rock to optimally produce hydrocarbons into the wellbore. Finally, the area above the reservoir section of the well is packed off inside the casing, and connected to the surface via a smaller diameter pipe called tubing.

This arrangement provides a redundant barrier to leaks of hydrocarbons as well as allowing damaged sections to be replaced. Also, the smaller diameter of the tubing produces hydrocarbons at an increased velocity in order to overcome the hydrostatic effects of heavy fluids such as water.

In many wells, the natural pressure of the subsurface reservoir is high enough for the oil or gas to flow to the surface. However, this is not always the case, especially in depleted fields where the pressures have been lowered by other producing wells, or in low permeability oil reservoirs. Installing a smaller diameter tubing may be enough to help the production, but artificial lift methods may also be needed. Common solutions include downhole pumps, gas lift, or surface pump jacks.

The use of artificial lift technology in a field is often termed as "secondary recovery" in the industry. Many new systems in the last ten years have been introduced for well completion. Multiple packer systems with frac ports or port collars in an all in one system have cut completion costs and improved production, especially in the case of horizontal wells. These new systems allow casings to run into the lateral zone with proper packer/frac port placement for optimal hydrocarbon recovery.

[edit] Production
The production stage is the most important stage of a well's life, when the oil and gas are produced. By this time, the oil rigs and workover rigs used to drill and complete the well have moved off the wellbore, and the top is usually outfitted with a collection of valves called a "Christmas Tree". These valves regulate pressures, control flows, and allow access to the wellbore in case further completion work is needed. From the outlet valve of the Christmas Tree, the flow can be connected to a distribution network of pipelines and tanks to supply the product to refineries, natural gas compressor stations, or oil export terminals.

As long as the pressure in the reservoir remains high enough, this Christmas Tree is all that is required to produce the well. If the pressure depletes and it is considered economically viable, an artificial lift method mentioned in the completions section can be employed.

Petrolifera Petroleum Limited Cases Puesto Morales Este X-1001 Well
15:49 EST Thursday, February 28, 2008

CALGARY, Feb. 28 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) announces today that it has drilled, logged and cased the PME X-1001 well on its recently-acquired Puesto Morales Este Concession located in the province of Rio Negro in the Neuquén Basin, onshore Argentina.
The well encountered several zones of interest and will be evaluated once a service rig is available to conduct testing programs.

Petrolifera Petroleum Limited is a Calgary-based crude oil and natural gas exploration and production company with operations in Argentina, Colombia and Peru.

Forward Looking Information
This press release contains forward-looking information, including but not limited to planned testing of the PME X-1001 well, which has been cased for further evaluation. There can be no assurance that testing of this well will yield commercial results. The information is based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. Additional risks and uncertainties are described in the company's Annual Information Form which is filed on SEDAR at www.sedar.com.

FNI=$$$ Ready To Run Up From Double Bottom

The Dundee Trader is phucking with the shares today holding it down by stealing all the bids,
he's selling off on a bloddy day otherwise we would be over .70 cents today.
Azzwhole ;-)

Source

Nickel Rises to 3-Month High as BHP Billiton Mine Halts Output
By Chanyaporn Chanjaroen

Feb. 28 (Bloomberg) -- Nickel rose to the highest in three months after a strike at BHP Billiton Ltd.'s Cerro Matoso mine in Colombia halted production that accounts for about 4 percent of world output. Tin traded at a record.

BHP Billiton, based in Melbourne, cannot say how long the operations will be affected by the strike which began today, spokeswoman Samantha Evans said. The mine produced about 52,700 metric tons of nickel in 2007, according to London-based consulting company CRU, compared with global output of 1.54 million tons.

``The bull is looking for a reason for nickel to join the rally,'' Tony Warwick-Ching, a nickel analyst at CRU in London, said today by phone. `

`There's plenty of nickel around.'' Nickel for delivery in three months advanced $1,349, or 4.6 percent, to $30,549 a ton as of 12:24 p.m. in London. Earlier it traded at $30,900 a ton, the highest intraday price since Nov. 19.

Nickel has risen 16 percent this year, lagging behind copper and aluminum, as demand from stainless-steel mills, the largest users of the metal, is recovering. Acerinox SA, Spain's biggest stainless-steel maker, posted a fourth-quarter loss as prices and demand were ``exceptionally low,'' the company said Feb. 26.

CRU forecast a recovery of the stainless-steel industry in the second quarter.

Rising Inventories

Nickel stockpiles monitored by the LME rose 282 tons, or 0.6 percent, to 47,868 tons, paring this year's decline to 0.2 percent.

Tin climbed $500, or 2.8 percent, to $18,450 a ton. The metal, used in electronic soldering and food cans, has reached a record every day this week on concern of limited exports from China and Indonesia, the world's two largest producers. The Democratic Republic of Congo, another major miner, also banned exports in the eastern Walikale region, the country's most productive, because of a lack of security.

Copper gained $5 to $8,440 a ton and aluminum dropped $5 to $3,086. Lead declined $40 to $3,305. Zinc increased $5 to $2,690.

First Nickel Provides 2008 Guidance

11:00 EST Tuesday, February 12, 2008
TORONTO, ONTARIO--(Marketwire - Feb. 12, 2008) - First Nickel Inc. (TSX:FNI) today provided guidance with respect to 2008 production.

The company expects:
- To produce between 3.8 and 4.4 million pounds of payable nickel, and
- To produce between 2.3 and 2.7 million pounds of payable copper.

First Nickel has budgeted $17 million for development and capital improvements at the Lockerby Mine and expects to spend approximately $7 million on exploration the majority of which will be spent on targets around the existing Lockerby Mine infrastructure, Lockerby East and footwall areas. Funding for these expenditures will come from existing cash balances and cash flow generated from the Lockerby operations.

William Anderson, President and CEO states, "We look forward to a significantly improved 2008. I am pleased that the Board has authorized expenditures designed both to improve our existing production profile and to ramp up our aggressive exploration programs on our various, highly prospective properties in the Sudbury area."

First Nickel is a Canadian mining and exploration company. Its current activities are primarily focused on the Sudbury Basin in northern Ontario, the location of the company's producing property (the Lockerby Mine) and four of its exploration properties. First Nickel also has two exploration properties in the Timmins region of northern Ontario. First Nickel's shares are traded on the TSX under the symbol FNI.
This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.
FOR FURTHER INFORMATION PLEASE CONTACT:First Nickel Inc.W.J. AndersonPresident & CEO(416) 362-7050(416) 362-9050 (FAX)Email: wanderson@firstnickel.com
First Nickel Reports 289% Increase in Indicated Resources at the Lockerby Mine1/16/2008
-->
Investor Update Conference call at 2:00 pm ET todayTORONTO, ONTARIO, Jan 16, 2008 (MARKET WIRE via COMTEX News Network) --

First Nickel Inc. (TSX: FNI) is pleased to report an updated mineral resource estimate for its Lockerby Mine in Sudbury.

First Nickel has estimated a NI 43-101 compliant Mineral Resource that contains Indicated Resources of 2.89 million tonnes grading 1.78% Ni, 1.23% Cu and 0.07% Co, from the 65 to 72 levels, and Inferred Resources of 0.38 million tonnes grading 1.37% Ni, 1.05% Cu and 0.05% Co, below the 72 Level. A 1.0% nickel equivalent cut-off grade was used for this resource estimate. The resource estimate does not include the 64 Level, which was part of the March 2007 resource estimate and is currently being mined.

This upgraded resource estimate equates to a total of 113 million pounds of contained nickel in the Indicated Resource Category for the Lockerby Depth Zone and represents a net increase of 68 million pounds as compared to those previously reported in March 2007.

Based on this new Resource Estimate, the Lockerby Mine currently has in excess of 100 million pounds of contained nickel in the Indicated Resource category which should allow First Nickel to plan for mine expansion and increased production."

Using this estimate, First Nickel expects to complete a new life of mine study this quarter that will include engineering and economic comparisons of shaft extension options and mine design.

It is anticipated that such infrastructure improvements, based on the new resource model, will yield increased output, better productivity, reduced costs and will extend the mine life by 8 years or more.

Mineral Resource Estimate
The Mineral Resource model was prepared by the FNI Technical Team. The model and modelling procedures have been reviewed by Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA), an independent, geological and mining consulting firm. In Scott Wilson RPA's opinion the mineral resource modeling and the Mineral Resource estimation, conform to NI 43-101 standards. In Scott Wilson RPA's opinion, the density of drilling and continuity of mineralization is sufficient to classify the estimated resources between the 65 and 72 levels on the Lockerby Depth Zone as Indicated Mineral Resources and below the 72 Levels on the Lockerby Depth Zone and the previously reported Lockerby East Zone as Inferred Mineral Resources. This resource estimate will form a portion of a more comprehensive Technical Report being prepared by Scott Wilson RPA.
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PDP Chart + Depth Today

Canadian investors are likely to be more concerned

Premarket: Banks and energy in the spotlight

Thursday, February 28, 2008
Enough with Ben Bernanke and his ruminations on inflation. On Thursday, Canadian investors are likely to be more concerned with their own affairs with a busy round of earnings releases that will help gauge the health of the Canadian economy.
Toronto-Dominion Bank beat estimates when it released its first quarter results before markets opened. Profits at the one Canadian bank that managed to avoid the U.S. subprime morass rose 5.3 per cent to $1.45 a share.
National Bank of Canada also beat estimates and Canadian Imperial Bank of Commerce releases its own first-quarter results this morning.
In the energy sector, Canadian Natural Resources Ltd. produced fourth-quarter profits that were more than double last year’s results but nonetheless failed to match analyst expectations. Meanwhile, Talisman Energy, which has been a notable laggard in the sector, announced that its fourth-quarter profit rose 9.7 per cent but came in well below expectations.
In the United States, investors will get to mull over weekly jobless claims, which will shed additional light on the state of the economic slowdown there, and the release of fourth quarter numbers on gross domestic product, which should summarize what everyone already knows: the economy is weaker. As well, they will be treated to another appearance from Mr. Bernanke, chairman of the U.S. Federal Reserve, who speaks before the Senate Panel on Monetary Policy at 10 a.m. (EST).
Stock market futures for the S&P 500 fell 8.4 points, to 1372, before the start of trading. Futures for the Dow Jones industrial average fell 60 points, to 12,633.
In Europe, the U.K.’s FTSE 100 fell 1.1 per cent in afternoon trading there. And Germany’s DAX index fell 1.1 per cent. In Asia, Japan’s Nikkei 225 fell 0.8 per cent.

© Copyright The Globe and Mail

Wednesday, February 27, 2008

PDP Houses Today Anonymous Accumulation

Programmed Trades of 100, 200 by some Anonymous House has walked PDP down
I'm not as happy as I was today when the stock was at 12.95.

BWR Running Hard Today - Buy+Sells Here

PDP Flying Jennings Confirms 17.40

Tuesday, February 26, 2008

PDP Running Up Fast - Its About Time

Pescod Says This Tonight

Dennis Gartman Thumbs Up On Canadian Stocks

Gartman to the rescue

Tuesday, February 26, 2008

It’s one thing when a Canadian observer gives the Canadian economy a vote of confidence. It’s quite another when an outsider does it. For some reason, it sounds more real when the compliment comes from someone with no conflicts.

The thumbs-up comes from Dennis Gartman, author of the influential Gartman Letter and, yes, the same man who slapped Alberta silly last year after the provincial government raised its royalty haul on energy producers in there. After that money grab, Mr. Gartman swore off the region – but the contrarian in him is warming up again now that a loose consensus of market watchers believes that Canada is going to be dragged down by the United States.

On Monday, the International Monetary Fund joined the consensus of naysayers, slashing its forecast for Canadian economic growth to 1.8 per cent in 2008, down from an earlier forecast of 2.4 per cent, pointing to the unsettled U.S. economy for its change of heart. The IMF added that the risks of a more serious downturn are growing.

“The IMF still strongly believes in the old thesis that if the U.S. economy gets a cold the Canadian economy shall get pneumonia,” Mr. Gartman said in his daily letter on Tuesday. “We do not, preferring the metaphor that if the U.S. economy gets a cold, the Canadian economy shall get a bad case of the ‘sniffles,’ but little else.”

His defence of Canada rests on two theories: that the market for Canadian trade is far more diversified than it once was, which means that it no longer relies on a booming U.S. economy for its health; and that the world continues to scramble for so-called ‘stuff’ – the sort of hard commodities that Canada, along with a select group of other countries, has in abundance.

“The simple fact is that the global economy remains quite strong despite weakness in the U.S., and the global economy needs the things that Canada, Australia, and New Zealand have in abundance,” Mr. Gartman said. “To complicate this issue is to... Well, it is to complicate the issue!”

It's rebound season

At noon: It's rebound season

Tuesday, February 26, 2008

Investors looked at tumbling U.S. house prices, rising wholesale prices, crumbling consumer confidence and further anxiety over the U.S. Federal Reserve’s take on inflation – and they bought stocks.

By midday on Tuesday, major North American stock market indexes had erased earlier losses and posted substantial gains. The Dow Jones industrial average rose to 12,670, up 99 points or 0.8 per cent. The broader S&P 500 rose to 1378, up 6 points or 0.4 per cent.

In both cases, International Business Machines Corp. was at the heart of the U.S. rally. Soon after the company announced a $15-billion (U.S.) share buyback plan and nudged up its 2008 profit forecast, the shares bounced 3.5 per cent higher, contributing more than 30 points to the Dow’s rally. Clearly, if IBM is feeling good about its business, others should as well.

Well, not Google Inc. The Internet company, which derives most of its revenue from online advertising, was walloped after a report showed that paid ad views fell 7 per cent between January and December, suggesting that even online growth could be impaired by a slowing economy. Google’s shares fell 6.7 per cent – bringing the former superstar’s shares down 34 per cent so far this year.

In Canada, the S&P/TSX composite index rose to 13,821, up 124 points or 0.9 per cent at midday. Energy stocks were in the driver’s seat, rising 1.7 per cent. However, Cott Corp. continued to plumb new depths, falling 33.5 per cent, and Research In Motion Ltd. slid 2 per cent.

First Nickel Provides 2008 Guidance

Feb 26 2008 Okay I'm NOT betting on BWR Financials on 29th.
So I have traded my BWR.wt warrants for FNI-T .
The cost was equal to current value of the warrants
Smaller Float Great Guidance On 2008
And It appears that it bottomed at .44 cents during the crash.
We shall see how this trade turns out.
Update: BWR.wt broke out 20% on Feb 27, 2008
So I certainly left the stock too soon OUCH!
But PDP took off like a rocket 3.03 since Friday Feb 22 2008
I'm up $27,270.00 on PDP.

First Nickel Provides 2008 Guidance

11:00 EST Tuesday, February 12, 2008

TORONTO, ONTARIO--(Marketwire - Feb. 12, 2008) - First Nickel Inc. (TSX:FNI) today provided guidance with respect to 2008 production.

The company expects:

- To produce between 3.8 and 4.4 million pounds of payable nickel, and

- To produce between 2.3 and 2.7 million pounds of payable copper.

This news release may contain forward-looking statements, which are subject to certain risks, uncertainties and assumptions. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such forward-looking statements are made as at the date of this news release, and the company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

FOR FURTHER INFORMATION PLEASE CONTACT:

First Nickel Inc.
W.J. Anderson
President & CEO
(416) 362-7050
(416) 362-9050 (FAX)
Email: wanderson@firstnickel.com

First Nickel Reports 289% Increase in Indicated Resources at the Lockerby Mine 1/16/2008

Investor Update Conference call at 2:00 pm ET today

TORONTO, ONTARIO, Jan 16, 2008 (MARKET WIRE via COMTEX News Network) --

First Nickel Inc. (TSX: FNI) is pleased to report an updated mineral resource estimate for its Lockerby Mine in Sudbury.

"The potential of the Lockerby Depth Zone has expanded significantly with an increase of the Indicated Resources by 289% above the March 2007 Resource Estimate. We are gratified that, when compared to the Indicated Resources at the time of purchase of the Lockerby Mine in 2005, we have increased the Indicated Resources more than ten-fold in less than 3 years." stated William Anderson, President and CEO. "Based on this new Resource Estimate, the Lockerby Mine currently has in excess of 100 million pounds of contained nickel in the Indicated Resource category which should allow First Nickel to plan for mine expansion and increased production."

Using this estimate, First Nickel expects to complete a new life of mine study this quarter that will include engineering and economic comparisons of shaft extension options and mine design. It is anticipated that such infrastructure improvements, based on the new resource model, will yield increased output, better productivity, reduced costs and will extend the mine life by 8 years or more.

Mineral Resource Estimate

The Mineral Resource model was prepared by the FNI Technical Team. The model and modelling procedures have been reviewed by Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA), an independent, geological and mining consulting firm. In Scott Wilson RPA's opinion the mineral resource modeling and the Mineral Resource estimation, conform to NI 43-101 standards. In Scott Wilson RPA's opinion, the density of drilling and continuity of mineralization is sufficient to classify the estimated resources between the 65 and 72 levels on the Lockerby Depth Zone as Indicated Mineral Resources and below the 72 Levels on the Lockerby Depth Zone and the previously reported Lockerby East Zone as Inferred Mineral Resources. This resource estimate will form a portion of a more comprehensive Technical Report being prepared by Scott Wilson RPA.

Source+More

Monday, February 25, 2008

BWR Houses

Petrolifera Petroleum Reports Increased Reserves up 43%

Petrolifera Petroleum Reports Increased Reserves and Pre-Tax Present Value for Year Ended December 31, 2007; Proved Crude Oil and Natural Gas Liquids Reserves Up 43 Percent After Record Production in 2007

(4) Volumes, future net revenue and present value of future net revenue do not include undeveloped land values in Argentina, Colombia or Peru.

cnw

CALGARY, Feb. 25 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) announces today that the estimates of the company's 1P ("proved"), 2P ("proved and probable") and 3P (proved, probable and possible) reserves, as prepared by GLJ Petroleum Consultants of Calgary, Alberta ("GLJ") in a report with an effective date of December 31, 2007 ("GLJ 2007 Report"), confirmed the significant positive impact of 2007 drilling activity and the installation of new production facilities, including a waterflood, at its Puesto Morales Norte Field in the Neuquen Basin, Argentina.

The GLJ Report and the estimates provided herein were prepared using assumptions and methodology guidelines outlined in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and in accordance with National Instrument 51-101 ("NI 51-101"). Comparisons provided herein with respect to Petrolifera's reserves are to estimates contained in a report prepared by GLJ with an effective date of December 31, 2006 ("GLJ 2006 Report"). The GLJ 2007 Report was prepared utilizing the GLJ January 1, 2008 price forecast, effective December 31, 2007 and adjusted to Petrolifera's asset mix and specific pricing circumstances in Argentina. In the GLJ 2007 Report, future net revenue is calculated after deduction of forecast royalties, operating expenses, capital expenditures and well abandonment costs but before corporate overhead or other indirect costs, including interest and income taxes. The present value of future net revenue ("present value") is calculated by GLJ using various discount rates; this release will provide undiscounted future net revenue and the 10 percent present value thereof.

All references to barrels of oil equivalent ("boe") are calculated on the basis of 6 mcf: 1 bbl. Readers are cautioned that the conversion used in calculating barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Furthermore, boes may be misleading if used in isolation. Future net revenues disclosed herein do not represent fair market value. Also, estimations of reserves and future net revenue to be discussed in this press release constitute forward-looking information. See "Forward Looking Information" below.

Reserve Volumes and Values

The GLJ 2007 Report estimated that Petrolifera's 1P crude oil and natural gas liquids ("NGL") reserves increased 43 percent to 15.1 million barrels as at December 31, 2007, compared to 10.5 million barrels at December 31, 2006. The increase reflects exploratory success and technical revisions primarily arising from the company's capital spending and drilling program during the year. The increase occurred after record production of 2.9 million barrels of crude oil during the year. On a 1P basis, the company's reserve replacement ratio for crude oil and NGL was 2.6 times. The reserve replacement ratio percent was calculated by dividing the sum of production volumes for the year and changes to estimated reserves volumes during the year by the production volumes.

Petrolifera's 1P natural gas reserves increased 14 percent to 16.3 Bcf after the production of 0.8 Bcf and technical revisions, including provision for flared natural gas volumes, with a reserve replacement ratio of 3.5 times, calculated as indicated above.

Despite the substantial movement of probable reserves to the 1P category, Petrolifera's 2P crude oil and NGL reserves increased 10 percent to 21.5 million barrels, reflecting exploratory success. At December 31, 2007, 2P crude oil and NGL reserves were 21.5 million barrels compared to 19.5 million barrels last year. On a 2P basis, the company's reserve replacement ratio for crude oil and NGL was 1.7 times, calculated as indicated above.

On an equivalent basis, Petrolifera's 1P reserves totaled 17.8 million boe in 2007 compared to 12.9 million boe in 2006, for an increase of 38 percent. These reserves were forecast to generate $456 million of future net revenue, with a 10 percent present value of $314 million, after deduction of $18.6 million of future capital and $2.2 million of well abandonment costs. The 10 percent present value for the 2007 1P estimates represents a 27 percent increase over 2006. Reserve replacement for 1P on a boe basis was 2.6 times.

On an equivalent basis, Petrolifera's 2P reserves total 25.6 million boe in 2007 compared to 24.3 million boe in 2006 for an increase of five percent, after production of 3.0 million boe. GLJ estimates these reserves will generate $662 million of future net revenue, with a 10 percent present value of $452 million after deduction of $34.4 million of future capital expenditures and $2.8 million for future well abandonment costs. The 10 percent present value for the 2007 2P estimates represents only a one percent increase over 2006, due primarily to changes in Argentinean pricing and taxation policies during 2007. Reserve replacement for 2P on a boe basis was 1.4 times. The company's calculated reserve life index, calculated by dividing remaining 2P reserves at December 31, 2007 by 2007 total boe production, was 8.5 years.

Petrolifera also commissioned GLJ to provide an estimate of possible reserves, which were last estimated effective December 31, 2005 by another independent reserve evaluator. GLJ estimates the company's 3P crude oil and NGL reserves to be 33.5 million barrels, with natural gas reserves estimated at 33.5 Bcf and equivalent reserves estimated at 39.0 million boe. These reserves are estimated to generate $1 billion of future net revenue with a 10 percent present value of $656 million, after deduction of $72.9 million of future capital expenditures and $3.6 million for future well abandonment costs.

It should be noted that the estimate of Petrolifera's 3P reserves at 39.0 million boe is after the production of approximately 5.3 million boe in 2006 and 2007. This is the first updated estimate of possible reserves since 2005. The volume of possible reserves underscores the recognition of the development potential for both crude oil and natural gas, of the lands reviewed in the GLJ 2007 Report, which however did not include a review of the company's undeveloped exploratory concessions at Vaca Mahuida, Puesto Guevara, Puesto Morales Este and Gobernador Ayalla II, all in Argentina nor of Petrolifera's holdings in Colombia and Peru.

The following tables summarize the information contained in this press release. Tables may not add due to rounding.

<< id="1era" class="ArwC7c ckChnd">-------------------------------------------
OIL & NGLs (mbbl) NATURAL GAS (mmcf)
Reserve
Category 31-Dec-07 31-Dec-06 31-Dec-07 31-Dec-06
-------------------------------------------------------------------------
% %
GLJ GLJ change GLJ GLJ change
Proved (1P) 15,068 10,522 43 16,281 14,256 14
Probable 6,452 9,012 (28) 7,992 14,544 (45)
----------------------------------- ------------------
Proved plus
Probable (2P) 21,520 19,534 10 24,273 28,800 (16)
Possible 11,940 n/a n/a 9,187 n/a n/a
----------------------------------- ------------------
Proved plus
probable plus
possible (3P) 33,460 n/a n/a 33,460 n/a n/a
-------------------------------------------------------------------------

-------------------------------------------------------------------------
BOE's (mboe)
Reserve
Category 31-Dec-07 31-Dec-06
------------------------------------------------
%
GLJ GLJ change
Proved (1P) 17,782 12,898 38
Probable 7,783 11,436 (32)
-----------------------------------
Proved plus
Probable (2P) 25,566 24,334 5
Possible 13,471 n/a n/a
-----------------------------------
Proved plus
probable plus
possible (3P) 39,037 n/a n/a
------------------------------------------------

Petrolifera Petroleum Limited
Before Tax Present Value of Future Net Revenue (1)(2)(3)(4)
-------------------------------------------------------------------------
Before Tax Present Value at 31-Dec-07
Reserve Category Undiscounted Discounted at 10%
-------------------------------------------------------------------------
$000 $000
Proved (1P) $456,309 $314,273
Probable 205,818 137,780
----------------------------------------------
Proved plus Probable (2P) $662,127 $452,053
Possible 368,947 203,641
----------------------------------------------
Proved plus probable
plus possible (3P) $1,031,074 $655,694
-------------------------------------------------------------------------

Notes:
1) Proved reserves are those reserves that can be estimated with a high
degree of certainty to be recoverable. There is at least a 90%
probability that the actual remaining quantities recovered will equal
or exceed the estimated proved reserves.
2) Probable reserves are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
sum of the estimated proved plus probable reserves.
3) Possible reserves are those additional reserves that are less certain
to be recovered than probable reserves. There is at least a 10%
probability that the quantities actually recovered will be equal to or
exceed the sum of proved plus probable plus possible reserves.
4) Volumes, future net revenue and present value of future net revenue do
not include undeveloped land values in Argentina, Colombia or Peru.

For further information: Richard A Gusella, Executive Chairman, Petrolifera Petroleum Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@petrolifera.ca, www.petrolifera.ca

© 2008 The Globe and Mail

All together now

Monday, February 25, 2008

Zigging and zagging just isn’t what it used to be – as anyone who has seen their diversified assets rise and fall together can attest. Richard Bernstein, chief investment strategist at Merrill Lynch, has noticed this trend as well, which is why he periodically takes a look at asset correlations.

His conclusion this time around? Once again, assets that were supposed to provide the benefits of diversification by zigging when other assets zag are no longer living up to expectations. For example, non-U.S. stocks were once viewed as the ideal way to give a portfolio some zip when the U.S. market underperformed – but now they move more or less in lockstep. And hedge funds in particular just don’t cut it any more as a diversification strategy.

“Whereas hedge funds were an effective diversifying tool in the late-1990s, there is a very limited diversifying effect today,” Mr. Bernstein said in a note to clients. As of the end of January, hedge funds were 90 per cent correlated with the S&P 500, versus just 35 per cent in 2000, when they were all the rage.

However, he does offer a note of hope for investors who don’t like the idea of having all their assets moving up and down in unison: cash, high-grade corporate bonds and long-term U.S. Treasury bonds.

“Thus, equity investors should probably look at bonds and cash as powerful diversifying assets in the same way they looked eight years ago at hedge funds and non-US stocks,” he said.

For Canadian investors, there is another note of hope: Among sectors, energy stocks now have the lowest correlation with the S&P 500.

Thursday, February 21, 2008

Why the Commodities Supercycle Just Got Longer

Mining analysts miss mark on predictions

Ernst & Young LLP

The latest report from ERNST & YOUNG says most mining analysts have missed the mark by repeatedly predicting a sharp decline in metal prices. Here's a summary of what the authors observed:

Contrary to the continued assertions of mining analysts, current metal prices are actually a return to sustainable price levels following an extended period of artificially depressed prices. While analysts are wary of straying too far from the comfort zone of historic averages, the mining companies by their actions are taking a far more realistic view.

There are three underlying reasons for the analysts' errors.

1) Research shows that analysts' short-term metal price forecasts since the beginning of 2005 have been significantly adrift of where prices have actually settled, by anywhere between 20% and 200%. The result? Most mines and mining companies have been materially undervalued.

2) More often than not, significant premiums have been paid over market prices. Over US$100 billion have been spent on the recent takeovers of Falconbridge, Inco, Phelps-Dodge and Alcan, as the key players fight it out for control of low-cost production across the globe.

3) Research shows mining companies that have pursued growth through acquisitions have consistently outperformed those that have chosen to grow organically.

The Ernst & Young team studied metal prices over more than a century, highlighting a number of periods that have been interpreted as cycles in the mining industry. The study shows that specific reasons were behind most of these cycles, which are unlikely to be repeated in the near future. For example, weak prices in the 1990s resulted from a collapse of the Soviet Union, triggering the release of 50 years of accumulated stockpiles of minerals alongside a sharp reduction in domestic demand in the CIS. Layered on top of traditionally recognized economic cycles are major developments such as the industrial revolution, the rise of the U.S. economy, the Cold War, the collapse of communism, and, now, the industrialization of China and other emerging markets.

Source

Why the Commodities Supercycle Just Got Longer
By Andrew Mickey, Small-Cap Commodity Prospector

Saturday Dec 15, 2007

The term “supercycle” has been batted around the commodities world for a couple of years now. To be honest, the term just reminded me of the dot-com days when we invented new terms and valuation techniques like price-to-eyeballs that allowed us to justify valuations that we now realize were completely absurd.

As a result, I wasn’t willing to recommend going headlong into the commodities market. There were bound to be a few isolated opportunities in the sector as we neared the end of the commodities cycle.

One-hundred dollar oils and sky-high commodities prices would eventually prove to be a drag on the world economy and commodity prices would fall due to lowered demand from a world economy that isn’t growing quite as fast. It’s Adam Smith’s invisible hand at work.

But that all changed three weeks ago when a company in British Columbia, NovaGold (NG:AMEX) shocked the commodities world. NovaGold and its partner, Teck Cominko (TKC:NYSE), announced they would shutting down operations in Galore Creek copper-gold-silver project in northwestern British Columbia.

Galore Creek was supposed to be one of the largest new mines in the world. It was expected to be so profitable that building a new road, a new power plant and all the other infrastructure necessary for a mine would be more than offset by the value of the mine’s production.

It was so valuable that NovaGold was able to contract two of the world’s largest helicopters to transport large earthmoving and construction equipment into the remote Galore Creek region. That was how value the property was. Trucks and bulldozers were actually flown in while the road was being built.

The size and value of the project was more than offset the initial capital costs, which were slated to come in at about $2 billion. But it wasn’t long until the costs started getting really out of hand. As the Canadian dollar rose in value, costs of putting the mine into production soared to an expected $5 billion and the expected profit margins from the mine shrank.

With a $5 billion cost necessary to get the mine up and running, it just didn’t make sense economically. So it was shut down midstream.

On top of that, Teck Cominco, which was funding a large portion of the capital costs out of its own pocket, already saw the costs at its other projects soar. In fact, it was already spending more than 150% of what originally had budgeted in 2007. And that increase was just necessary to keep on line with its timelines and projections.

Over the past weeks, I’ve been crisscrossing Vancouver, visiting dozens of mining companies, and there is only one focus: capital costs. Since many advance-stage projects have to raise a few hundred million dollars to go into production or close down altogether, we’re at a major turning point in the current commodities up cycle.

There is one top consideration that has to be made when choosing mining stocks: capital costs. Early-stage exploration is still going to have some big winners, but anything that’s been around for a few years is going to have to go big or go home.

So what does all this mean? First, it confirms the commodities supercycle. The high capital costs are going to delay a lot of projects that were scheduled to go into production and bring more supply of copper, nickel, molybdenum, oil… pretty much every commodity.

However, a lot of exploration companies are going to experience what NovaGold has gone through in this commodities cycle, which is already going to be a long one -- and could even be longer than we ever expected. Sure, at Small-Cap Commodity Prospector we’ll have to be even more selective. We’ve got the wind at our backs with news like this.

The commodities bull market has even more years left in it now. As expenses continue to rise and reduce the number of economically viable projects, the commodities sector is going to be one of the top places to have your money.

Source

Wow Volume For BWR Houses BUY + Sells

Breakwater Resources Ltd.'s Year-End 2007 and Fourth Quarter Financial and Operating Results Conference Call

12:23 EST Wednesday, January 30, 2008

TORONTO, ONTARIO--(Marketwire - Jan. 30, 2008) - Breakwater Resources Ltd. (TSX:BWR) will webcast, on a live, listen-only basis, its conference call with its analysts covering the year-end financial and operating results for the period ended December 31, 2007, on Friday, February 29, 2008 commencing at 10:00 a.m. (ET). The call will be hosted by George Pirie, President and Chief Executive Officer. You are cordially invited to listen to the webcast through http://services.choruscall.com/links/breakwater080229.html. After the broadcast, an archive of the webcast will be available at the same URL, posted on the Company's website at www.breakwater.ca and available by digital playback until 6:00 p.m. (ET) on Friday, March 7, 2008 by dialing 1-800-319-6413 (Canada and USA) or 1-604-638-9010 (outside of Canada and USA). Interested persons who are unable to connect to the webcast can listen to the conference call by dialing 1-800-319-4610 (Canada and USA) or 1-604-638-5340 (outside of Canada and USA).

The Company's news release covering its year-end financial and operating results will be released after regular trading hours on Thursday, February 28, 2008 and will be available on the Company's website at www.breakwater.ca.

The scheduled speakers on the conference call will be George Pirie, President and Chief Executive Officer; Dave Langille, Vice-President, Finance and Chief Financial Officer; and Steve Hayes, Vice-President, Commercial.

FOR FURTHER INFORMATION PLEASE CONTACT:

Breakwater Resources Ltd.
Ann Wilkinson
Vice President, Investor Relations
(416) 363-4798 Ext. 277

Email: AWilkinson@breakwater.ca
Website: www.breakwater.ca

Thu Feb 21 2008 15:00:41 GMT-0500 (Eastern Standard Time)

Wednesday, February 20, 2008

PDP press reports have misrepresented the actual events

Petrolifera secures new Puesto Morales Este contract

2008-02-20 15:55 ET - News Release

Mr. Richard Gusella reports

PETROLIFERA PETROLEUM LIMITED SECURES PUESTO MORALES ESTE CONCESSION IN ARGENTINA; DRILLING ALREADY UNDERWAY

Petrolifera Petroleum Ltd. has secured a new contract over the Puesto Morales Este concession in the province of Rio Negro, Argentina.

The PME concession covers an area of 12.8 square kilometres (3,163 acres or approximately five sections) and is situated east of and is contiguous with the southeastern portion of the company's Puesto Morales block in the Neuquen basin, Argentina.

The negotiated contract is a one-year exploration licence between the Argentinean branch of the company's subsidiary, Petrolifera Petroleum (Americas) Ltd. and Edhipsa, the provincial oil company of Rio Negro. The exploration licence can be converted into a 25-year production licence upon the establishment of commercial production. The royalty rate has been established at 24 per cent.

Under the terms of the contract, Petrolifera is committed to the drilling of a minimum of two exploratory wells, each to a minimum depth of 1,500 metres, additional optional 3-D seismic and other obligations, including some agreed training costs for Edhipsa personnel. The total amount of the negotiated work commitment has been calculated at $10.6-million (U.S.).

Petrolifera advised that drilling is already under way on a seismically defined structure on the block. The PME X-1001 well, which is currently at a depth of 189 metres, is targeted to be drilled to a projected total depth of 1,640 metres to evaluate various formations, including the Sierras Blancas formation, which is the prolific producing zone at Puesto Morales Norte.

We seek Safe Harbor.

And This:

Petrolifera Petroleum Clarifies Press Reports Concerning Ucayali Block 107 Seismic Activity in Peru

cnw

CALGARY, Feb. 20 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) wishes to clarify certain press reports with respect to suggestions that its seismic program on Block 107 in the Ucayali Basin, onshore Peru, is infringing on reclusive members of the Cacataibo tribe who inhabit the region.

During late January 2008, a member of the survey crew employed by the geophysical contractor being utilized by Petrolifera Petroleum del Peru SAC, the company's Peruvian subsidiary, noticed certain markings on a tree in proximity to where activity was being conducted. In accordance with the company's protocol, the sighting was immediately reported to the company's Lima office and it was also immediately brought to the attention of an anthropologist contracted by Petrolifera to deal with matters of this nature. It should be noted that there were no other elements - fire remains, human signs, or materials - in evidence at the time of the sighting or in the vicinity of the sighting, nor have there been subsequent thereto.

The marks on the tree have been evaluated by a competent authority and this authority has concluded that it is impossible to deduce that the marks were made by the isolated indigenous Cacataibo tribe members. The analysis provided to Petrolifera also states that this occurrence should be viewed as an isolated event and in the absence of other evidence, there is insufficient evidence to suggest any proof of the presence of the isolated Cacataibos.

In accordance with its protocol, Petrolifera has reported the matter to the appropriate Peruvian authorities and provided logistical support to these authorities for a visit to the area for a two day scouting trip, which was successfully conducted last week. Petrolifera has established and is maintaining a sound relationship with the Cacataibo people and is proceeding with its program as scheduled. The company is also employing local indigenous people to the extent possible to assist it in its program.

The initiation of the program followed a series of workshops and community meetings with all indigenous people in the area covered by block 107 and the approval of an extensive and thorough Environmental Impact Assessment or EIA prior to the initiation of activity.

Certain press reports have misrepresented the actual events surrounding the sighting and certain other agencies and non-governmental organizations or NGO's have contacted Petrolifera in respect of this matter, expressing concerns based on misinformation. It is the intention of this press release to provide factual information to the public and to these agencies.

Petrolifera Petroleum Limited is a Calgary-based crude oil and natural gas exploration, development and production company active in Argentina, Colombia and Peru.

For further information: Richard A. Gusella, Executive Chairman, Petrolifera Petroleum Limited, Phone (403) 538-6201, Fax (403) 538-6225, Inquiries@petrolifera.ca, www.petrolifera.ca

© 2008 The Globe and Mail

Tuesday, February 19, 2008

Jennings : Feb 1st Update PDP Target 17.40

Breakwater + Midland Exploration Starts Drill

Midland Exploration Inc.: Drill Program Commences on Maritime Cadillac Gold Property

ccnm

MONTREAL, QUEBEC--(Marketwire - Feb. 19, 2007) - Midland Exploration Inc. ("Midland") (TSX VENTURE:MD) is pleased to announce the start of a drilling program on its 100%-owned Maritime Cadillac Property. The Maritime Cadillac Property is contiguous to the Lapa gold mine property (1.15 million ounces of gold in proven and probable reserves), which will go into production in early 2009.

The project, operated by Agnico-Eagle, will include 8 holes totalling 3,000 metres of drilling. These drillholes will test the talc-chlorite schist horizon (Piche Group) that hosts the Lapa ore deposit. Two drillholes will test the south extension of the Zulapa gold deposit (mined from 1938 to 1943 and where 346,000 tonnes were extracted at 4.3 g/t). Three drillholes are planned to test the depth extension to the north of the Maritime Cadillac gold deposit(historical value up to 17.7 g/t /7.70m), located in the centre of the property. Finally, two drillholes will test two unexplained induced polarization (IP) anomalies located approximately 200 metres northeast of the Maritime Cadillac deposit and along the favourable contact between the Piche and Cadillac groups.

The Maritime Cadillac Property is well located in the eastern part of the Cadillac mining camp, south of the Lapa gold mine. The presence of major lithological contacts (Pontiac-Piche-Cadillac) within the deformation zone associated with the Cadillac-Larder Lake Break provides a highly prospective setting for lode gold or disseminated gold deposits.

Agnico-Eagle signed an option agreement on June 1, 2006, to acquire a 50% interest in the Maritime Cadillac Property by investing $1,000,000 in exploration and by making payments totalling $100,000 over a 3-year period. The company will have the option to increase its undivided interest in the Property from 50% to 65% over a period of 3 years, by solely financing a bankable feasibility study on the Maritime Cadillac Property, or by solely assuming all mining operations on the Maritime Cadillac Property, earning 1% additional interest for every $1,000,000 spent on the property (up to 15% by spending $15 million).

About Midland Exploration

Midland's strategy to discover new world-class gold, base metal, and uranium deposits is based on Quebec's excellent mineral potential and favourable investment climate. Midland is proud to work with reputable partners such as Agnico-Eagle Mines Limited, Breakwater Resources Limited, Soquem Inc. and Quest Uranium Corporation. The Company quickly implemented its business plan during the second half of 2007, by signing four important agreements totalling nearly $16,000,000 in work commitments and $1,000,000 in payments over four years. Management is currently considering other opportunities and other projects in order to expand the Company's portfolio. Midland prefers to work in partnership and intends to quickly secure new agreements to this effect for its newly acquired properties.

Gino Roger, P. Eng., is the qualified person who has reviewed the content of this news release.

FOR FURTHER INFORMATION PLEASE CONTACT:

Midland Exploration Inc.
Gino Roger, President and Chief Executive Officer
450-420-5977

450-420-5978 (FAX)
gino.roger@midlandexploration.com
www.midlandexploration.com

eviewed and does not accept responsibility for the adequacy or accuracy of this release.

Copyright 2001 The Globe and Mail

Consumer weakness challenges markets

Indices strive to retain recent gains amid flurry of bleak economic news

February 19, 2008

Stock markets are in for a challenging week as indices trade above January lows, despite growing signs of weaker consumer demand.

"The evidence is starting to look pretty good that those late January lows have a good chance of holding," said John Johnston, chief strategist at RBC Dominion Securities' Harbour Group in Toronto.

"But we're probably going to be in a long, grinding base-building pattern with the risk of new lows because the 20 per cent bear market decline we've seen in the S&P 500 is very much like the '90-'91 bear market, which was a 20 per cent decline and a similar credit background."

Yesterday, European stocks rose on speculation about possible new investment in the banking sector, while Asian markets were mixed and North American exchanges closed for holidays.

London's benchmark FTSE 100 rose 2.75 per cent to 5,946.6, while Germany's DAX index gained 2 per cent to 6,967.55 and the Paris CAC 40 added 1.9 per cent to 4,861.80.

"It seems to be a combination of factors," said Keith Bowman, a broker at Hargreaves Lansdown Stockbrokers in London. "There was press speculation over the weekend that banks reporting this week may raise their dividends and possibly sovereign investment funds will increase their investments."

U.S. financial markets observed Presidents Day, while the TSX and TSX Venture Exchange were shut for Ontario's first Family Day.

North American stock markets eked out a slight gain last week despite a litany of more bad news. The TSX is 8.9 per cent above its Jan. 21 low while the Dow is still up just over 3 per cent from its most recent low the following day.

Last Thursday, U.S. Federal Reserve chair Ben Bernanke told the Senate Banking Committee that business prospects have worsened and predicted the economy will grow at a "sluggish" pace before recovering later in the year and that banks' mortgage investments could lose more value.

And the next day, worries about the ability of consumers to hold out deepened after the University of Michigan consumer sentiment survey for January came in at 69.6 – much lower than the expected reading of 78.

"The consumer is softening here and this drop in sentiment tells me that it tracks quarterly spending growth pretty well and it's telling us the consumer is very soft," said Johnston.

"And when you look at it, their asset prices are falling – housing, now their equity portfolios are down, gasoline prices are up, OPEC is talking about cutting production and a lot of people still have jobs, but they're more nervous," he added.

Adding to investor woes was an announcement from consumer-electronics retailer Best Buy, owner of the Future Shop chain, that it will earn less than expected in fiscal 2008 due to weak January sales.

There was some good news at the end of the week.

"The labour market isn't crumbling like it often does when you seem to be sliding into recession," Johnston noted. "Like those jobless claims, usually in this kind of environment we would be spiralling towards 400,000 (a week). Now, they're just kind of meandering up towards 400,000 right now."

Quick action by the U.S. Federal Reserve Board to cut interest rates has also buoyed markets since the January trough. The central bank has cut its key funds rate by 1.25 percentage points since then and Bernanke reassured investors the Fed would cut as warranted.

Japanese stocks were flat yesterday, while Hong Kong shares sank amid concerns about further monetary tightening in China.

But Chinese stocks jumped after securities regulators approved new wealth management operations, regarded as likely to increase sales of shares to the public. The Shanghai composite index gained 1.58 per cent to 4,568.15.

Tokyo's Nikkei index edged up 12.84 points to 13,635.40. Market observers said it may take a while for the Nikkei to resume a stable upward trend even though current levels are above the January lows.

Hong Kong's blue-chip Hang Seng index lost 1.6 per cent to 23,759.25, after gaining 6.8 per cent in the previous four sessions.

Analysts said traders were cautious due to concerns about the U.S. economy. The latest inflation data for the U.S. is due next week, but Johnston doesn't think they will derail rate cut expectations.

"The big issue for most people is the economy – inflation is not the main issue right now," he said.

"The issue is how you manage inflation after the economy turns around."

From the Star's wire services

Monday, February 18, 2008

Bank of Canada Governor hints at rate cut

Derrick Penner

Vancouver Sun

Monday, February 18, 2008

VANCOUVER - Newly minted Bank of Canada Governor Mark Carney, in his first official speech Monday in Vancouver, carefully avoided straying from recent bank statements about the Canadian economy and instead talked about the growing force of globalization.

On the domestic front, Carney, speaking to a joint B.C. Chamber of Commerce and Business Council of B.C. audience, reiterated the bank's opinion that the U.S. economy will slow in 2008 and gradually recover after that.

He added that the Bank of Canada may need to respond with further cuts in the bank's key overnight interest rate, which stands at four per cent, beyond the quarter-point reductions in December and January.

"As I said recently, the timing and degree of that stimulus will be determined at future fixed announcement dates after we have conducted a thorough analysis of, and applied our judgment to, all information available to us at that time."

Carney, during a news conference, added that Canada will feel effects from the tightening of credit markets in the slowing U.S. economy.

However, he added that the Canadian economy is still in a position of "operating above its production capacity," largely because of strong domestic demand.

In his speech, Carney said domestic demand is being supported by increasing Canadian real incomes, which stem from gains in Canada's terms of trade with other countries, which in turn has been driven by globalization.

"The evolution of our terms of trade will depend importantly on demand from major emerging markets," Carney said.

"The impact from our terms of trade is one factor that could lead to stronger domestic demand growth than we had assumed," which will be a development the bank will "continue to watch closely."

Generally, Carney said Canada has "adjusted well" to big swings in its terms of trade while enjoying the benefits of globalization.

"The challenge for policy makers is to ensure that the benefits of globalization are maximized and widely shared," Carney added. "From the Bank of Canada's perspective, our challenge is to understand the various ways in which globalization affects both financial stability. . . and inflation."

depenner@png.canwest.com

"We had to intervene here, because if we let this bank fail there was every chance ... the problems would have spread into the wider British banking

Britain nationalizes Northern Rock bank

Northern rock facts

Formed in 1965 as a merger of the Northern Counties Permanent Building Society, established back in 1850, and Rock Building Society.

Based in Newcastle, in Britain's northeast, Northern Rock is the country's fifth largest mortgage lender, accounting for one in 13 U.K. home loans.

Has 76 branches and employs just more than 6,000 staff. Before a run on the bank in September, it had about 1.4 million savers, some 800,000 mortgage customers and assets totalling 113.5 billion pounds ($223.1 billion).

U.K. government unable to find suitable buyer for lender hammered by U.S. subprime credit crisis

February 18, 2008

Sumeet Desai
Marc Jones
Reuters News Agency

LONDON–Britain decided to nationalize Northern Rock yesterday, abandoning a five-month attempt to snare a private sector buyer for the ailing bank and piling more pressure on Prime Minister Gordon Brown.

It's the first major nationalization in Britain since the 1970s.

Britain's fifth-largest mortgage lender has borrowed 25 billion pounds (about $49 billion) from the Bank of England since its funding model collapsed in the credit crisis last year, sparking the first run on deposits at a British bank for some 140 years.

The Northern Rock debacle has become a major headache for Brown and his finance minister Alistair Darling, tarnishing the Labour government's popularity and denting the prime minister's reputation for being a guardian of financial stability.

Darling told a hastily arranged news conference that nationalization would be temporary and the bank would be returned to the private sector when markets stabilized. But it was the best option for protecting taxpayers.

"Market conditions will improve. Northern Rock's mortgage book is good but I think it would be a mistake for us to abandon this asset and take a loss now," he said.

"We had to intervene here, because if we let this bank fail there was every chance ... the problems would have spread into the wider British banking system," he said.

The mortgage lender already has been put on the government's books, classified as around 90 billion pounds of public debt.

The government will put forward legislation today to take the bank into public hands and trading in Northern Rock shares was suspended.

The opposition Conservatives said they opposed the move. "This is a day when Labour's reputation for economic competence died," Conservative spokesman for economic affairs George Osborne said. "We will not back nationalization. We will not let Gordon Brown take this country back to the 1970s."

Brown, who helped transform the Labour Party in the 1990s by ditching its previous attachment to state-ownership, is to hold a news conference at 11:00 GMT this morning.

Brown is now staking his reputation on markets returning to normal. The risk is that with the economy and housing market slowing and some banks still to reveal the full impact of the credit crunch on their balance sheets, Northern Rock's huge mortgage portfolio may struggle to find a buyer.

Day-to-day running of Northern Rock will now pass to Ron Sandler, a respected troubleshooter who rescued Lloyd's of London from the brink of collapse.

Sunday, February 17, 2008

Canada Pension Plan sustainable for 75 years

Future looks good for Canada's CPP

Canada Pension Plan sustainable for 75 years and beyond, thanks to Paul Martin's measures

Feb 07, 2008 04:30 AM

Beth Marlin
Special to the Star

Relax. There's no reason to worry about your CPP during these volatile days of wildly fluctuating stock markets and the subprime mortgage crisis.

The CPP is in the safe hands – its $121.3 billion carefully vested on behalf of 17 million working and retired Canadians and for generations to come.

But that wasn't always the case.

Canadians have former prime minister Paul Martin to thank for the restored viability of the country's state-administered pension plan, says Bill Robson, president and CEO of the C.D. Howe Institute.

"He's (Martin's) never been properly recognized for this," says Robson. "The reforms have worked very well so far."

In 1996, the CPP was headed for certain disaster, taking in only $11 billion in contributions that year, while paying out a whopping $17 billion in benefits. With large numbers of aging baby boomers set to retire by 2011, actuaries projected Canada's pay-as-you-go fund would be unable to fully pay benefits by 2015.

It was Martin who had the prescience and political fortitude to launch revolutionary CPP reforms – dramatically increasing contribution rates, reducing some benefits and separating CPP monies away from government assets for investment by an independent board – and who was able to commandeer the necessary co-operation of most provinces. Parliament passed new legislation in late 1997 that took effect in 1998. Quebec has opted to administer its own pension plan, which has not fared as well financially as the CPP.

Since 1997, CPP contributions have gradually increased by 80 per cent, from 5.6 per cent of earnings to a maximum 9.9 per cent, shared equally by employees and their employers.

In 2008, working Canadians and their employers will pay a shared CPP levy of up to 9.9 per cent on earned income up to $44,900, with employees paying a maximum annual levy of $2,049.30 after a personal exemption of $3,500, an amount matched by their employers. Self-employed Canadians must contribute the full levy to a maximum of $4,098.60.

"Canadians have no need to worry," says Ian Dale, a spokesperson for the Canada Pension Plan Investment Board, the Toronto-based arms' length agency set up in 1998 to administer the fund independent of political interference.

"The Canada Pension Plan is sustainable for 75 years and beyond, according to the (federal government's) chief actuary. There are all kinds of safeguards in place to make sure these funds are there to pass to pensioners and for investing the fund only for their benefit."

The CPP contribution rate has been capped at 9.9 per cent, with no further increases expected for 75 years, says Dale.

"(The CPP) is self-sustaining at 9.9 per cent of earned income."

In fact, benefits paid out by the CPP are fully funded by incoming contributions, leaving invested funds untouched, until the year 2020.

Further amendments introduced by Bill C-36, which came into force on Jan. 1, 2008, assumes steady-state financing, rather than the prior pay-as-you-go funding to build a reserve equivalent to 58 years of benefit payouts. This pre-funding of the plan by soon-to-retire boomers will ease the burden on upcoming generations, says Dale, noting that the legislative amendments require that any new or increased benefits must also be fully funded.

More importantly, perhaps, Martin's reforms ensured the CPP monies were separated from government assets and managed by an independent investment board.

That means the federal government cannot be tempted to borrow from surplus funds, for instance, as it has done from surplus revenue collected through Employment Insurance premiums or as governments in other countries have done with national pension funds.

As of January 2008, the maximum Canada Pension Plan benefit to someone aged 65 is $884.58. The basic Old Age Security, paid to people 65 years of age and over, will remain unchanged at $502.31 per month.

Guaranteed income supplement for eligible low-income pensioners is $634.02.

While the troubled, stubbornly independent Quebec Pension Plan may well be praying for a financial bailout from the separately managed CPP, as suggested by pundits in recent news reports, the federal reforms mean that is as likely to happen as amending the Constitution – requiring the agreement of two-thirds of 10 provinces, constituting two-thirds of Canada's population.

However, Robson says Canadians must remain vigilant to ensure the monies vested with the CPP don't become politicized.

One of the reasons the Quebec Pension Plan is now in financial difficulty and may not be sustainable at the 9.9 per cent contribution rate, is the province has unwisely used some pension funds to invest in its industrial policy, So far, the CPPIB has made great strides from 1999, when all extra CPP funds were invested only in federal and provincial bonds, earning a steady, but unexciting rate of return significantly lower than returns of stock market indices.

Today, more than half of the fund – 56.5 per cent or $68.5 billion – is invested in stocks of more than 1,900 international and 700 Canadian publicly listed companies, with other investment in private equities, real estate and inflation-linked bonds. For more information on the CPP, go to www.cppib.ca, the website of the Canada Pension Plan Investment Board.

Ensuring your pension won't come up short

February 17, 2008

Ellen Roseman

In her book, The New Retirement, economist Sherry Cooper delivers bad news to affluent boomers who expect to live well after they leave work.

Her message: You haven't saved enough. You have to save a lot more.

"Roughly 41 per cent of Canadian households earning $75,000 a year or more might not be able to replace two-thirds of earnings," she says.

"And a whopping 55 per cent of Canadian high-income households have not saved enough to replace 80 per cent of their employment income."

She's talking about the fact that government pensions (Canada Pension Plan and Old Age Security) were never intended to maintain your living standards after retirement.

The richer you are, the more you will need to rely on employment pensions or your own savings.

But not all pension plans are the same. The traditional defined benefit (DB) plan, which covers 33 per cent of Canadian workers, is more valuable.

With a DB plan with inflation protection and long service with your employer, you have no reason to worry.

But if you have a defined contribution plan, watch out. You're unlikely to achieve the same level of financial health in your retirement as a DB plan member.

She gives the example of two people, Dick and Jane, starting their careers at age 25 and planning to retire at 65.

Their starting salaries are $40,000 a year, increasing at a rate of 2.5 per cent a year, and their average annual income over their last five working years is $102,290.

Dick is employed by a bank and covered by a DB plan. He contributes 2 per cent of his salary each year and gets an annual retirement benefit of $51,145.

According to financial planners, it would take 20 times the annual payment – or $1.02 million – to generate an annual income of $51,145 for an indefinite period into the future.

Jane works for an investment bank and has a DC plan. She puts 2 per cent of her income, as Dick does, into a registered retirement account to get a 2 per cent matching contribution made by her employer.

For her workplace savings to reach the same imputed value of $1.02 million, Jane would have to get an average annual return of 10 per cent during her working years.

"This is not likely," says Cooper, who's chief economist at BMO Capital Markets.

Assuming a more realistic 5 per cent return, Jane would have to contribute much more each year to bring her DC plan up to $1.02 million at retirement.

In fact, she has to save an extra 9.8 per cent of her income – on top of the 2 per cent contribution she already makes – to get the matching contributions from her company.

"This, too, is very difficult," says Cooper.

"Saving 11.8 per cent of gross income is quite a hefty chunk. Whichever way you look at it, the DB plan is very valuable, far more so than the DC plan."

The prospect of coming up short is even more acute if you go into retirement without having paid off your mortgage.

Owning your own home makes a big difference, since it's assumed that one-half of the home equity is an asset from which you can generate retirement income.

Cooper's book has hit a nerve (for a contrary view, see "An" below). She's on the bestsellers' list and she's speaking across the country.

Her conclusion: If you're a high-income earner without a good pension plan, you have to save more and invest wisely.

Investing wisely means holding 45 to 65 per cent of your portfolio in stocks – both before and during retirement.

This increases the chance of your money lasting as long as you do, which could be 30 years or longer.

Ellen Roseman's column appears Wednesday, Saturday and Sunday.

Thursday, February 14, 2008

Fed chairman Ben Bernanke gave his thoughts on the U.S. economy.

Back to the future

RTGAM

Even rising gold and oil prices were not enough to rescue Canadian stocks from the widespread downturn that whacked North American stocks on Thursday, when Fed chairman Ben Bernanke gave his thoughts on the U.S. economy.

Needless to say, those thoughts were not exactly upbeat and they underlined the growing feeling among observers that a U.S. recession is unavoidable, regardless of the occasional tidbit of good news - such as strong Japanese growth - that hints otherwise.

"A recession in the U.S. seems to be a done deal," said Tobias Levkovich, chief U.S. equity strategist at Citigroup, in a note. "There seems to be a very high probability of economic recession, with slipping jobs data, limited credit availability, weak retail chain-store sales reports, and a surprising fall-off in the ISM non-manufacturing index."

His one shot of hope? Given that the S&P 500 fell about 19 per cent from its October 2007 high to its January 22 low - which is consistent with the declines associated with the average recession - there is a reasonable chance that most of the damage to the stock market has already been done. That is, if this is an average recession that is brewing, which is the subject of some debate.

In Canada, the peak-to-trough decline was 17 per cent. However, the S&P/TSX composite index has since rebounded nearly 9 per cent from its trough in January, which means that stocks are either in the midst of a recovery or about to take a second downward dip.

Investors on Thursday appeared to be betting on another dip. The Canadian benchmark index closed Thursday at 13,208.03, down 74.27 points or 0.6 per cent. Crude oil shot up to US$95.27 a barrel in New York, up $2, and gold rose to $908.30 an ounce, up $1.70 - but the commodities boost did little for most areas of the market, despite Canada's exposure to them. Of the 254 stocks in the index, 144 fell, led by financials.

In the United States, the Dow Jones industrial average tumbled 175.26 points or 1.4 per cent. It closed at 12,376.98, dragged down by 29 of the 30 stocks that make up the blue-chip index. The broader S&P 500 closed at 1348.86, down 18.35 points or 1.3 per cent, with 444 of the 500 stocks down for the day.

Copyright 2001 The Globe and Mail

Has Corridor Bottomed?

What is Going On With Zinc???

China copper, zinc firms restore operations

Chinese metals producers, including Jiangxi Copper and Hunan Nonferrous Metals have started to restore operations after severe snowstorms in China forced them to scale back production, a Hong Kong newspaper reported on February 13.

More than 80% of output capacity of Jiangxi Copper`s mines had resumed by February 12, the South China Morning Post quoted Pan Qifang, company secretary of China`s largest integrated copper producer, as saying.

The company`s smelters had yet to resume full operations due to transport problems and were running at 60 to 70% of normal levels, Pan said, adding it was hard to predict when operations would be fully restored.

Hunan Nonferrous Metals Corp`s Zhuzhou plants had returned to full capacity since power supplies resumed in the past few days, while plants in other areas in Hengyang and Chenzhou were expected to restart as soon as power supplies were restored, the newspaper quoted Chen Zhixin, chief financial officer of China`s largest zinc and tungsen producer, as saying.

Snow and ice storms across southern and central China have brought the coldest weather in 50 years to Hunan. The weather has disrupted the transportation of coal and downed power lines.

Last week, Jiangxi Copper said snowstorms in the southern part of China had a significant impact on production, as at least half of production activities of its copper mines in Jiangxi province had ceased.

Wednesday, February 13, 2008

Pescod Tonight

Virginia Mines To Spend About C$30M On Exploration Work In 2008

Virginia Mines To Spend About C$30M On Exploration Work In 2008

djones

DOW JONES NEWSWIRES

Virginia Mines Inc. (VGQ.T) plans to spend C$30 million in 2008 to launch its
"most active drill and exploration programs ever" on its James Bay projects.

The Quebec City mining exploration company said C$20 million will be spent on
the Coulon joint venture project with Breakwater Resources Ltd. (BWR.T),
including 70,000 meters of diamond drilling and a geophysical survey.

The company said the C$10 million balance will be spent on many other
projects.

It also said that, in partnership with the Societe d'exploration miniere Vior
inc., it has entered an agreement to sell a 100% interest in 297 jointly owned
claims to Northfield Metals Inc. in exchange for 500,000 Northfield common
shares, of which Virginia will get 250,000 shares.

(END) Dow Jones Newswires
02-13-08 0955ET
Copyright (c) 2008 Dow Jones & Company, Inc.

Copyright 2001 The Globe and Mail

Tuesday, February 12, 2008

Pescod picks

Warren Buffett, the world's greatest investor makes his move

Buffett makes his move

RTGAM

Warren Buffett, the world's greatest investor and the one person who can seemingly move markets with a quick telephone call, was at the forefront of stock market activity on Tuesday morning after he offered a second level of insurance to troubled bond insurers MBIA Inc., Ambac Financial Group Inc. and FGIC Corp. If the rescue effort - worth up to $800-million (U.S.) - is accepted, it could give the insurers a AAA credit rating.

His move, reported by CNBC after he called the station's Squawk Box, acted like a vote of confidence for investors, who rallied stocks higher in Europe and pushed up stock index futures for major U.S. stock market indexes. In Europe, major indexes were up nearly 2 per cent. The U.K.'s FTSE 100 was 1.8 per cent in afternoon trading (local time), led by banking giant HSBC Holdings PLC. Germany's DAX index was up 1.9 per cent.

In the United States, S&P 500 futures rose 0.6 per cent. Meanwhile Japan's Nikkei 225 was relatively flat in overnight trading and Hong Kong's Hang Seng index was up 1.4 per cent.

In Canada, investors will likely be reacting to the Buffett news when markets open, even though Mr. Buffett has supposedly received . But this will also be digesting Monday's BlackBerry service interruption, which may weigh on Research In Motion Ltd.

Copyright 2001 The Globe and Mail

BWR+ Hudbay= Top Picks

UBS has a "neutral" rating on Inmet with a share price target of $86 (Canadian). Among the copper and zinc producers, it rates HudBay Minerals Inc. and Breakwater Resources Ltd. as "top picks." Both are projected to have cash balances in excess of 30 per cent of their current market capitalization by the end of 2008, UBS said.

Inmet profit expected to dip

RTGAM

Here's Allan Robinson's At The Bell which you'll find in tomorrow's newspaper:

The share price of Inmet Mining Corp. has slumped as investors worry about the prospects of a global slowdown, although base metal prices remain healthy and cash balances in the sector continue to build.
Inmet, which mines copper, zinc and gold, is scheduled to release its fourth-quarter results today.

Analysts forecast that it earned $1.92 a share, down from $2.02 a year earlier, according to Thomson First Call. The company's 2007 profit is estimated at $9.23 a share.

Inmet's shares closed yesterday at $66.29 on the S&P/TSX. Its market capitalization is $3.25-billion and at last report it had $815-million in cash, or $16.88 a share.

What to keep an eye on

Inmet's results are expected to be adversely affected by the strong Canadian dollar and a steep drop in the price of zinc, which traded yesterday at $1.11 (U.S.) a pound, down from $1.40 in October.

"Beyond the financial results, analysts will continue to focus on the ramp-up schedule for the Cayeli mill expansion [in Turkey] and the status of construction at Cobre Las Cruces [in Spain]," said UBS Securities Canada Inc. analyst Tony Lesiak.

Inmet and its partners are also reviewing the Petaquilla copper project in Panama after the latest budget forecast the capital cost had doubled to $3.5-billion. Inmet mines gold at the Troilus mine in Quebec and owns 18 per cent of the Ok Tedi copper mine in Papua New Guinea, and operates the Pyhasalmi copper and zinc mine in Finland.

UBS has a "neutral" rating on Inmet with a share price target of $86 (Canadian). Among the copper and zinc producers, it rates HudBay Minerals Inc. and Breakwater Resources Ltd. as "top picks." Both are projected to have cash balances in excess of 30 per cent of their current market capitalization by the end of 2008, UBS said.

The average share price target among 12 of the 14 analysts following Inmet is $90.89 a share, according to Bloomberg.

The big picture

World demand for metals remains strong and that is resulting in high metal prices, which are needed to justify new projects, said Martin Murenbeeld, chief economist for Dundee Wealth Management Inc.

"Accordingly, central banks run serious risks by tightening monetary policy in hopes of suppressing the rise in commodity prices," he said.

Copyright 2001 The Globe and Mail

Monday, February 11, 2008

Pescod Talks Zinc And More

Stocks boosted by tech, energy

Rising energy prices and renewed interest in technology stocks propelled North American stocks higher Monday, shaking off some early doldrums and trumping continued credit-market worries.

The Toronto Stock Exchange's S&P/TSX composite index rose 141.58 points, or 1.1 per cent, to 13,130.92, closing above the 13,000 mark for the first time in a week. In New York, the Dow Jones industrial average moved into positive territory after a down morning to close up 57.88 points, or 0.5 per cent, at 12,240.01. The S&P 500 gained 7.84 points, or 0.6 per cent, to 1339.13, while the tech-heavy Nasdaq composite rose 15.21 points or 0.7 per cent to 2,320.06.

Technology stocks were the story of the day, as merger buzz drew investors to the sector, which looked ripe for some buying after dropping almost 15 per cent since the beginning of the year. The TSX information technology sub-index gained 2.3 per cent, led by big gains at Celestica (up 5.4 per cent) and Research in Motion (up 5.2 per cent).

Ironically, one of the companies that had helped fuel the interest in techs Monday - Nortel Networks Corp. - actually lost 1.1 per cent on the day. Before the market opened, the Wall Street Journal reported that Nortel and Motorola Inc. were in talks for a possible merger of their wireless infrastructure operations. But the story didn't develop further during the day, and some analysts suggested that such a deal might not be immediately beneficial to Nortel's stock price, as it could result in integration costs and possibly further restructuring charges. Motorola rose 2.8 per cent in New York.

Yahoo Inc. also drew interest to the tech sector, as its board rejected Microsoft Corp.'s hostile takeover bid. The move could leave the door open for a proxy battle or bidding war for the online giant, which sparked hopes among investors that a broader round of consolidation in the industry could be afoot.

Energy stocks rose 2 per cent in Toronto, while U.S. energy giant Exxon Mobil Corp. was the biggest contributor to the S&P 500's gains, as crude oil prices jumped $1.87 (U.S.) to $93.64 a barrel in New York. Venezuelan President Hugo Chavez threatened to stop oil shipments to the United States in retaliation for court orders freezing certain assets of the country's state-owned oil company, all part of an ongoing dispute over compensation to U.S. oil companies for the government's nationalization of a major oil project last year. Cold weather in the norhteast and a U.S. refinery outage also contributed to the rising price.

The markets largely shrugged off negative news on the credit front. Insurance giant American International Group Inc. said it may have understated some of its credit losses, raising the likelihood that the company faces further writedowns in the neighbourhood of $5-billion stemming from the U.S. subprime mortgage meltdown. AIG's stock plunged almost 12 per cent, wiping out more than $15-billion in market capitalization, but the market's negative reaction to the news remained largely confined to AIG and a few other insurers.

Copyright 2001 The Globe and Mail

Sunday, February 10, 2008

no sector or market, either foreign or domestic to hide in at the moment

The markets were either trading sideways or down all week after a ground shaking service sector report sent stocks plummeting. At Pinnacle Digest we believe the retail sector can be used to gage and monitor the health of an economy.

January was a very telling month for the health of the United States economy and its consumer, which in terms of economic growth is the cornerstone to the economy. Retail chains across the country have recently reported their worst monthly sales results in almost five years. We have learned that a number of major chains are preparing for a slow down as they plan to close hundreds of stores and cut thousands of jobs. It has been reported that since December, major chains have announced plans to close at least 900 locations. The International Council of Shopping Centers has predicted that 5,770 retail locations will close this year. This represents a 25% increase over 2007, and the highest increase since 2004.

Wal-Mart Stores Inc. is a perfect example of a retail chain showing distinct signs of slowing. Wal-Mart has reported that same-store sales rose only 0.5% in January compared to a year earlier. This is far below its expectation of a solid 2% gain. In the fiscal year ended February 1st Wal-Mart US same-store sales rose just 1.4%. This is the lowest increase in nearly 30 years, since they began releasing this information to the public. Being the world's largest retailer, Wal-Mart can clearly represent the fading consumer sentiment within the marketplace. We will be watching their sales very closely as the United States teeters on the brink of a full blown recession. As these figures strike fear into the hearts of many investors, it only strengthens our belief that this is an opportune moment to buy stocks which have excellent growth and demand potential in their respective sectors.

In recent years North American investors have enjoyed substantial returns from outsourced foreign markets. Stocks outside of the United States have outperformed the Dow Jones Industrial Average time and again and have done so for the fifth year in a row. According to a Morgan Stanley Capital International Index report, emerging markets increased almost 37% last year.

Investors hoping to scurry under that same shelter of foreign markets and continued global expansion have been sorely disappointed this year. In 2008, all markets have been singing the same song and it's not a happy one.. yet. There is a strong consensus that the economic turmoil originating in the United States is spreading across the globe. Let's have a look at the global indices and see how they compare to the Dow Jones Industrial Average which is down just over 7.8% this year.

The U.K. FTSE 100 is down 11.3% on the year. (Last year gained 3.8%)
China's Shanghai Composite Index is down 12.6% on the year. (Last year gained 96.7%)
India's Sensex Index is down 13.6% on the year. (Last year gained 47.1%)
Japan's Nikkei Stock Average Index is down 13.7% on the year. (Last year lost 11.1%)
Hong Kong's Hang Seng Index is down 15.6% on the year. (Last year gained 39.3%)
France's CAC 40 Index is down 15.9% on the year. (Last year gained 1.3%)
Germany's DAX Index is down 16.5% on the year. (Last year rose 22.3%)

It is quite clear that there is no sector or market, either foreign or domestic to hide in at the moment. With that stated, we believe the best investors in the world are positioning themselves for the turnaround of the economy.

It is very difficult to pick market bottoms, even when using history as a guide. Using the S&P 500 as a benchmark, let's have a look at the numbers.

Many financial companies and homebuilders within this index have hit rock bottom prices in the last four months. The stock market and index has not taken as bad of a beating. The S&P 500 is down about 14.8% since its October peak. Since World War II, on average, the index dropped 26% from its peak during a recession time period. So if we are in or headed for a recession, the S&P 500 would have to drop another 200 points or just over 10% more. Pinnacle Digest believes we are in a mid-cycle slowdown and that the markets will not be spiraling downward for much longer.

Mr. Warren Buffett has a unique view on the US economy which we all need to take into consideration.

Mr. Buffett at this moment is a 'Huge Bull' on the U.S. economy. He recently stated that, "I am a huge bull on the American economy." Friday morning a member of our team here at Pinnacle Digest came across an interview Warren Buffett participated in this week with the National Post of Canada, on a recent trip to Toronto. When asked about the US economy Buffett explained that, compared to 1982 when short-term interest rates were 21% "this is not a tough period." Buffett went on to state that, "We do not have an unavailability of credit to people who've got reasonable credit demands, and its not expensive. We're not in a credit crunch for those who have sound deals." When asked how bad things could get, he did confess he had no idea, but stated, "It could be pretty bad but we always come out of it."

With so many opinions, figures and negative signs spewing from the economy and government officials, the market is fluctuating greatly at the moment. Investors are in an environment of uncertainty and doubt but we believe that within the next few months they will witness the best buying opportunities of the decade.

PinnacleDigest.com

Friday, February 8, 2008

Commodities lift Canadian stocks

Market News: After the Bell

Commodities lift Canadian stocks

RTGAM

If the commodity-heavy Canadian stock market loves higher oil and gold prices, it got big doses of both on Friday which helped drive the benchmark Canadian index up even as U.S. stocks fell.

Crude oil futures traded at $91.74 (U.S.) a barrel in New York, up $3.63 or 4.1 per cent, a substantial reversal from declines earlier in the week when observers fretted over rising U.S. inventories and concerns about lower consumption in the face of a slowing U.S. economy. As well, the price of gold shot up $11.59 an ounce in New York to $922.10 in another sudden reversal that brings bullion close to its record close of $929.40, according to Bloomberg.

The Canadian index closed at 12,989.34 on Friday, up 63.97 points or 0.5 per cent, driven higher by Barrick Gold Corp., Goldcorp Inc. and Suncor Energy Ltd. The index was also given a lift by a sharp rally in Research In Motion Ltd. Its shares rose 4.6 per cent to $89.73 on speculation that the technology company may include a touch screen when it introduces its next line of BlackBerry wireless communications devices.

Meanwhile, major U.S. indexes ended the day down on more concerns about the health of the U.S. economy, despite a rally among blue-chip technology stocks. The Dow Jones industrial average closed at 12,182.13 down 64.87 points or 0.5 per cent. The broader S&P 500 closed at 1331.29, down 5.62 points or 0.4 per cent.

The S&P/TSX composite index now has the dubious distinction of being the world's best-performing major index in 2008, even though it is under water. So far this year, it is down 6.1 per cent - which would normally look bad if it were not for the 8.2 per cent loss at the Dow Jones industrial average, the 10.4 per cent loss at the U.K.'s FTSE 100, the 15 per cent loss at Japan's Nikkei 225 and the 16.1 per cent loss at Germany's DAX index.

Copyright 2001 The Globe and Mail

PDP moving back up towards the target

Thursday, February 7, 2008

BWR+ MKO Partnership Pays Off

Metco Resources Inc.: Resources Update of the Orphee Deposit

ccnm

MONTREAL, CANADA--(Marketwire - Feb. 7, 2008) - Metco Resources Inc, ("Metco") (TSX VENTURE:MKO) is pleased to announce the release of an NI 43-101 compliant resource update on the Orphee Deposit, located in the Lebel-sur-Quevillon mining camp. The resource update dated Feb 6, 2008, was prepared by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA"), of Toronto. The resource update forms an integral part of the Orphee Pre-Feasibility Study being prepared by Scott Wilson RPA, who are responsible for geology, diamond drilling programs and mineral resource estimation, and GENIVAR Limited Partnership ("Genivar"), a Quebec City engineering firm, responsible for mining methods, mineral reserve estimates, metallurgy, infrastructure and economic evaluation. The Orphee Deposit is held in a 50:50 joint venture with Breakwater Resources Ltd. ("Breakwater").

The mineral resources of the Orphee Deposit were re-estimated by Scott Wilson RPA and stand at:

Indicated category: 607,000 tonnes @ 6.6% Zn, 0.44% Cu, 14 g/t Ag and 0.12 g/t Au

Inferred category: 276,000 tonnes @ 7.0% Zn, 0.79% Cu, 13 g/t Ag and 0.08 g/t Au

The mineral resources were estimated utilizing the following assumptions:

- Metal prices: Zn: US $1.12/lb, Cu: US $2.55/lb, Ag: US $12.00/oz;

- Exchange rate: Can $ 1.09 per US $;

- Cut-off NSR of $80/t.

The previous historical mineral resource estimate for the Orphee deposit included inferred resources of 1,800,000 tonnes @ 4.25% Zn, 0.54% Cu and 11.75 g/t Ag. The historical mineral resources, estimated by Cambior Inc. in 1998, were classified as inferred resources in accordance with NI 43-101 following a review of the description of the methodology and drill hole spacing used, by Yvan Bussieres, eng, and Donald Theberge, eng, M.B.A. (Technical Qualification Report NI 43-101 on "Les proprietes du secteur Lebel-sur-Quevillon, Quebec" dated November 15th, 2005 and filed on SEDAR).

The corporate strategy of Metco is to search for, acquire, explore, and develop mining properties with a high potential for base metals throughout Canada. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Florent Gauthier, P.Eng. is the qualified person who has reviewed the content of this news release.

FOR FURTHER INFORMATION PLEASE CONTACT:

Metco Resources Inc.
Florent Gauthier
President
514-875-6279
514-954 9673 (FAX)
info@metco.ca

or

SOLAK Communications
Francois Kalos
450-993-0828
kalos@solak.ca

Its green but not everywhere...Mother said there would be days like these...

Stocks up despite grim news

RTGAM

There was enough bad news on Thursday to sink the stock market equivalent of a battleship, but in the end North American investors sailed through.

They dodged comments from Richard Fisher, president of the Federal Reserve Bank of Dallas, who warned that aggressive rate cutting on the part of the U.S. Federal Reserve could "juice up" inflation - the second comment in as many days that the tonic investors are counting on might not arrive. They steered clear of a dismal forecast from Cisco Systems Inc., made on Wednesday night after markets closed. And they just plain ignored the fact that European stocks fell sharply on renewed fears of a U.S. recession and a global slowdown.

North American stocks ended the day higher, despite some waffling earlier. The Dow Jones industrial average closed at 12,247, up 46.0 points or 0.4 per cent. The broader S&P 500 ended at 1336.91, up 10.5 points or 0.8 per cent. And Canada's S&P/TSX composite index ended at 12,925.37, up 58.17 points or 0.5 per cent.

In the end, investors may have ignored the near-term turbulence for what looked like a concerted effort on the part of the world's major central banks to cut rates and get the global economy humming again. The Bank of England did it on Thursday, trimming its benchmark by 25 basis points (or a quarter of a percentage point). And while the European Central Bank held rates steady on Thursday, initially causing some concern among investors who want a rate cut, it sent out the right message later in the day that it may be open to rate cuts this year.

Stefane Marion, an economist at National Bank Financial, noted that the global policy rate among the G7 developed economies, after adjusting for inflation, is negative for the first time in three years, which usually works a powerful dose of medicine for an ailing economy.

"There may still be a lot of uncertainty regarding the impact of a U.S. recession on the global economy, but the good news is that central banks are responding," he said.

Copyright 2001 The Globe and Mail

Dim view on central banks

Dim view on central banks, Cisco

RTGAM

Investors will have one eye on Europe and another on North America on Thursday morning, with both markets likely to make big moves on the downside.

In widely expected decisions, the Bank of England hiked its key interest rate by 25 basis points (or a quarter of a percentage point) on Thursday, to 5.25 per cent, warning about the risks of inflation but also stating that it had to balance those risks against the threat of a sharp downturn in economic activity. At the same time, the European Central Bank held its key rate steady this morning, at a six-year high.

Despite the decision to say put, ECB President Jean-Claude Trichet told a press conference that his views on the economy were far from sunny: "As the reappraisal of risk in financial markets continues, there remains unusually high uncertainty about its overall impact on the real economy," he said.
Clearly, investors did not take kindly to the moves by the two central banks, driving down European shares sharply. The U.K.'s FTSE 100 fell 2.8 per cent in early afternoon trading and Germany DAX index fell 2.7 per cent.

North American stocks are likely to take a similar thumping when markets open. Stock index futures for the S&P 500 pointed to a 1.1 per cent downturn and Nasdaq 100 futures pointed to a 1.9 per cent downturn. Part of the problem here is the fact that John Chambers, CEO of Cisco Systems Inc. - considered a bellwether stock for the technology sector - warned late on Wednesday that the company's results will be under pressure for some time.

"It's the most cautious I've seen CEOs in the U.S. and Europe in many years," Mr. Chambers said on a conference call on Wednesday. In pre-market trading, Cisco's stock is down 8.3 per cent, to $21.17 (U.S.).

In Canada, investors will weigh key earnings news that was released in the morning. On the upside, Air Canada blew away expectations with net income rising to $35-million in the fourth quarter, up from a $144-million loss last year. Revenue rose 4 per cent. On the downside, struggling food retailer Loblaw Cos. disappointed expectations. Fourth quarter earnings rose to $40-million, up from a loss of $756-million last year - but the results were lower than analysts had expected.

Copyright 2001 The Globe and Mail

Wednesday, February 6, 2008

Cue the selloff, as investors suddenly felt less certain that the Fed would come to their rescue

Inflation comments sour sentiment

RTGAM

Take one tentative stock market rally, add a Fed official's comments about inflation and watch the rally fizzle. This was the recipe for Wednesday, when North American stocks came out of the gate with a jump but then stumbled in the afternoon, leaving major indexes down for the day and dashing hopes for a turnaround following the big selloff on Tuesday.

The inflation comments came from Charles Plosser, chief executive officer of the Federal Reserve Bank of Philadelphia, during a speech at the Birmingham Rotary Club. A lot of the speech was mere throat-clearing, but his thoughts on how the U.S. Federal Reserve must approach rate cuts in the face of troublesome inflation were particularly arresting.

Here is the part that took investors by their lapels and shook them: "There are those who have expressed the view that in times of economic weakness, the Fed must not worry about inflation and should focus its entire effort on restoring economic growth by dramatically driving interest rates down as far and as rapidly as possible. To borrow a line attributed to that famous, or perhaps infamous, Union Admiral David Farragut at the Battle of Mobile Bay, it is sort of a 'damn the torpedoes, full speed ahead' approach to policy. But the Fed has a dual mandate for a reason. Price stability is a necessary component for achieving sustained economic growth. Ignoring price stability during times of economic weakness risks undermining our ability to achieve economic growth over the long run. It fuels higher inflation down the road and risks inappropriate risk taking and recurring boom/bust cycles. This would be counterproductive."

Before the speech: According to fed funds futures - via David Rosenberg, North American economist at Merrill Lynch - investors believed that the Fed would cut rates by half a percentage point on March 18 and would bring rates down to just 2 per cent by August.

After the speech: Cue the selloff, as investors suddenly felt less certain that the Fed would come to their rescue.

The Dow Jones industrial average, which had rallied as much as 125 points, ended the day at 12,200.1, down 65.03 points or 0.5 per cent. The S&P 500 closed at 1326.45, down 0.8 per cent, weighed down by Apple Inc., CME Group Inc., Chevron Corp. and Microsoft Corp. In Canada, the S&P/TSX composite index, up 135 points mid-day, ended at 12,867.2, down 64.75 points or 0.5 per cent, in a decline was fed in part by lower oil prices. The biggest losers included Research In Motion Ltd., EnCana Corp., Canadian Natural Resources Ltd. and Petro-Canada.

Copyright 2001 The Globe and Mail

Up And Down The Markets

North American stocks point up

North American stocks point up

RTGAM

After the dramatic sell-off on Tuesday, North American investors appear to be ready to creep back in to the stock market, if futures activity is any indication. S&P 500 futures indicated a 4.4-point rise on Wednesday, to about 1348. Dow Jones industrial average futures indicated a 27-point rise, to about 12,347.

Good results from Walt Disney Co., which beat analyst expectations, could explain part of the rise. The shares rose in Germany. But investors may be ready to buy stocks that are deemed to be cheap following the widespread decline in North American stocks on Tuesday that left few sectors untouched.

In European trading in the afternoon, stocks were a mixed bad. The U.K.'s FTSE 100 was down 0.3 per cent and Germany's DAX index was up 0.4 per cent. However, investors will have to weigh overnight selling in Asia, with the Nikkei 225 plummeted 4.7 per cent, its worst one-day decline since January 22.

"The chitchat from Tokyo-side is that investors are scared about Japan's economy, they are scared about the U.S. economic slowdown - which should pinch profits at Japan's exporters of consumer goods and vehicles - and they are scared in general," said Carl Weinberg, chief economist at High Frequency Economics, in a note to clients. "What scares us - and what we believe makes the Nikkei's situation even worse than it needs to be - is that the huge overhang of foreign investor positions, that has supported this stock market over the last four years, could liquidate in a heartbeat."

In Canada, investors are likely to follow the U.S. lead but will also have an eye on a number of important earnings releases, including quarterly reports from BCE Inc., Cameco Corp. and Saputo Inc.

Copyright 2001 The Globe and Mail

Tuesday, February 5, 2008

Markets Are A Roller Coaster

Market News: After the Bell

"R" word no longer disguised

RTGAM

You can't say there were no warning signs in the dramatic stock market selloff on Tuesday. If the earlier European downturn wasn't proof enough that investors are growing more skittish about a U.S. recession and its impact on the rest of the world, there was the morning's non-manufacturing index from the U.S. Institute for Supply Management that took the formerly disguised "R" word, spelled it out, underlined it and highlighted it in red.

By the time the selling had ended, major North American stock market indexes had skidded between 2 and 3 per cent, for their worst showing in 11 months. The S&P/TSX composite index closed at 12,931.95, down 326.21 points or 2.5 per cent. The Dow Jones industrial average closed at 12,265.13, down 370.03 points or 2.9 per cent. All 30 stocks in the blue-chip index fell. And the broader S&P 500 closed at 1336.64, down 44.18 points or 3.2 per cent.

Stefane Marion, an economist at National Bank Financial, put things into perspective in a note to clients: "The all-important service sector which accounts for about three quarters of U.S. GDP (or 85 per cent of business sector output) and over two-thirds of payroll employment contracted for the first time in 58 months in January," he said. "This development adds to the evidence already provided by the January payroll data that the U.S. economic expansion has come to an end. Our current forecast is for U.S. real GDP to contract 1.3 per cent in the first half of 2008."

Tuesday's volatility, while high, is no record breaker - and even cautious investors might yawn at the declines. That is because recent stock market activity has been exceptionally volatile. The blog from Bespoke Investment Group does a nice job of quantifying this volatility by looking at the number of days when the S&P 500 has moved up or down by at least 1 per cent (which is generally considered a big move).

"Over the last 20 trading days, the S&P 500 has risen by at least 1 per cent seven times and declined by more than 1 per cent on eight occasions. This makes a total of fifteen 1 per cent days over a 20 day period," said the blog's writer. The blog item was posted at 12:38 p.m. EST, so there is no word on whether the tally included Tuesday's volatility.

In the link to the chart, you can see how unusual things are. There have been only a few occasions with this sort of volatility: the bear market of 2002, the dot-com downturn at the turn of the century and the recession of 1990.

Copyright 2001 The Globe and Mail

North American stocks head down

Tuesday, February 05, 2008

North American stock market indexes opened substantially lower on Tuesday morning, following steep losses in Europe, lower commodity prices and a surprise release from the Institute of Supply Management which suggested that the U.S. services industry had contracted in January.

“The low for the business activity index in the recession of 2001 was 47.9, so it is very tempting to see this survey as evidence that recession is unavoidable,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to clients. “But we have never found any predictive power in the survey, which lags growth in core retail sales. We already know holiday sales were horrible, and have worsened since.... Still, ISM optics are horrible – orders down 10.4 points, employment 7.9 points – and will keep pressure on the Fed.”

Investors, however, see little upside to the survey. The S&P/TSX composite index fell 94 points in early trading, or 0.7 per cent, to 13,179. The Dow Jones industrial average tumbled 131 points, or 1 per cent, to 12,504. All 30 stocks in the blue-chip index were down, led by Intel Corp., Citigroup Inc. and Alcoa Inc.

Monday, February 4, 2008

Oil up, gold down, TSX flat Slow But Sure- Up Up Up

Oil up, gold down, TSX flat

RTGAM

With commodity prices heading in different directions on Monday, it is little wonder that the commodity-heavy S&P/TSX composite index was also pushed and pulled, leaving it not far from where it began. It closed at 13,261.04, down 57.33 points or 0.4 per cent.

On the upside, crude oil traded at $89.98 (U.S.) a barrel in New York, up $1.02. That gave a boost to a number of energy producers including Canadian Natural Resources Ltd. and Suncor Energy Inc. They rose 2.8 per cent and 1.1 per cent, respectively. On the downside, though, gold tumbled $2.29 an ounce to $903.18, making Barrick Gold Corp. act like a concrete block on the index's ankle. Barrick shares tumbled to $49.07, down $1.57 or 3.1%.

In the United States, where commodities are consumed more than they are produced, the Dow Jones industrial average closed at 12,635.16, down 108.03 points or 0.85 per cent. The S&P 500 fell to 1380.82, down 14.6 points or 1.05 per cent, weighed down by financials that had been downgraded by analysts amid ongoing credit concerns. Merck & Co. Inc., the pharmaceutical company, was one of the brightest spots in the day. Its shares rose 3.2%.

Copyright 2001 The Globe and Mail

Sunday, February 3, 2008

BUY: PDP Target 17.40 Updated by Jennings Report

Just Returned From 1 Week In Mexico

It looks like some positives have taken place in the metals markets

Bwr Has Excellent Upside Potential

Jan 30, 2008	Price Crosses Moving Average (21-day)	Short-Term Bullish	$1.49	n/a
	Jan 29, 2008	Continuation Wedge (Bullish)	Intermediate-Term Bullish	$1.35	$3.10 - $3.50
	Jan 29, 2008	MACD	Short-Term Bullish	$1.35	n/a
	Jan 28, 2008	Continuation Wedge (Bullish)	Intermediate-Term Bullish	$1.27	$3.40 - $3.80
	Jan 24, 2008	Commodity Channel Index	Other	$1.29	n/a
	Jan 23, 2008	Relative Strength Index (RSI)	Short-Term Bullish	$1.20	n/a

As China chills, metals heat up
ANDY HOFFMAN
RTGAM

When it snows in China, the rest of the world's metals industry doesn't catch a cold, it gets healthier.

For years, metals markets and mining companies have been closely following the Chinese economy as its rapid growth and demand for raw materials fuelled the biggest metals boom in history. Now, those same players are watching the weather in China just as intently, to gauge where metals prices might be headed next.

China is under siege from the worst snowstorms to hit the country in half a century. Snow has been falling in much of eastern, central and southern China since Jan. 10. The resulting chaos has sharply reduced the supply of coal to Chinese power generating stations, knocking out electricity or reducing supply to major aluminum and zinc smelters.

"The big concern with China is that a lot of their industrial machinery, particularly their high-energy smelting operations, are being curtailed. It's a big part of the metals markets," David Davidson, a mining analyst at Paradigm Capital, said in an interview.

China is the world's biggest producer of both aluminum and zinc but production has suddenly been cut back because of the severe weather, raising prices and the prospects for producers in other parts of the world.

China's largest zinc smelter, the Zhuzhou Smelter Group Co., has cut production because of the power shortages, a company official told Bloomberg News yesterday. China's annual aluminum production of roughly 12.6 million tonnes will be reduced by 300,000 tonnes because of the smelter shutdowns, according to Beijing Antaike Information Development Co., a metals consulting firm.

By some estimates, as much as a tenth of China's metal smelting capacity has been brought to a standstill by the power shortages and bad weather, prompting strong price gains for metals including aluminum and zinc on fears of dwindling supply.

Aluminum prices posted their biggest one-day gain in 16 years on the London Metal Exchange Wednesday, before falling back. Aluminum for delivery in three months gained as much as 5.5 per cent to $2,654.50 (U.S.) a tonne, the largest one-day advance since January, 1992. Spot aluminum hit a six-month peak of $2,715 a tonne, but erased its gains later in the day, closing down $9 at $2,641.

Zinc prices also rose sharply before retreating at the end of the trading session.

Because China is such a large producer of both aluminum and zinc, the metals, and aluminum in particular, have failed to enjoy the massive gains experienced by commodities that China needs to import, such as iron ore, copper and nickel.

If Chinese producers continue to experience power shortages, however, China could once again become a net importer of aluminum, according to some analysts.

"These kinds of capacity restrictions could accelerate China's switch back to a net importer of aluminum," said ANZ senior commodities analyst Mark Pervan.

Last year's $38-billion takeover of Montreal aluminum giant Alcan Inc. by Rio Tinto PLC was driven in part by expectations that Chinese aluminum demand will increase sharply.

However, if the storms continue to affect China's overall economy, demand for all metals could weaken. Fallout from the snow storms have already caused more than $3-billion in economic losses, according to China's civil affairs ministry.

Toronto-based zinc producer
Breakwater Resources Inc. was among the top gainers in the mining sector yesterday, rising 10.3 per cent on the Toronto Stock Exchange. Mr. Davidson, however, said the gains were in part owing to increased speculation that Winnipeg copper and zinc producer HudBay Minerals Inc. could bid for its smaller rival.

With files from Reuters News Agency

Copyright 2001 The Globe and Mail

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Friday, February 29, 2008

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Wednesday, February 20, 2008

Petrolifera secures new Puesto Morales Este contract

Tuesday, February 19, 2008

Monday, February 18, 2008

Sunday, February 17, 2008

Thursday, February 14, 2008

China copper, zinc firms restore operations

Wednesday, February 13, 2008

Tuesday, February 12, 2008

Monday, February 11, 2008

Sunday, February 10, 2008

Friday, February 8, 2008

Thursday, February 7, 2008

Wednesday, February 6, 2008

Tuesday, February 5, 2008

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