The close: Bring on the second quarter+Tim Pullback House Buy +Sells

The close: Bring on the second quarterRTGAM

If you place importance in the quarter-by-quarter blows of the stock market - and who doesn't? - the stats are now in. The first quarter of 2008 was volatile and it was a money loser, leaving investors caught between choruses of "stocks are cheap" and "there is worse to come.

"The S+P/TSX composite index fell 3.5 per cent, the Dow Jones industrial average fell 7.6 per cent, the S[amp]amp;P 500 fell 9.9 per cent, most of the major European indexes fell by double digits, and Japan's Nikkei 225 fell 18.2 per cent.But for investors, there was something about these statistics that smacked of old news.

On Monday, the last day of the quarter, the mood shifted to better times in the second quarter - or April, at the very least.The Dow closed at 12,262.73, up 46.33 points or 0.4 per cent. That, of course, includes Merck [amp]amp; Co. Inc.'s 14.7 per cent meltdown that accounted for 53 points. Ignore that, which isn't entirely unreasonable given that the pharmaceutical giant's problems failed to infect the rest of the market, and the Dow ended the quarter with close to a three-digit gain. Citigroup Inc. rose 2.8 per cent and Intel Corp. rose 1.9 per centIn Canada, the S[amp]amp;P/TSX composite index closed at 13,339.2, up 105.41 points or 0.8 per cent.

The Big Banks enjoyed a nice ride, with Royal Bank of Canada gaining 4.3 per cent and Toronto-Dominion Bank gaining 3.7 per cent.The big losers were the gold producers, which did not fare well as the price of gold fell to $921.50 (U.S.) an ounce, down $15. Barrick Gold Corp. fell 1.7 per cent and Goldcorp Inc. fell 1.5 per cent. Is that bad news? If gold soars with heightened fears about inflation and monetary collapse, then its retreat can be seen as a harbinger of better days ahead - well, until the second quarter begins on Tuesday.[amp]nbsp;[amp]nbsp;Copyright 2001 The Globe and Mail

PDP Houses+More

Gross on credit markets: No more autonomy

Monday, March 31, 2008
Bill Gross, managing director at Pacific Investment Management Co., or PIMCO, is never one to hide his real thoughts on the markets and the U.S. economy – and he came out slugging in his most recent monthly commentary to clients. This time, he argues that greater scrutiny of the credit markets is a foregone conclusion.
“In my opinion, the private credit markets have forfeited their privileged right to operate relatively autonomously because of incompetence, excessive greed, and in minor instances, fraudulent activities,” he said. “As a result, the deflating private market's balance sheet is being re-nationalized in some cases with increased regulation, in others with outright guarantees and agency lending.”
The housing downturn, of course, is the main reason why the credit market is shaking in its boots these days. And the solution, Mr. Gross said, must come from the quick response of authorities, even though a helping hand from government runs counter to deeply held Republican beliefs.
That's because a 20 per cent decline in U.S. home prices could spell catastrophe, since most homeowners have substantial debt loads that make a downturn far more of a shock to the U.S. economy than the pop of the dot-com bubble at the start of the decade.
“Ultimately government programs which support private credit market assets may be required in order to prevent an asset deflation of significant proportions,” Mr. Gross said. “A 20 per cent negative adjustment not only wipes out all ownership equity for millions of Americans, it turns their homes ‘upside down' – incentivizing them to let their gardens grow weeds instead of lettuce. The decline needs to be stopped quickly in order to avert additional crises.”
[amp]nbsp;
© Copyright The Globe and Mail

Turn Every Dollar You Invest Into $1.20…Instantly

Turn Every Dollar You Invest Into $1.20…Instantly Date: 03/08/2008
International Living presents: You can create a safe retirement investment plan, secure a gorgeous vacation property, create a new income stream, or just increase your wealth…using what the guest author of today’s Saturday Edition describes as “the closest you’ll get to a sure thing.” Pathfinder’s Ronan McMahon explains more below.
Saturday, March 8, 2008

Read more about foreign real estate in International Living Postcards—Saturday Edition
In today’s investment markets, a sure thing is hard to come by. In 10 years of investing in and scouting non-U.S. real estate markets, I’ve discovered something that comes close just once. And the phone call I had with a contact in Paris last night convinced me that this strategy remains the closest you’ll get to a sure thing in the international real estate investing game.
Whenever a developer talks about guaranteed rental returns, I hear alarm bells.

From Dubai to the Dominican Republic, real estate developers “guarantee” rental returns pushing double digits for periods up to four years. In the industry, it’s no secret how this works: You effectively pay upfront for the rent you will receive during the period of the rental guarantee. If you buy a unit expecting…or relying…on the same level of rental returns to continue at the end of the guarantee period, you will be sorely disappointed. The rental market for your unit will be limited.

But there is one exception: the French Leaseback Program. When I first heard about this program and its guaranteed rental returns, I thought it was too good to be true. But when I researched the program, I saw that it made sense on paper…and conversations with purchasers confirmed that the program works in practice.

Here’s how it works. When you buy (an apartment, house, or ski lodge) through this program, you get a full refund from the French government of the 19.6% V.A.T. levied on new build in France. That’s like getting $1.20 worth of real estate for every dollar you invest…straightaway. Why does the French government do this? It needs tourist beds to allow France’s tourism industry grow—you get a check for 19.6% of the purchase price…the French government gets a tourist rental. Everybody wins.

But, French bureaucracy being what it is, look for developers who will give you the 19.6% discount upfront, and let them chase the government for the check. It’s just easier.

Now comes the guaranteed rental return. When you hand your unit over to a management company—typically for nine years—you agree on a rental yield (usually 4% to 5%, although it can be higher or lower), which is guaranteed for the nine-year term. The management company takes care of everything, and you get a check each year, the amount of which is guaranteed. Plus, this rental return is indexed in such a way that it may increase, but it will never decrease.

It’s not unusual for European governments to use tax incentives as a tool to increase the supply of tourist beds. In most cases, you can only capitalize on these incentives if you have a big tax liability or other rental income in the country in question.

The French Leaseback Program differs in that the tax incentives benefit you equally irrespective of any other tax liability you have in France.

There are hundreds of leaseback projects available across France. I don’t have to research every one—I know what to look for in a leaseback, and on a call last night with a trusted contact in the business, I learned about a project to be released in the coming days that ticked all my boxes. Competitively priced units (from $108,000) in the greater Montpellier region, a growing urban area that has potential for capital appreciation…net rental yield of 4.6% guaranteed by an experienced management company….and a developer-advanced refund (so you don’t have to claim your 19.6% from the French government).

A note of caution: France is a beautiful country. From Paris to the Côte d’Azur to the Alps, this is a very appealing place to spend time (just ask the 80 million tourists who visited last year).

If you’re looking for a vacation home, the French Leaseback Program is not the best way to buy it.

If you’re looking for a pure investment, put aside all romantic notions about France. The French don’t use the term “gringo pricing,” but they can embrace the concept. An apartment in Saint Tropez may seem like a great idea when you’re basking in the sun on the French Riviera…but ignore that “blow to the heart” (as the French say) and go by the numbers. That way, you’ll avoid overpriced leaseback units.

As a general rule, I like leaseback opportunities with high rental yields in urban or ski locations. Urban and ski areas offer the best prospect for year-round rental at the end of the guarantee period. France’s top ski resorts continue to grow the volume of non-ski-season visitors with the growth in hiking and other outdoor pursuits. My contact also told me about a ski project that got my attention…which I’ll tell you about in a few days, after I verify a few details.
If the leaseback opportunity in Montpellier sounds interesting to you, contact paris@imoinvest.com.


Ronan McMahonFor International Living
P.S. In recent years, the French Leaseback Program has expanded to include not just tourist units, but also student accommodation and nursing homes. I’ve no room to get into it here…but these can also make sense as an investment in certain situations.
Editor’s note: Ronan McMahon is executive director of the Pathfinder real estate scouting group, currently active in eight international real estate markets.

Pescod Talks Juniors

Gas field could be most vital discoveryRelated Information By Jack Money Business Writer Chesapeake Energy Corp. hinted Tuesday that its unconventional natural gas field in Louisiana unveiled this week has a chance to be its most significant find and likely "the most important operational announcement in the company's 19-year history.” Aubrey McClendon, chairman and chief executive of Chesapeake, talked about the find during a morning conference call with investment analysts.

McClendon called the Louisiana find in the Haynesville Shale "major” and said his company estimates it holds at least 7.5 trillion cubic feet equivalent of natural gas and perhaps as much as 20 trillion cubic feet equivalent. To give some perspective to that number, consider this:

The company's reported proved reserves in the Barnett Shale at the end of 2007 were just more than 2 trillion cubic feet equivalent. "We have tried hard during the past two years to keep our work on this new play secret, and we were successful until the last month or so, when other companies started to release information,” McClendon said.

The company also announced gas finds in southwest Oklahoma and the Texas Panhandle, and five oil projects in four states. Specifics about the locations of most of the fields were not disclosed, though some reports suggested the Haynesville field may be near Shreveport, La. McClendon said the company already has 200,000 net acres in the Haynesville field and wants to get 500,000 total. "Since we have a two-year head start on the Haynesville Shale land grab, we believe we will be formidable competition for anyone wanting to take us on in this play,” McClendon said.

He said the company already has drilled three horizontal wells in the field that have been successful. In fact, they are "much better than the first three horizontal wells drilled in any other new shale play to date,” he said. The company has four rigs drilling there right now, and it plans to increase that number to 10 by the end of 2008. "My belief this morning is that the Haynesville Shale has the chance of being the most significant play in the company's history,” McClendon said. As for the oil projects, company officials said they range in size from 1,000 acres to 1 million acres and that two of them already are producing oil. Test drilling will begin during the next year. McClendon said he is pleased the company is getting into those fields at a time when, at a British thermal unit equivalency measurement, oil is selling at nearly two times more than natural gas.

The fields could yield as much as a billion barrels of oil, he said. Analysts also were pleased with McClendon's comments about the company. Sheraz Mian, with Zacks Investment Research, said the announcement is causing "all of us who like the stock a little bit more excited about it.” He said, though, that this is just what analysts like to see when it comes to big energy companies: They need to be producing, and they need to be lining up new areas to explore along the way.

"Chesapeake is one of those few operators in the exploration and production part of the business who have the luxury of getting to put together a very detailed pipeline of project and prospects across the country,” Mian said.

"They have a fairly large and detailed inventory of projects that they can work on for years without needing to acquire anything new.”

CRO: Insiders Buying At .38 Cents

#1 This is the biggest reason I think you want to be in CRO is the fact that we are valued at about 2% of inground value. Marketcap 25 MILLION, inground value over 1.2 BILLION

#2 The metal market looks to continue to rise. Supply of most metals continues to lag far behind demand. Nickle could easily be over $20 again.

#3 The potential to find more copper and nickle below the open pit. 2.95% Ni, 0.82% Cu, 0.07% Co over 21.5 m including 7.2% Ni, 0.67% Cu, over 5.5 m is very encouraging. More results like this and we'll be seeing a new resource estimate and great potential to underground mine.

#4 The fact that mining equiptment is already purchased and potential for mining in less than three years.

#5 Potential for Nickle, Gold, and Copper from the property adjacent to Opawica Resources new discovery. 0.87% Cu and 4.08 g/t Au over a core length of 46 metres is very encouraging. CRO has started initial exploration programs in the area.

Source

PDP- Undervalued Oil Play Target 17.40-25.00

Petrolifera is a Calgary-based crude oil and natural gas exploration, development and production company. It holds approximately 497,000 acres of exploratory and production rights in Argentina, and is currently producing in excess of 9,000 boe/d of crude oil, natural gas and natural gas liquids at Puesto Morales. The company also holds 1.2 million acres of exploratory rights in Colombia and over 5.2 million acres under two licenses onshore Peru.

Net earnings of $814,354 were recorded in 2007. The first profitable year in the Company's history.

First Nickel Reports Financial and Operating Results For the Year Ended December 31, 2007


14:39 EDT Thursday, March 27, 2008

TORONTO, ONTARIO--(Marketwire - March 27, 2008) - First Nickel Inc. ("First Nickel" or the "Company") (TSX:FNI) announces that it has filed with the Canadian securities regulatory authorities its audited financial statements, and management's discussion and analysis for the year ended December 31, 2007.

Complete results will also be available on SEDAR and on the Company's website at www.firstnickel.com. All dollar amounts are expressed in Canadian currency unless otherwise stated.

Highlights

- Net earnings of $814,354 were recorded in 2007. The first profitable year in the Company's history.

- Achieved a mine operating profit of $13.6 million in 2007, an increase of $9.1 million (202%) over the $4.5 million achieved in 2006.

- Nickel production of 3,259,095 pounds and copper production of 2,185,023 pounds in 2007, highest in the Company's history. An increase of 33% and 36%, respectively, over 2006.

- Nickel and Copper metal sold in 2007 was 3,082,481 pounds and 2,005,190 pounds, respectively. An increase of 56% and 53%, respectively, over 2006.

- Increased operating cash flow in 2007 to $15.8 million compared to a cash usage of $0.1 million in 2006.

- Overall increase in cash balance of $17.1 million during 2007.

- The Company is debt free and had working capital of $24.0 million.

- In Q4, the Company wrote off $5.4 million of deferred exploration costs incurred on the Foy Mouth Property, following the termination of the option agreement with Xstrata.

Financial Results

The following table presents a summary of the results of operations for the three and twelve month periods ended December 31, 2007 and 2006:


Three months ended Twelve months ended
December 31, December 31,
2007 2006 2007 2006
---------------------------------------------------------------------------

Sales Revenue $ 15,333,945 $ 8,227,080 $ 56,925,326 $ 28,893,857
--------------------------- ----------------------------

Operating costs
excluding
amortization 10,402,686 7,049,512 39,490,509 22,089,758
Accretion of
asset retirement
obligations 47,310 177,000 182,310 177,000
Amort. of mining
properties &
equipment 1,018,896 720,000 3,645,688 2,160,000
--------------------------- ----------------------------
11,468,892 7,946,512 43,318,507 24,426,758
--------------------------- ----------------------------

Operating profit 3,865,053 280,568 13,606,819 4,467,099
--------------------------- ----------------------------

General and
administrative 376,832 557,981 1,809,275 2,381,160
Stock-based
compensation 639,271 371,124 2,742,978 530,585
Amortization 7,485 10,347 29,940 40,794
Debenture interest
and accretion - 764,527 1,266,201 3,045,000
Other interest 409,379 92,590 864,087 257,429
Interest and
other income (329,610) (149,650) (1,017,667) (383,658)
----------------------------------------------------------
1,103,357 1,646,919 5,694,814 5,871,310
----------------------------------------------------------

Earnings (loss)
before the
following 2,761,696 (1,366,351) 7,912,005 (1,404,211)

Write off of
mineral resource
properties
and deferred
exploration
costs 5,396,955 - 5,396,955 -
----------------------------------------------------------

Earnings (loss)
before taxes (2,635,259) (1,366,351) 2,515,050 (1,404,211)

Provision for
(recovery of)
future income
and mining taxes (926,032) (385,029) 1,700,696 (454,297)
----------------------------------------------------------

Net earnings
(loss) for
the period $ (1,709,227) $ (981,322) $ 814,354 $ (949,914)
----------------------------------------------------------

Net earnings
(loss)
per share:
- basic and
diluted $ (0.02) $ (0.01) $ 0.01 $ (0.01)


A net loss of $1,709,227 was recorded in the fourth quarter of 2007 compared with a net loss of $981,322 in the fourth quarter of 2006. The fourth quarter loss is mostly due to the write off of $5,396,955 of deferred exploration costs incurred on the Foy Mouth Property, as the Company has terminated the option agreement with Xstrata. These expenditures were mostly incurred prior to 2007 and did not have a material impact on the 2007 cash flow. For the year ended December 31, 2007, the Company recorded net earnings of $814,354, or $0.01 per share, compared to a net loss of $949,914, or $0.01 per share in 2006.

Sales revenue from the sale of nickel, copper and cobalt for the three month period ended December 31, 2007 (the "fourth quarter of 2007") increased by $7.1 million (86%) compared with the three month period ended December 31, 2006 (the "fourth quarter of 2006"). Higher nickel and copper metal sold of 136% and 73%, respectively, offset by a reduction in the realized nickel price of 7% and a weaker U.S. dollar compared to the Canadian dollar, accounted for this increase.

On a full year basis, the 2007 revenues increased by $28.0 million (97%) over 2006. Higher volumes of nickel and copper metal sold of 56% and 53%, respectively, along with a 38% increase in the realized average nickel price accounted for this increase, which was partially offset by a stronger Canadian dollar.

The following table sets out selected sales information for the periods indicated:


---------------------------------------------------------------------------
4th Q 2007 4th Q 2006 2007 Total 2006 Total
---------------------------------------------------------------------------
Sales by Payable Metal
---------------------------------------------------------------------------
Nickel - pounds 1,032,334 436,899 3,082,481 1,972,657
---------------------------------------------------------------------------
Copper - pounds 631,287 365,330 2,005,190 1,309,500
---------------------------------------------------------------------------
Cobalt - pounds 18,373 9,286 54,557 39,650
---------------------------------------------------------------------------
Average price
received US$/lb
---------------------------------------------------------------------------
Nickel $12.40 $13.36 $14.67 $10.61
---------------------------------------------------------------------------
Copper $3.25 $3.15 $3.09 $3.01
---------------------------------------------------------------------------
Cobalt $32.36 $18.19 $28.43 $15.57
---------------------------------------------------------------------------
Average Exch. Rate
Realized
---------------------------------------------------------------------------
US $ 1 equals
Canadian $ $0.9794 $1.1374 $1.0650 $1.1254
---------------------------------------------------------------------------


Mine operating costs, including treatment and refining charges, increased by 48% to $10.4 million in the fourth quarter of 2007 from $7.0 million in the fourth quarter of 2006. Higher tonnes treated (79%) and an overall increase in manpower of 23% at the Lockerby Mine, mostly accounted for the increase in operating costs. A nickel bonus of $941,000 is included in the fourth quarter of 2007 operating costs. In the fourth quarter of 2006, there was no nickel bonus. The bonus is defined in the Company's collective agreements and is tied to the price of nickel.

On a year-to-date basis, mine operating costs, including treatment and refining charges, increased by 79% in 2007 compared to 2006. The 2007 year was for the full 12 months, whereas 2006 only included costs for 9 months. Higher tonnes treated (28%), and an overall increase in manpower of 23% at the Lockerby Mine, mostly accounted for the increase in operating costs. A nickel bonus of $3,975,576 is included in the 2007 operating costs, whereas in 2006, the nickel bonus was $414,000.

General and administrative expenses in the fourth quarter of 2007 and for the year ended December 31, 2007, decreased by 32% and 24%, respectively, compared to the same periods for 2006. The lower 2007 expenditures reflect an overall reduction in costs. The 2006 expenditures included severance and termination costs of approximately $213,000 as a result of the management changes made during the year.

The higher stock-based compensation costs in the fourth quarter and for the 2007 year reflect the fair value of options granted that have vested in the current period. The Company uses the Black-Scholes pricing model in the valuations of the options.

Debenture and other interest expense in the fourth quarter of 2007 and for the year ended December 31, 2007 have been substantially reduced due to the repayment of the Series A Debentures on June 1, 2007. The interest expense in the fourth quarter mostly reflects the interest on advances received from Xstrata on the ore delivered to their facilities and a one time interest charge on the Part XII.6 tax regarding the timing of flow through expenditures.

Interest and other income is mostly made up of interest earned on term deposits. The higher interest income in 2007 compared to 2006 results from the Company having substantially higher cash balances in 2007 to invest.

Lockerby Mine Operations

During 2007, 124,492 tonnes of ore were delivered to the Xstrata treatment facilities, an increase of 26,883 tonnes, or 27%, over the 97,609 tonnes of ore delivered in 2006. Payable metal content in ore for 2007 is estimated to be approximately 3,259,095 pounds of nickel (an increase of 33% over 2006) and 2,185,023 pounds of copper (an increase of 36% over 2006).

Selected operating statistics for the twelve month period ended December 31, 2007 compared to the total 2006 year are as follows:


---------------------------------------------------------------------------
Item 1st Q 2nd Q 3rd Q 4th Q Total Total
2007 2006
---------------------------------------------------------------------------
Ore Delivered
to Mill (tonnes) 21,564 35,343 36,308 31,277 124,492 97,609
---------------------------------------------------------------------------
Nickel Mill
Head Grade (%) 1.90 1.50 1.72 1.23 1.57 1.52
---------------------------------------------------------------------------
Copper Mill
Head Grade (%) 1.06 0.95 0.91 0.78 0.92 0.88
---------------------------------------------------------------------------
Payable Nickel
(pounds) 699,622 878,866 1,032,334 648,273 3,259,095 2,444,316
---------------------------------------------------------------------------
Payable Copper
(pounds) 433,409 640,733 631,287 479,594 2,185,023 1,609,261
---------------------------------------------------------------------------
Payable Cobalt
(pounds) 11,821 16,526 18,373 12,705 59,425 47,487
---------------------------------------------------------------------------
Mine operating
cost per tonne $354 $254 $239 $278 $268 $232
---------------------------------------------------------------------------
Cash cost per
pound of
nickel (i) $10.42 $9.58 $8.60 $14.26 $10.13 $8.14
---------------------------------------------------------------------------

(i) Cash cost per pound of nickel is net of other metal credits, and does
not include amortization of mining properties and equipment, but does
include the nickel bonus defined in the Company's collective agreements
which is tied to the price of nickel.


From the beginning of the year until the end of the third quarter nickel production increased and unit operating costs declined, a trend which was interrupted in the fourth quarter. In the latter period, failure of the wear plates in the 4300 Level crusher resulted in a shutdown of production while repairs were being made. During the fourth quarter production was sourced from lower grade areas which further reduced nickel production. Following completion of repairs to the crusher in late December, production including ore grades returned to planned levels.

Excepting for the reduced output in the fourth quarter, the operation demonstrated improved productivity over the course of the year, increasing mine daily production from under 300 tonnes per day at the beginning to 400 tonnes per day going into 2008. Development continued satisfactorily toward 65-3L, the source for much of 2008 production. A maintenance program for the mobile fleet was launched, and vacancies in the technical and supervisory staff levels were filled.

For the full year the mine achieved a cash operating margin of $146 per tonne milled. Metal prices are expected to remain strong, but are unlikely to be as robust as early 2007, and therefore the emphasis at the mine in 2008 will be to continue to drive costs down, and increase output so as to preserve these margins.

Development productivity improved somewhat in 2007 but still lags, and the resulting limit in the number of working areas and therefore operating flexibility, means production scheduling has been vulnerable to short term interruptions. New development scenarios are being examined for the East Zone in 2008, which should add to production plans. The forthcoming mine development plan for Lockerby Depth is being built around the latest resource estimate (January 16, 2008), and will result in a long term production schedule and capital plan for the mine infrastructure, along with increased production.

The value of the fourth quarter 2007 payable metal will be recorded as revenue based on settlement prices in the first quarter of 2008 as per the Company's revenue recognition policy. The Company has received an advance payment totaling $2,970,681 towards the final settlement of the fourth quarter ore delivered to Xstrata.

Life of Mine Planning

On January 16, 2008, First Nickel reported a 289% increase in Indicated Resources at the Lockerby Mine. This resource estimate, coupled with the recently completed drilling is being integrated into studies by outside engineering consultants to estimate the operating and development costs and economic value associated with extending one of the shafts to better exploit the expanded resources. At the same time a reserve estimate and life of mine plan is expected to be completed.

A feasibility study was completed on Premiere Ridge in July, and subsequently an additional round of metallurgical work was undertaken at Xstrata's Process Centre. Permitting was advanced, a closure plan prepared, and further detailed engineering was undertaken by year-end. Discussions with Xstrata are underway in early 2008 to finalize offtake agreement terms, following which the Company will make a decision on development.

Exploration Activity

Exploration programs continued to focus on the Company's two other Sudbury properties in 2007. The majority of the Company's exploration costs were expended on the Morgan-Lumsden and West Graham properties.

A total of 52 drill holes representing 17,400 metres of core were completed on 4 properties in 2007 (refer to the table below) and selected holes were surveyed using the latest in borehole geophysical techniques.

Diamond drilling statistics: January 1, 2007 to December 31, 2007


---------------------------------------------------------------------------

SURFACE UNDERGROUND TOTALS

---------------------------------------------------------------------------
# Holes Metres # Holes Metres # Holes Metres
---------------------------------------------------------------------------
Lockerby 1 932 22 2,690 23 3,622
---------------------------------------------------------------------------
Premiere 0 0 0 0 0 0
Ridge
---------------------------------------------------------------------------
West Graham 21 5,190 0 0 21 5,190
---------------------------------------------------------------------------
Dundonald 0 0
---------------------------------------------------------------------------
Foy Mouth(a) 2 980 0 0 2 980
---------------------------------------------------------------------------
Morgan- 6 6,853 0 0 6 7,608
Lumsden(a)
---------------------------------------------------------------------------
TOTALS 30 13,955 22 2,690 52 17,400
---------------------------------------------------------------------------


The year also marked an expansion of exploration beyond the Sudbury Basin with the staking of unpatented mining claims in Eastern Ontario. The Company staked in excess of 7,000 hectares of claims within this area.

The Company and Pacific Northwest Capital Corp entered into a 50:50 Joint Venture Agreement on the Raglan Hills Property in southeast Ontario.

The Company optioned the Dundonald Property to Avion Resources Corp.

The Company provided Xstrata Nickel with formal notification to terminate the Foy Mouth Option Agreement.

2008 Outlook

For 2008 the Company has previously issued guidance (February 12, 2008 press release) whereby the Company expects to produce between 3.8 and 4.4 million pounds of payable nickel, and between 2.3 and 2.7 million pounds of payable copper. The Company 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.

The engineering and technical investigations for a new life of mine development and production plan, with the goal of determining the investment capital needed to substantially increase mine production, extend the mine life, and significantly improve operating efficiencies continues.

Non-GAAP Performance Measures

This press release contains non-GAAP measures like operating cost per tonne of ore, net cash cost per pound of nickel, etc. Please see the Company's MD&A on SEDAR for discussion on non-GAAP performance measures.

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 contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the cash flows, metal prices, decrease costs, increase output, expected production, and expected exploration expenditures. 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 factors include fluctuating metal prices, 2008 production forecast, lower unit costs and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. 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.
William Anderson
President & CEO
(416) 362-7050
(416) 362-9050 (FAX)
Email: wanderson@firstnickel.com
Website: www.firstnickel.com

Tim Went Nuts Today

Timminco shines with solar deal

Thursday, March 27, 2008

If you keep a mental file of stocks you should have bought but didn't, add Timminco Ltd. to the heap. The company, which produces specialty metals for a number of industries, announced[amp]nbsp;late Wednesday[amp]nbsp;that it had agreed to supply solar-grade silicon to Q-Cells AG, a German company that is the largest supplier of solar cells.

Did someone say “solar”? Timminco's shares jumped about 25 per cent on the news when trading began on Thursday, and have held that level throughout the day. The shares traded in Toronto at $25.90, up $5.01. This latest surge is nothing, though: The shares are up more than 3,900 per cent over the past 12 months, trading at just 65 cents a year ago.

The three analysts who updated their research since the Timminco-Q-Cells news broke (but before the shares jumped), have maintained their recommendations and 12-month target prices on the stock. But if you're wondering if there are more gains ahead for Timminco, the combined views of the analyst may not help you make a decision.

The Cormark Securities analyst is maintaining a “reduce” recommendation with a target of $19.50 – representing a downside of 25 per cent. At the other extreme, the Clarus Securities analyst is maintaining a “buy” recommendation with a target of $40 – representing an upside of more than 50 per cent.

And if you take the Goldilocks approach to investing (not too hot, not too cold), then the National Bank Financial analyst may be just what you're looking for: he has a “sector perform” recommendation and a $24 target. That target is either going to have to get bumped up, given Thursday's rally, or his recommendation is going to have to come down.

[amp]nbsp;

© Copyright The Globe and Mail

Timminco Announces Solar Grade Silicon Supply Agreement with Q-Cells AG

23:59 EDT Wednesday, March 26, 2008
TORONTO, ONTARIO--(Marketwire - March 26, 2008) - Timminco Limited ("Timminco") (TSX:TIM) today announced that its wholly-owned subsidiary, Becancour Silicon Inc. ("BSI"), has entered into an agreement to supply solar grade silicon to Q-Cells AG ("Q-Cells") (FRANKFURT:QCE). Q-Cells is the world's largest manufacturer of solar cells.

Under the terms of the agreement, BSI will supply Q-Cells with contractually fixed supplies of 410 metric tons (mt) in 2008 and 3,000 mt in 2009 at fixed prices. The deliveries start immediately. Until the end of July 2008 the partners will negotiate a further contract on the delivery of up to 6,000 mt per year in the years 2010 to 2013. The price for these possible further supplies will be negotiated contingent upon market conditions. With this contract Q-Cells will become BSI's largest customer for solar grade silicon in 2009.

This agreement represents BSI's fifth long-term commercial contract for the sale of high purity silicon. In the event that Q-Cells and BSI agree to extend the contract to 6,000 mt per year for the period 2010 to 2013, this contract would raise the committed deliveries of BSI's solar grade silicon business to 12,000 mt per year beginning in 2010. On February 22, 2008 Timminco announced the expansion of BSI's solar grade silicon capacity to 14,400 mt per year, with the incremental capacity fully on stream by the end of the second quarter of 2009.

"BSI has developed a proprietary process which enables it to produce solar grade silicon by purifying metallurgical silicon. Q-Cells has tested unblended material from BSI extensively and has obtained very good results in cell production", said Mr. Anton Milner, CEO of Q-Cells.

"This contract represents a giant step for our solar grade silicon business. Q-Cells is a leader in the photovoltaic industry and their endorsement of our material through this supply agreement is further evidence of the paradigm shift we are creating in the solar grade silicon market." said Mr. Rene Boisvert, President and CEO of BSI.

ABOUT TIMMINCO

Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, magnesium extrusions and other specialty metals for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

Timminco loses $18.03-million in 2007
2008-03-17 19:40 ET - News Release
Dr. Heinz Schimmelbusch reports
TIMMINCO REPORTS FOURTH QUARTER AND YEAR END FISCAL 2007 RESULTS
Timminco Ltd. has released its preliminary financial results for the fourth quarter and fiscal year ended Dec. 31, 2007.
Highlights for the fourth quarter:
Completed construction of solar-grade silicon manufacturing facility with annual production capacity of 3,600 metric tons;
Commenced production on the first of three 1,200-metric-ton lines;
Shipped 33 metric tons of solar-grade silicon, bringing cumulative year-to-date shipments to 89 metric tons;
Sales of $36.4-million compared with $47.6-million for fiscal 2006;
Net loss of $8.8-million, or eight cents per share, compared with a net loss of $38.7-million, or 53 cents per share, in the fourth quarter of 2006.
Highlights for fiscal 2007:
Secured sales contracts with four key customers for approximately 28,000 metric tons of solar-grade silicon through 2012;
Completed two bought-deal equity offerings and a private placement generating gross proceeds of $116.2-million, primarily to finance expansion of solar-grade silicon production capacity;
Sales of $166.2-million compared with $181.8-million for fiscal 2006;
Net loss of $18.0-million, or 20 cents per share, compared with a net loss of $46.2-million, or 62 cents per share, for fiscal 2006.
Highlights subsequent to quarter-end:
Commenced production on second and third of three 1,200-metric-ton lines;
Announced further expansion of annual production capacity of solar-grade silicon from 3,600 to 14,400 metric tons;
S&P/TSX Composite Index revised to include Timminco as of March 24, 2008.
Overview
Timminco has two reporting segments:
The silicon group, which includes the silicon metal and solar silicon businesses;
The magnesium group, which includes the magnesium extrusion and fabrication business.
Timminco also has a minority investment in an aluminum wheels business.

"Fiscal 2007 was a year of transition for Timminco as we focused on establishing production and securing our first customer contracts in our solar-grade silicon business, while at the same time positioning our silicon metal and magnesium businesses for improved performance going forward," said Dr. Heinz Schimmelbusch, chairman of the board and chief executive officer of Timminco. "In December, less than six months after breaking ground on our 3,600-metric-ton solar-grade silicon facility, we commenced production and now have all three lines operating. Before year-end, we had also secured four long-term contracts that commit us to supply up to 6,000 metric tons per year of solar-grade silicon beginning in 2009.

Based on our success to date, as well as a strong pipeline of prospective customers, we made the decision last month to expand our production capacity to 14,400 metric tons annually. Looking ahead, we are firmly focused on leveraging our position as a low-cost producer of solar-grade silicon to capitalize on the tremendous opportunity in the high-growth solar photovoltaic energy industry."

Dr. Schimmelbusch continued: "We are optimistic about the potential for both our historical silicon metal business and our magnesium business. The rise in silicon metal prices, which have more than doubled over the last 24 months, has created a favourable environment for our silicon metal business for the foreseeable future. Following the restructuring of our magnesium business in 2007, we are focused on bringing our cost structure in line with the goal of returning this business to profitability."

Results for the fourth quarter

Sales for the fourth quarter of 2007 were $36.4-million, compared with sales of $47.6-million for the fourth quarter of 2006. The decrease is the result of lower sales in both the silicon group and the magnesium group. The appreciation of the Canadian dollar had an unfavourable impact of reducing reported sales by $4.6-million compared with the fourth quarter of fiscal 2006. During the fourth quarter of fiscal 2007, the average United States/Canadian-dollar exchange rate was approximately 98 cents, compared with approximately $1.13 for the fourth quarter of fiscal 2006.

Net loss for the fourth quarter of fiscal 2007 was $8.8-million, or eight cents per share, compared with a net loss of $38.7-million, or 53 cents per share, for the fourth quarter of 2006. Included in the net loss for the fourth quarter of 2006 is an asset impairment charge of $31.2-million.

Cash and short-term investments at Dec. 31, 2007, were $34.6-million, compared with $800,000 at Dec. 31, 2006. The increase was the result of gross proceeds from two bought-deal equity offerings and a private placement in fiscal 2007 that generated gross proceeds of $116.2-million. The majority of cash used during the period was related to building the solar-grade silicon facility and the repayment of long-term debt. Bank indebtedness at Dec. 31, 2007, was $21,000, compared with $26.2-million at Dec. 31, 2006.
Fiscal 2007 results

Sales for fiscal 2007 were $166.2-million, compared with $181.8-million for fiscal 2006. The appreciation of the Canadian dollar had the unfavourable impact of reducing reported sales by $6.7-million. During fiscal 2007, the average U.S./Canadian-dollar exchange rate was approximately $1.08, compared with approximately $1.13 for fiscal 2006.
The net loss for fiscal 2007 was $18.0-million, or 20 cents per share, compared with a net loss of $46.2-million, or 62 cents per share, for fiscal 2006. Included in the net loss for fiscal 2006 are restructuring and impairment charges of $33.2-million.

U.S. GDP provides final tally

U.S. GDP provides final tally



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

The release of the fourth-quarter U.S. gross domestic product data today marks the final tally in sizing up last year, but investors are now busily assessing the severity of the current slowdown.

The economic clouds were already building late last year. The recent GDP estimate has been sliced $5.1-billion (U.S.) as a result of downward revisions to personal consumption expenditures, residential and non-residential construction, and capital spending, according to Merrill Lynch & Co. Inc. But those cuts were almost entirely offset by the growth in trade and inventories, it said.

WHAT ARE THE EXPECTATIONS?

The GDP for the fourth quarter is forecast to have increased an annual rate of 0.6 per cent, which is unchanged from the previous estimate and down from a 4.9-per-cent growth rate in the third quarter. Merrill Lynch is not expecting any GDP growth in the first quarter of 2008 and it is looking for a modest drop in the second.

And share prices are reflecting worries over the weak consumer, credit concerns and inflation.
“I think it’s a value market because price-to-earnings multiples are not too demanding right now,” said Tony Genua, portfolio manager for AGF U.S. Equities American Growth Class Fund. The fund has $620-million under management, while associated U.S. funds bring assets under management to almost $1-billion.

“Outside of the banking industry, I think we will see good results,” Mr. Genua said. “We are going to see continuing challenges when it comes to the financial sector. I think they will disappoint.”

But within that sector Mr. Genua likes asset managers such as T. Rowe Price Group Inc., Charles Schwab Corp. and Ameriprise Financial Inc. They should benefit from demographic trends and the need for financial advisers, he said.

Other holdings in the AGF portfolio are Monsanto Co., Google Inc., Gilead Sciences Inc. and Apple Inc., which benefit from research spending that generates new products and services. “Innovation is very important to me,” Mr. Genua said.

“At one time, the price-to-earnings ratio of Google seemed high,” he said. “Who would have thought when Google came public 31/2 years ago they would be looking at [forecast 2008] earnings of $20 (U.S.) a share.” Google’s shares closed yesterday at $458.19.



© Copyright The Globe and Mail

Market News: After the Bell The close:

Market News: After the Bell The close:

It's commodities dayRTGAMIt seems as though it was just last week - wait a minute, it was just last week - when observers were commenting about the necessary downturn in commodity prices and the long overdue rebound in financial stocks. On Wednesday, those comments looked like nothing more than a head-fake, with commodity stocks rallying and financials heading back into the basement.Gold rose to $949.20 (U.S.) an ounce in New York, up $14.20.

That's still 8 per cent below its recent record high, but gold certainly has momentum on its side now. Similarly, crude oil futures rose to $105.90 a barrel in New York, up $4.68. Again, that's 4 per cent below the record, but the gap is closing fast.

This is good news for the commodities-heavy SP/TSX composite index, which closed at 13,390.34, up 68.12 points or 0.5 per cent. Talisman Energy Inc. rose 5.7 per cent, EnCana Corp. rose 2.2 per cent and Barrick Gold Corp. rose 5.1 per cent.

On the down side, though, financials fell on renewed pessimism over whether the worst really is over for the U.S. economy and the enormous writedowns taken by banks around the world. Bank of Montreal fell 4.2 per cent and Royal Bank of Canada fell 2.5 per cent.The commodity-light Dow Jones industrial average closed at 12,422.86, down 109.74 points or 0.9 per cent.

Exxon Mobil Corp. rose 1.2 per cent, but Citigroup Inc. fell 5.6 per cent and JPMorgan Chase [amp]amp; Co. fell 4.2 per cent.The broader S[amp]amp;P 500 closed at 1341.13, down 11.86 points or 0.9 per cent. There, the big laggards included Citigroup, JPMorgan, Cisco Systems Inc. and Bank of America after Meredith Whitney, the influential analyst at Oppenheimer [amp]amp; Co., lowered her earnings forecasts for a number of U.S. investment banks.Still, not every financial stock was in the doldrums.

Bear Stearns Cos. Inc. rose as high as $12 in the afternoon - before closing at $11.21, up 2.5 per cent - or 20 per cent above the new-and-improved $10 a share takeover offer from JPMorgan, as investors bet that there is another, newer-and-more-improved offer in the works. Optimism pops up in the strangest of places.[amp]nbsp;Copyright 2001 The Globe and Mail

PDP- Undervalued Oil Play Target 17.40-25.00

Canadian Arrow Begins Consultations with Treaty No. 3 First Nations

Canadian Arrow Begins Consultations with Treaty No. 3 First Nations for Kenbridge Nickel Project


08:00 EDT Tuesday, March 25, 2008

SUDBURY, ON, March 25 /CNW/ - Canadian Arrow Mines, Ltd. (CRO: TSX-V) (the "Company), is pleased to report that it has commenced formal consultations with the Anishinaabe Nation in Treaty No. 3 regarding the company's Kenbridge Nickel Project in Northwestern Ontario. Kenbridge is a nickel-copper deposit located within Treaty No. 3 traditional territory, a distance of approximately 60 km southeast from the city of Kenora.

As outlined in the November 5, 2007 news release "Canadian Arrow and Treaty No. 3 discuss Kenbridge Nickel Project", the company has engaged local First Nations early in the project's development and is seeking authorization for the project through the Treaty No. 3 resource law known as Manito Aki Inakonigaawin, or The Great Earth Law. Representatives from Canadian Arrow Mines, Treaty No. 3 Grand Council and the four First Nations communities near Kenbridge (Naotkamegwanning, Northwest Angle No. 33, Northwest Angle No. 37, Onigaming) recently met in Kenora for further discussions on the project. It was decided there that Treaty No. 3 would create a task force with representation from the Grand Council and the four communities to participate in the consultation process with Canadian Arrow Mines.

Kim Tyler, President of Canadian Arrow, comments; "We are very pleased to advance discussions on the Kenbridge Nickel Project with Treaty No. 3 to the consultation phase. Our work at Kenbridge will soon shift away from exploration and into permitting and project design. Arrow believes the area around the Kenbridge Nickel Project contains excellent exploration potential, so building a strong relationship with Treaty No. 3 is a priority for us. We look forward to future discussions with Treaty No.3 on project participation, employment, business opportunities and education."
Canadian Arrow continues to advance the Kenbridge Nickel Project, recently completing a Preliminary Economic Assessment and purchasing several key long lead items. The company's plans for 2008 include consultations with Treaty No. 3, completing a bankable feasibility study, beginning regional exploration work and conducting an advanced exploration program later in the year.


About Canadian Arrow Mines, Ltd.


Canadian Arrow Mines, Ltd. is an established Canadian exploration and development Company committed to developing and advancing base metal deposits close to existing infrastructure through exploration, development and acquisition. Shares of Canadian Arrow Mines trade on the TSX Venture Exchange under the symbol "CRO".


If you would like to receive press releases via email please contact: sarah@chfir.com.


THIS PRESS RELEASE WAS PREPARED BY MANAGEMENT WHO TAKES FULL

RESPONSIBILITY FOR ITS CONTENTS.


THE TSX VENTURE EXCHANGE NEITHER APPROVES NOR DISAPPROVES OF THIS PRESS

RELEASE.


This news release may contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with The TSX Venture Exchange, Canadian Securities Commissions, and the United States Securities & Exchange Commission. Not to be construed as an offer to buy or sell securities of this company.


%SEDAR: 00008534E

For further information: visit the website at www.canadianarrowmines.ca, or call toll free, 1-877-262-6354, or contact: Canadian Arrow Mines, Ltd., R. Kim Tyler, P. Geo, President, Tel: (705) 673-8259, E-mail: kim@canadianarrowmines.ca; CHF Investor Relations, Barry Leung, Tel: (416) 868-1079 x247, E-mail: barry@chfir.com or Sarah Gingerich, Tel: (416) 868-1079 x238, E-mail:sarah@chfir.com

First Nickel Intersects 86.70 Metres of 0.55% Ni and 0.43% Cu on West Graham

First Nickel Intersects 86.70 Metres of 0.55% Ni and 0.43% Cu on West Graham


08:00 EDT Tuesday, March 25, 2008

TORONTO, ONTARIO--(Marketwire - March 25, 2008) - First Nickel Inc. (TSX:FNI) is pleased to report the results of 22 diamond drill holes representing 5,469 metres of diamond drilling on the West Graham Property during the 2007 exploration program and the first two holes of the 2008 exploration program (to see the plan map for drill hole locations please click on the following link: http://media3.marketwire.com/docs/FIRSNI325.pdf). The West Graham property is under option from Landore Resources Canada Inc. and the details of the option agreement were provided in a press release dated August 4, 2005.

The current drill program has been designed to provide the drill density required to complete an NI 43-101 compliant Resource Estimate on the Conwest Deposit (which forms part of the West Graham Property) in 2008. The drill program has been expanded to a total of 10,000 metres based on the results to date and is scheduled for completion in June 2008. The new NI 43-101 Resource Estimate will be completed after all analytical results have been received and modeled for 2007-2008 drill program.

Results to date have met expectations based on the previous exploration programs completed by First Nickel. Highlights of the drill program include FNI2045 with 0.59% Ni and 0.44% Cu over 70.20 metres, including 1.14% Ni and 0.60% Cu over 10.50 metres; and FNI2050 with 0.55% Ni and 0.43% Cu over 86.70 metres, including 1.15% Ni and 0.71% Cu over 12.70 metres. The following table summarizes the significant analytical results from the ongoing drill program.

The Conwest Deposit was estimated in the 1960's to have a mineral inventory of 4.3 million tons grading 0.53% nickel and 0.33% copper. This historic resource predates the implementation of NI 43-101 standards and guidelines and should be considered non-compliant. At depth the Conwest Deposit is interpreted to be contiguous with the Lockerby East zone.

The diamond drilling program is being carried out under the supervision of First Nickel's Senior Geologist, Scot Halladay, P.Geo., a "qualified person" as defined by National Instrument 43-101. The information in this release was prepared under the direction of Paul Davis, P.Geo., Vice President of Exploration for First Nickel Inc., a "qualified person" as defined by National Instrument 43-101. First Nickel Inc. follows a rigorous QA/QC protocol on all of its exploration projects. Drill core of interest (NQ size) is sawn in half, with one half retained for future reference and one half sent to a commercial laboratory, SGS Laboratories in Garson for preparation and specific gravity measurements and shipped internally by SGS to Toronto for assay. A rigorous quality assurance/quality control program is employed which includes the insertion of standards and blanks for each batch of samples.


Drill
Hole ID From To Length Ni Cu Co Pt Pd Au Ag
(m) (m) (m) (%) (%) (%) (ppm) (ppm) (ppm) (ppm)

FNI2031 396.00 450.00 54.00 0.59 0.39 0.02 0.17 0.03 0.06 3.18
FNI2032 45.00 71.15 26.15 0.41 0.21 0.01 0.09 0.03 0.04 2.13
FNI2034 103.50 114.00 10.50 0.46 0.31 0.01 0.06 0.03 0.03 2.47
FNI2035 108.00 114.00 36.50 0.61 0.34 0.02 0.07 0.03 0.03 3.46
incl. 124.70 131.80 7.10 1.16 0.50 0.04 0.08 0.04 0.03 3.65
FNI2039 96.00 159.00 63.00 0.40 0.24 0.01 0.07 0.03 0.03 2.27
FNI2040 139.50 148.50 9.00 0.43 0.35 0.02 0.06 0.02 0.03 4.38
FNI2041 118.50 180.00 61.50 0.46 0.35 0.01 0.06 0.03 0.02 2.69
incl. 168.00 177.00 9.00 1.03 0.53 0.03 0.11 0.04 0.03 4.69
FNI2043 138.30 201.00 62.70 0.39 0.32 0.01 0.08 0.02 0.03 3.18
FNI2044 153.10 207.15 54.05 0.45 0.25 0.01 0.06 0.03 0.04 2.83
Incl. 192.90 195.15 2.25 1.76 0.30 0.05 0.06 0.08 0.03 3.55
FNI2045 239.90 310.10 70.20 0.59 0.44 0.01 0.12 0.03 0.05 5.92
incl. 279.00 289.50 10.50 1.14 0.60 0.03 0.13 0.05 0.06 4.44
FNI2046 246.90 333.00 86.10 0.45 0.28 0.01 0.11 0.03 0.03 3.29
incl. 294.85 295.55 0.70 5.81 0.10 0.12 0.10 0.04 0.00 4.62
FNI2047 330.00 339.00 9.00 0.70 0.58 0.03 0.22 0.04 0.09 4.93
FNI2048 233.00 246.50 13.50 0.49 0.32 0.02 0.22 0.04 0.05 2.89
FNI2049 237.70 259.20 21.50 0.40 0.26 0.01 0.07 0.03 0.03 3.20
FNI2050 280.90 367.60 86.70 0.55 0.43 0.02 0.14 0.03 0.05 4.75
incl. 316.70 329.40 12.70 1.15 0.71 0.04 0.15 0.05 0.05 5.74
All assay intervals reported are core length and do not represent true
widths (defined as being measured at right angles to the direction of
extension of the sulphide body). All other assay samples are pending
analysis.


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.

FOR FURTHER INFORMATION PLEASE CONTACT:

First Nickel Inc.
William Anderson
President & CEO
(416) 362-7050 or Toll Free: 1-888-362-7050
(416) 362-9050 (FAX)
Email: wanderson@firstnickel.com


or
Forbes West
Investor Relations Advisor
(416) 203-2200 or 1-888-655-5532


Email: forbes@sherbournegroup.ca

Market Overview

'When everyone else is flipping out, don't follow suit.' "Sir Charles Templeton

Breakwater Exercises Right of Purchase Under Myra Falls Mine

Breakwater Exercises Right of Purchase Under Myra Falls Mine Limited Partnership

ccnm



TORONTO, ONTARIO--(Marketwire - March 25, 2008) - Breakwater Resources Ltd. (TSX:BWR) has exercised its right to purchase the interests of the limited and general partners of the Myra Falls Mine Limited Partnership (MFML Partnership) for approximately $18 million (90.9% of the $20 million contribution to the Qualifying Environmental Trust (QET)). Breakwater has elected to purchase the interest by issuing 13,518,739 common shares of Breakwater at $1.3448 which, pursuant to the agreement, is the 20-day weighted average trading price of Breakwater's common shares on the Toronto Stock Exchange the day before the exercise of the right.


Pursuant to the joint venture entered into with the limited partners of the MFML Partnership in December 2007, the MFML Partnership was entitled to a 3% net smelter royalty from the Myra Falls mine. The MFML Partnership deposited $20 million with a trustee into a QET as security for a portion of the reclamation obligations of NVI Mining Ltd., a wholly-owned subsidiary of Breakwater, which owns the Myra Falls mine.


The common shares of Breakwater to be issued as part of the exercise of its rights are not freely tradeable until April 21, 2008.


Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates to customers around the world. The Company's concentrate production is derived from four mines. Two of Breakwater's mines are located in Canada, one is located in Chile and one is located in Honduras.



FOR FURTHER INFORMATION PLEASE CONTACT:

Breakwater Resources Ltd.
Dave Langille
Vice President, Finance and Chief Financial Officer
(416) 363-4798 Ext. 236




or

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

Volatility? This is nothing

Volatility? This is nothing

Monday, March 24, 2008

Here's an idea that should make you feel good about the current bout of volatility that has gripped stock markets: It is actually a return to normal, after a long period of low volatility.
According to Bespoke Investment Group, 44 of the last 90 trading days have seen the S[amp]amp;P 500 move up or down by 1 per cent. And 15 of the last 90 trading days have seen moves of 2 per cent.

Strange days. But Bespoke compared this volatility to other periods and found it is not so unordinary. The number of 1 per cent days hit 64 out of 90 trading days in 2002, 56 out of 90 trading days in 1988, and 54 out of 90 trading days in 1974. These periods also saw far more days of 2 per cent swings as well.

“The reason why so many people are so frantic about volatility is because it was extremely low preceding the current period,” Bespoke said on its blog, noting that it was rare to see a 1 per cent day from about 2004 to 2007. As for 2 per cent days, they simply did not exist during this period.

© Copyright The Globe and Mail

The Weeks Weak End

Pescods letter

Five reasons to start worrying

Five reasons to start worrying
TheStar.com - Canada - Five reasons to start worrying

BRENDAN MCDERMID/REUTERS FILE PHOTO

New York Stock Exchange traders look worried as U.S. stock market indexes tumble in response to central bank intervention in the crisis gripping investment banker Bear Stearns, March 14, 2008.

RECESSION MANUAL

• Stay (or get) liquid.

• Pay with cash or debit.

• Two credit cards are enough, and keep a zero balance.

• Retire the gas-guzzler.

• Check out used hybrids.

• Diversify: Company stock should not be a big part of your portfolio.

• Bargain-priced blue-chip stocks eventually should.

• Exploit current low rates to lock in a long-term mortgage.

• See Canada first. Euro-travel is exorbitant.

–David Olive

Financial world's woes are spilling over to Main Street, and threatening Canada

March 22, 2008

David Olive
Columnist

"The basis for optimism is sheer terror." – Oscar Wilde

This week began in trauma.

It was announced Monday that one of the world's largest securities firms, Bear Stearns & Co. Inc., had effectively gone bankrupt. And that, in a most unusual step, the U.S. Federal Reserve had hastily arranged a forced marriage between Bear Stearns and the larger JP Morgan Chase & Co., America's third-largest bank. Stock markets worldwide plunged in response.

The week ended with traumatized speculation about which illustrious bank or brokerage would be next to go toes up, and whether the Fed, other central bankers worldwide, and cool heads at the financial institutions themselves had the collective wit to stave off a meltdown in the global financial system.

Oh, and the United States appears to be heading into the worst recession in a generation.

There was at least one sanguine voice this week, that of U.S. President George W. Bush. Against the backdrop of the global credit crisis, a greenback plunging to a new record low against the euro, a housing collapse, a looming bear market for stocks and mounting joblessness, Bush took a brief moment between Florida fundraisers to tell the world that its biggest consumer economy remained "fundamentally sound."

The same day Bush spoke, Representative Louise Slaughter (D-NY), surveying the layoffs, plant closings and other economic wreckage in her western New York district, had a different take on economic conditions. She called them "terrifying."

Most of Bear Stearns' 14,000 employees will lose their jobs and began early in the week calling recruiters. Even before the Bear Stearns collapse, the Bank of Canada had warned that the U.S. downturn is likely to inflict considerable damage on Canada.

The latest conventional wisdom has the rest of the world "decoupling" from the U.S., what with China, India and Europe emerging as rival economic superpowers. But we're not nearly there yet.

The effective demise of Bear Stearns sent stocks tumbling on exchanges worldwide, including Toronto, and European stock values fell back to 2005 levels. U.S. and European employers began warning that their financial outlook for 2008 and even 2009 had turned cloudy, and many large firms announced layoffs to shore up their finances.

The damage would have been far worse save for a residual faith – hope? – that the Fed and other central bankers worldwide can prevent more linchpins of the global financial system from coming loose.

And that recent efforts by the Bush administration and the U.S. Congress to assist the jobless and those still facing foreclosure – and the Harper government's effort last month to assist distressed regions – will prevent a "hard" landing for the economy.

And that bargain-hunters will emerge soon to snap up battered stocks, putting a floor, finally, under sagging prices that are eroding the middle-class nest eggs of mutual-fund owners.

So, how worried should we be? Worried enough, at least, to batten the hatches. Consider:

1. TANKING COMMODITIES WILL HURT CANADA

In his maiden speech last week as governor of the Bank of Canada, Mark Carney was the bearer of bad news. The high commodity prices for everything from oil to wheat that have largely insulated Canada from the early phases of the U.S. economic slowdown are due for a fall, pulling down Canada's economic growth rate in 2008.

By the reckoning of some economists, Canadian GDP growth might clock in at zero this year, which means some economic sectors actually will shrink, resulting in job loss and punishing declines in personal income.

The slide in commodity prices has already begun, with crude oil slipping 4.5 per cent Wednesday, its biggest one-day drop in 17 years, and gold falling below $1,000 an ounce the same day in its biggest single-day decline since 2006.

World currency markets reacted to the blows to the Canadian resource economy by selling off the loonie, which fell below 99 cents (U.S.) on Wednesday, its sharpest one-day drop in 47 years.

Demand for Canadian oil and natural gas, base metals, canola and soybeans – all of which have touched record highs of late – will decline as the year progresses. U.S. demand for our goods will fall, but so will demand from China, India and other developing-world economies.

Determined, finally, to rein in runaway inflation, China is targeting lower growth of 8 per cent this year, compared with 11 per cent in 2007, which will reduce China's role in driving up global prices for Canada's food, fuel and metals. Chinese exports to the United States, like Canada's, are expected to take a hit from a U.S. slowdown.

"The big fall is coming," London investment counsellor David Roche of Independent Strategies wrote this week. In 2007, as financial and real-estate investments soured, speculators seeking refuge in gold, copper, uranium and other raw materials Canada produces in abundance came to account for more than half of all commodities trading.

But the speculators' ardour for nickel and soybeans will decline sharply as China finally pulls back on its GDP growth, creating big world surpluses – and price declines – in everything from zinc to cold-rolled steel. Roche forecasts a 30 per cent price drop in refined oil in 2008, and a decline of 20 per cent to 30 per cent for base metals.

Lest anyone think of this as a strictly Western Canadian setback, note that the Western oil patch in good years spends tens of millions of dollars annually on extraction equipment made in Ontario and Quebec.

2. BANK PARALYSIS DRIES UP CREDIT.

The global financial system is in the sick bay. And there's no confident prognosis of when recovery can be expected.

Many global lenders' capital bases are in danger – the factor that caused Bear Stearns' collapse. Since January of last year, the world's largest banks and brokerages have suffered a collective loss of $181 billion (U.S.) on loan losses and reserves set aside for bad loans. Those losses have so severely depleted the treasuries of Citigroup Inc., Merrill Lynch Inc. and Swiss banking giant UBS AG, the largest bank in Europe, that all three have secured Red Cross injections of capital from state-owned investment funds and other investors in the Middle East and Asia.

The capital shortage at financial institutions has been worsened by the moribund condition of the markets for takeovers and initial public offerings (IPOs), depriving the banks and brokers of lucrative fees just when they need them.

Then again, overpriced, highly leveraged takeovers made at the height of acquisition exuberance in 2005 to 2007 are yet another source of the banks' current woes. Worldwide, banks, brokerages, hedge funds and even municipal pension-fund plans are on the hook for more than $1 trillion (U.S.) worth of buyout debt.

This is debt that private equity deal makers piled onto Chrysler LLC's balance sheet, and intend to burden Ma Bell parent BCE Inc. with so that those takeover targets can be made to pay the cost of their own acquisition.

Three New York-based banks and brokers alone, including Lehman Brothers Holdings Inc. (the subject of bankruptcy rumours this week), are saddled with more than $300 billion (U.S.) in private equity debt.

Contemplating such losses from at least some of the takeovers they financed, along with the near certainty of a wave of consumer-credit defaults on car, credit-card and other borrowing as the U.S. recession deepens, bankers are especially tight with money these days. That would be the case even if they weren't girding for further losses from the bursting of the $8 trillion (U.S.) housing bubble.

That's why banks worldwide have been hoarding cash by raising their lending rates – both to dissuade borrowers and to strengthen their balance sheets with higher rates imposed on their most creditworthy customers – even as the U.S. Fed slashed rates by 0.75 percentage points this week in still another bid to stimulate the economy.

If the bankers and the Fed appear to be acting at cross-purposes, so be it: The banks are being extra cautious for fear of being next on the list of lenders forcibly merged out of existence. The resulting capital drought is yet another drag on an already anemic U.S. economy.

3. LOSS OF TRUST

As of March 13, Bear Stearns was telling anyone who asked that it was in fine shape. Next day, it told Washington it was on death's door. Northern Rock PLC, Britain's largest mortgage lender and the first government-bailout casualty, was similarly sanguine about its prospects until a sudden bank run brought it to its knees.

As of late last year, Fed chair Ben Bernanke was insisting the crisis in subprime-mortgage defaults would not migrate into the larger U.S. economy, much less the global one.

Before he became a big investor in Wells Fargo & Co., the biggest bank on the U.S. West Coast, Warren Buffett counselled investors against banks. They can too easily hide their problems, he warned.

Bankers know that better than anyone, which is why they exhibited more than the usual suspicion this week in lending to each other – an essential function of modern global banking that keeps the system liquid. Interbank loans are cut off – as happened to Bear Stearns March 13 – when fellow banks and brokers abruptly cease lending to a peer they fear will not be good for the money.

The bankers and the Fed and other U.S. financial regulators have themselves to blame for the trust deficit that has grown since the credit crisis began seven months ago. That's when Bear Stearns found it could not recapitalize two of its hedge funds stuffed with "subprime" mortgages, the toxic instruments at the heart of the global credit crisis.

Earlier this decade, millions of low-income Americans, often making no down payment and offering no collateral, were induced to buy homes they couldn't afford, lured by low, "teaser" rates that currently are "resetting" at often usurious levels.

The premise was that home prices nationwide had never fallen, and that people who took out these junk or "wishful thinking" mortgages, as New York Times financial columnist David Leonhardt has called them, would be able to renegotiate their mortgages later at more favourable rates.

All the additional home-buying did ignite a boom in U.S. home prices, but this classic South Sea bubble burst last year, with prices falling between 30 per cent and 50 per cent.

With the regulators' after-the-fact approval, the world financial system was tricked up with a proliferation of devices for disguising "bundles" of subprime mortgages and other junk. These convoluted "innovations" included "structured investment vehicles" (SIVs), "collateralized debt obligations" (CDOs) and "asset-backed commercial paper" (ABCP), stuff that bank CEOs didn't understand or even know were in the bank's portfolio.

In a game of hot potato, banks unloaded this junk far and wide in bundles stamped with triple-A creditworthiness stickers, the recipients raking off their fees only to flip the package again until a $475,000 split-level in suburban Toledo whose low-income subprime mortgagee could no longer make the payments had found its way into the portfolio of a municipal employees pension plan in Hamburg or, remarkably, enough, an agency of the Ontario Treasurer.

About two years ago, Ed Clark, CEO of Toronto Dominion Bank, stumbled across an operation within his bank engaged in trading this unfamiliar exotica.

On discovering that the junior-ranking staff playing with the new toys could not explain how they worked, Clark demanded the stuff be immediately dumped (near the top of the market, as good luck would have it).

The Bear Stearns debacle and its aftershocks "stems from a loss of trust in the whole system of modern finance, with all its complex slicing and dicing or risk into ever more opaque forms," veteran financial markets columnist Gillian Tett wrote this week in the U.K. Financial Times.

"This trend is not just damaging the credibility of banks, but the aura of omnipotence that has enveloped institutions such as the U.S. Federal Reserve in recent years."

4. CORPORATE EXPANSION STALLS.

As long as the credit crunch persists, consumer and corporate borrowing will be constrained. Which means a longer-than-usual wait for that car loan and the small-business start-up loan. Also jeopardized are routine lines of credit by which enterprises simply keep the lights on, along with more substantial loans for corporate expansion that creates jobs, new product lines and new geographic markets.

Corporate strategies are on hold across North America. Western Canadian pipeline projects await financing, and branch-plant operations as varied as Home Depot Inc. and Sears Canada have Canadian expansion plans on hold. Consumer-products giant Procter & Gamble Co. can't jettison its pet food business or Braun small-appliances unit for lack of credible buyers. Venerable enterprises like apparel retailer Talbots Inc. and struggling newcomers such as Internet phone provider Vonage Holdings Corp. are equally stymied in obtaining credit.

"Getting the financing done, whether on our side or the other, is impossible," Gary Rodkin, chief executive of U.S. consumer food giant ConAgra Foods Inc., told the Wall Street Journal this week. "It's crystal clear: Financing is almost nonexistent."

5. U.S. CONSUMER FATIGUE.

As a U.S. recession deepens, its effects will be felt ever more widely in Canada. In slower sales of the minivans that roll off Chrysler's immense plant in Windsor, for instance – almost all destined for the U.S. market. Or at Waterloo's Research In Motion Ltd. if Wall Street steps up its tradition during slumps of laying off tens of thousands of white-collar BlackBerry addicts.

The entire B.C. economy is reliant on timber sales to a barely breathing U.S. new-house market.

It's said that the burgeoning middle class in China and India are developing a taste for North American goods. And it's true that Buicks that can't be given away in North America have lately become status symbols in Shanghai and Nanjing.

For all that, though, China boasts a consumer economy of about $1 trillion and India of a mere $600 million.

In the U.S., where shopping is famously referred to as "retail therapy," the consumer economy rings up about $9 trillion in annual sales.

Without robust American spending on Canadian goods, including patronage of our huge tourism sector, many Canadians will feel the pain. Bank of Canada governor Mark Carney was right, up to a point, that Canada benefits from "strength in domestic demand. We have a number of very strong fundamentals – corporate balance sheets, bank balance sheets, household balance sheets."

But our GDP is more export-oriented than most G-7 countries, and the bulk of those exports still head south. This is going to be, to say the least, a challenging next two years for Canadian exporters and for Canadian firms like TD Bank, Manulife Financial Inc., Tim Hortons Inc. and Alimentation Couche-Tard Ltée., which have aggressive growth plans in the U.S. in banking, insurance, fast food and convenience-store retailing, respectively. They'll be on the front lines as Americans cope with spending within their means.

CEO Howard Schwartz, as if he didn't have enough of a challenge in attempting a turnaround at struggling Starbucks Corp., told shareholders Wednesday at the coffee chain's annual meeting that, "You have an economy that really is in a tailspin, and many would say the consumer is in a recession. We're dealing with things we haven't seen before in terms of how people are responding to how tough it is."

With so many U.S. financiers "staring into the jaws of hell," as one New York analyst put it last week, a best-case scenario can't be ruled out. Lenders are newly cautious. There's still a lot of restless money out there in Asian and Middle Eastern "sovereign wealth funds" and traditional North American and European asset-management funds.

If worst comes to worst, the United States may end up creating a state agency to relieve troubled lenders of their junk – which the Fed effectively began to do by accepting a liberal definition of collateral in return for emergency bank financing.

It would be a costly gambit, reminiscent of Resolution Trust Corp., which picked up the pieces after the U.S. savings and loan disaster of the 1980s, whose total cost, while enormous by contemporary standards, would seem like chicken feed compared to this catastrophe.

Better that, though, than a great unwinding of the global financial system – although there's room to wonder if America, facing a $3 trillion debt in Iraq and Afghanistan, can resort to a rescue for the ages without resorting to printing the currency to fund it.

Canada, the new dog

At the open: Canada, the new dog

Thursday, March 20, 2008
The Canadian stock market followed commodity prices downward on Thursday at the start of trading, which isn't a surprise given its heavy concentration on energy and metals.

The S[amp]amp;P/TSX composite index dipped 195 points, or 1.5 per cent, bringing it to 12,515 and adding to yesterday's woes. The big banks were fairly strong, led by Bank of Montreal's 5.5 per cent surge following news that it may have avoided a $1.5-billion writedown.

But commodity producers took it on the chin after gold fell to $915 (U.S.) an ounce, down $29, and crude oil fell more than $3 a barrel to $98.59. Talisman Energy Inc. fell 1.9 per cent, EnCana Corp. fell 2.4 per cent and Barrick Gold Corp. fell 4.8 per cent.

The Canadian dollar, which has long been associated with commodity prices, tumbled 1.1 cents next to the U.S. dollar, to 97.6 cents.

The downturn in Canadian stocks marks a sudden divergence with the U.S. market, where things appear to be picking up. The Dow Jones industrial average rose 31 points in early trading, or 0.3 per cent, to 12,131. American International Group Inc. rose 3 per cent, General Electric Co. rose 2.5 per cent and Citigroup Inc. rose 1.9 per cent

Market News: After the Bell

Market News: After the Bell


The close: Uh-oh

RTGAM




So much for the budding stock market rally. North American stocks returned to their losing ways on Wednesday, but with a notable difference: This particular downturn was led by commodities rather than financials.


The commodity-heavy S[amp]amp;P/TSX composite index plunged 415.33 points or 3.2 per cent, bringing the benchmark index to 12,721.37. Among the 252 stocks in the index, 85 per cent fell. It was the biggest one-day dip since the index swooned by 4.8 per cent on Jan. 21, marking what many observers still hope is the bottom of the market.


But while banks got off with a light slap, the drubbing was reserved for the former stars: Potash Corp. of Saskatchewan Inc. fell 7.7 per cent, Barrick Gold Corp. fell 6.7 per cent, Suncor Energy Inc. fell 6.1 per cent and EnCana Corp. fell 4.5 per cent.


Of course, plummeting commodity prices are at the centre of much of the volatility. Gold futures, which crossed the $1,000-an-ounce threshold just last week, fell to $944.40 an ounce in New York, down $37.84. Crude oil fell to $104.48 a barrel, down $4.94.


The Canadian dollar, which has had a tendency to track commodity prices, was also walloped. In late afternoon trading, it fell by 2.3 cents (U.S.) to 98.5 cents, its biggest one-day drop since November.


In the United States, the Dow Jones industrial average closed at 12,099.66, down 293 points or 2.4 per cent, erasing most of Tuesday's gains. There, 29 of the 30 stocks in the blue-chip index fell. Commodity producers were the biggest losers, with Alcoa Inc. falling 7.7 per cent, Chevron Corp. falling 4.9 per cent and Exxon Mobil Corp. falling 5.6 per cent.


The financials, which had been in recovery mode until the afternoon, turned south, although the losses were fairly tame. Citigroup Inc. fell 1.5 per cent and JPMorgan Chase [amp]amp; Co. fell 0.6 per cent.


Meanwhile, the broader S[amp]amp;P 500 closed at 1298.52, down 32.22 points or 2.4 per cent. Monsanto Co., which has been one of the go-to names for investors wanting exposure to the booming agriculture business, plunged 11.8 per cent, epitomizing the rush out of commodity-related investments.


"The important thing to keep in mind is that this is just one trading session," said Andrew Pyle, an investment executive at Scotia Capital. "Commodity plays are safe if funds don't start to exit en masse on the view that global growth is slowing. After what we've been through, few will wait to pull the trigger to crystallize profits and this could become a self-fulfilling prophecy for weaker commodity prices going forward."


[amp]nbsp;

Copyright 2001 The Globe and Mail

Petrolifera 2007 revenue increases 27% to US$134mn,

Petrolifera 2007 revenue increases 27% to US$134mn, profits fall - RegionalTuesday, March 18, 2008

Calgary-based Petrolifera Petroleum (TSX: PDP), which operates in South America, made 2007 revenue of Cdn$134mn (US$134mn), up 27% from Cdn$106mn the year before, the company said in a statement.

Net profits for the year fell 21% from Cdn$37.3mn in 2006 to Cdn$29.3mn in 2007.
Revenue growth in 2007 was constrained by the strength of the Canadian dollar relative to the US dollar and the Argentine peso, according to the statement.

"As in 2006, all our growth in 2007 was organic," Petrolifera CEO Richard Gusella said in a conference call with investors. "We accomplished all this with no rigs available in early 2007 and delays in the arrival of contracted rigs."

Energy shortages also affected Argentina throughout the year, he said.

Sales in 2007 increased 34% to 8,279boe/d from 6,171boe/d in 2006.
Production is currently pushing 10,000boe/d because of drilling successes in early 2008, Gusella said, adding output stands at 8,700b/d of oil and 1,000boe/d of natural gas.
Production is expected to rise when the impact of a completed waterflood project is seen in mid-2008.

In 2007, Petrolifera completed 33 new crude oil, two natural gas and three water injector wells in Argentina. The company secured three new concessions in Argentina and three in Colombia during the year, bringing Petrolifera's total land position to 7M undeveloped acres (28,330km2) in Argentina, Colombia and Peru.

Proved 1P reserves increased 28% to 17.8Mboe in 2007 from 12.9Mboe in 2006. Proved, probable and possible 3P reserves were 39Mboe.
The company invested Cdn$111mn in 2007, Cdn$98mn of that in Argentina. The remaining Cdn$12mn went to Peru and Colombia.

Petrolifera plans to invest US$76mn in Argentina in 2008 and has budgeted Cdn$56mn for Peru.

ARGENTINE TAXES

The Argentine export tax hike, which had the effect of capping prices at US$42/b in November 2007, had an adverse impact on investor attitude towards the Argentine oil industry, according to the statement.

"It's a questionable policy as it can only mean shortages and a loss of self-reliance for Argentina in the future," Gusella said.

The company received an average of Cdn$45.51/b for crude in 2007, a 5% drop from Cdn$47.71/b in 2006.

By comparison, WTI averaged US$72.31/b in 2007 and late in the year surpassed US$100/b, while averaging more than US$90/b in 4Q07, according to the statement.
Argentina could be planning to increase the price cap on oil soon, Gusella said.
Business News Americas

PDP- Pescod Again Friday

Petrolifera Petroleum Limited reports 2007 year end results and schedules conference call

Petrolifera Petroleum Limited reports 2007 year end results and schedules conference call March 17, 2008, 9:00 A.M. MT

CALGARY, Mar 14, 2008 (Canada NewsWire via COMTEX) -- (Canada NewsWire)

Petrolifera Petroleum Limited (PDP - TSX) had a productive year in 2007. It was in many ways more complicated than prior years, but resulted in your company entering 2008 with more land, more reserves, higher production and sales and the prospect ahead of it of exciting drilling activity in Colombia and Peru. As previously announced, all results for 2006 mentioned herein have been restated. Certain statements contained in this press release contain forward looking information. See "Forward Looking Information".

These year end results will be subject to a Conference Call event. To listen to this Conference Call please enter: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2188560 in your web browser. To participate in the live conference call please dial either (416) 644-3414 or (800) 733-7560. A replay of the event will be available from March 17, 2008 at 11:00 a.m. MT until March 24, 2008 at 11:59 p.m. MT. To listen to the replay please dial either (416) 640-1917 or (877) 289-8525 and enter the passcode 21264784 followed by the pound sign.
Highlights were as follows: Click here for additional information

2007 IN REVIEW

Petrolifera experienced considerable progress and growth during 2007. The company has a meaningful reserves, production and sales base in Argentina. During the year, the company expanded into Colombia and secured three new concessions, thereby increasing to three the number of South American countries in which Petrolifera is active. Our extensive land base provides attractive diversification, risk distribution and exposure to significant resource potential.

In addition to a very successful drilling program during the year in Argentina, field facilities and a high pressure natural gas pipeline were constructed and activated at our Puesto Morales Norte operation in the Neuquén Basin, Argentina. This program was comprised of $97.5 million of capital spending and included the drilling of 47 wells at Puesto Morales and Rinconada.
Rig availability limited Petrolifera's activity during the early part of 2007. We also experienced delays arising from the assumption of direct operatorship and the need to redesign the various facilities required by the company to properly manage its production operations.

Also, equipment shortages and delays in the fabrication of facilities during the year as a result of energy shortages in Argentina, during their winter months, affected overall intrayear production and sales levels. By year end, however, these facilities had been constructed and activated and improved production stability and growth is anticipated as a consequence as the impact of our newly activated waterflood becomes evident.

During 2007, Petrolifera was successful in securing six new concessions, three in Argentina at Vaca Mahuida and Puesto Guevara in the Province of Rio Negro, Argentina and one at Gobernador Ayala II in La Pampa Province, Argentina; and three in the Middle and Upper Magdalena Basins (Sierra Nevada I and II and Turpial) in Colombia. This expanded land base exposes Petrolifera to additional potential and exploration programs will be activated on these blocks during 2008.

Revenue for the year was healthy at $133 million. This was achieved despite the adverse impact of Argentina's export tax on pricing of crude oil in their domestic market, where Petrolifera's light gravity Medanito crude oil production is sold. This tax was further increased in late 2007. The increase in the tax, which had the effect of placing a cap on crude oil prices in Argentina, had a marked adverse impact on investor's attitudes towards the Argentinean oil industry, as the effect of the tax took away the prospect of improving prices as world oil prices rise. It profoundly affected our share price, well in excess of the calculated adverse financial effect, although some recovery has since occurred due to our strong reserve growth and successful completion and activation of our new field facilities.

During 2007, the average price received of $45.51 per barrel of crude oil was five percent below the 2006 price of $47.71 per barrel. By comparison, WTI averaged US$72.31 per barrel during 2007 and late in the year surpassed US$100Â per barrel while averaging over US$90.00 per barrel in the fourth quarter 2007.

Petrolifera's natural gas sales price improved 14 percent in 2007 to $1.55 per mcf from $1.36 per mcf in 2006. As with crude oil, this price in Argentina is well below comparable levels in most regional and global markets, well below comparative energy value and undoubtedly a contributing factor to low reinvestment levels and consequent shortages in local markets.
On an equivalent basis, Petrolifera's selling price in 2007 was $43.94Â per boe, also five percent lower than last year given the significant production weighting to crude oil. More realistic pricing policies will be needed in Argentina to stimulate new investment, especially as the country is approaching the prospective need to import energy to meet its domestic requirements and as other countries in South America enable producers to secure world prices.

In the interim, we will continue a responsible reinvestment program to protect our discoveries, reserve base and revenue stream in Argentina and would expand our activity if improved returns were discernible. Despite these challenges, we have been successful in our programs since 2005.
As a result of inflationary pressures and occasional production curtailments during the construction and startup phases of our new facilities at Puesto Morales, operating costs rose to $6.05 per boe during 2007, still low by worldwide industry standards. Last year when most of our wells were flowing crude oil wells, our operating costs were only $4.49 per boe. We anticipate that as our wells are all tied in, on site treatment occurs and sales are all transported to market through our own pipelines for both crude oil and natural gas, as opposed to trucking significant volumes of crude oil, our operating costs can remain competitive. There is considerable inflationary pressure in Argentina at present which will have to be taken into account in our future planning and budgeting.

Despite the adverse impact of Argentinean price controls, our corporate netback per boe in 2007 was $32.58, representing a significant 74 percent of selling prices. Netbacks do not have a standardized meaning prescribed by Canadian GAAP. It is a calculation used by management as a measurement of efficiency. Boe netbacks are calculated by deducting royalties and operating costs from revenue (including interest income earned) by the number of boe sold in a reporting period. The most comparable measures calculated in accordance with GAAP would be net earnings. Netbacks are reconciled with net earnings in our MD&A.

During 2007, Petrolifera's Argentina finding and development costs, calculated in accordance with the requirements of NI 51-101, were $9.59 per boe for 1P reserves and $20.61 per boe for 2P reserves. This results in a one- year recycle ratio (calculated by dividing the corporate netback per boe by the respective finding and development cost per boe) of 3.4 times for 1P and 1.6 times for 2P reserves. Readers should note that the aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year of the estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year.

Using three year average finding costs for the period from 2005 to and including 2007, calculated by dividing the sum of annual finding costs calculated in accordance with NI 51-101 for each year, by the number of years so calculated, results in a more reliable indicator of finding and development costs, especially for a project like the discovery and development of Puesto Morales Norte field.


Petrolifera's finding and development costs calculated in this manner were $5.37 for 1P reserves and $5.76 for 2P reserves. When compared to our 2007 netback, our calculated recycle ratio is 6.1 times for 1P reserves and 5.7 times for 2P reserves. These are considered to be very favorable ratios.
Cash flow amounted to $68 million ($1.43 per share) in 2007, compared to only $50 million ($1.27 per share) in 2006. This was achieved after provision for $21 million of current taxes during 2007 and $26 million last year.
Capital spending totaled $111 million, mostly in Argentina, where $98Â million was invested in wells, seismic and facilities. The balance of approximately $13 million was spent in Peru and in Colombia. We completed an extensive airborne gravity and magnetic survey of our Ucayali Block 107 during 2007 and also initiated our 2D seismic program on that block. Environmental Impact Assessment ("EIA") and other work continued on Block 106 in the Maranon Basin onshore Peru. We established an office in Colombia and secured three new 100 percent owned onshore concessions in that country.

Earnings were a healthy $29.3 million ($0.61 per share), although lower than in 2006 when earnings were $37.3 million ($0.95 per share). Higher non-cash charges, including a fair value charge against the value of our asset backed commercial paper ("ABCP") investments and charges for stock based compensation due to increased share price volatility, were factors in reducing year over year earnings.

During 2007, our investments in ABCP, in which we had invested successfully since 2006, became illiquid due to the problems which arose in credit markets in Canada and the United States and then worldwide during 2007. Petrolifera had purchased this form of investment with surplus cash, with an emphasis on security of principal. We had restricted such investments to highly rated commercial paper and until mid 2007 had not experienced any problem with this type of investment, rolling over proceeds on maturity into new similarly rated instruments. Furthermore, it was felt that investing our surplus funds in Canada was a prudent decision due to the historical stability of Canadian capital markets.

Unfortunately, liquidity evaporated in mid-2007 and we have been unable to recover our funds and related interest owing since August of last year. Due to this, we provided for an impairment of these investments in the third and fourth quarter of 2007 and reclassified these short term investments to long term, thereby reducing working capital. We and other holders of ABCP are awaiting receipt of a proposal from the Pan-Canadian Committee, formed to resolve the loss of liquidity in the Canadian ABCP money market. As noted in earlier releases, the investments which are now frozen were made through the auspices of the money market desk of the Canadian commercial bank with which we had dealt in Canada since our inception and were rated R-1 High by Dominion Bond Rating Service, the rating agency. We continue to seek solutions to this dilemma with a view to recovering all or substantially all of our invested funds, plus interest if at all possible and we are examining all available alternatives in this regard. Unfortunately, there can be no assurance that such efforts will result in a full or satisfactory recovery of our funds.

Fortuitously, prior to the credit crisis we had made arrangements for a new reserve-backed credit facility with an international bank. This was established at US$100 million with an initial agreed availability of US$60Â million, which amount is currently under review following the tabling of our 2007 reserve report. At this writing and based on the expansion of our 1PÂ reserve base, we anticipate the available facility will be expanded, despite the adverse impact of new Argentinean taxation which was taken into account in the new report and adversely affects economic values. We also established a non-recourse credit facility for up to an additional $18 million with a Canadian chartered bank, with such amount solely secured by our illiquid ABCP holdings.
As our 2007 capital expenditures exceeded our cash flow, we were not self-sufficient during the year. Accordingly, because we could not access our cash balances which were invested in ABCP, we incurred bank debt for the first time in the company's history during the year. We continued to have significant unused credit available at year end and our current debt to 2007 cash flow ratio of 0.4 times, calculated by dividing outstanding debt by 2007 cash flow, is very conservative.

During the year, 6.5 million common shares were issued from treasury upon the exercise of outstanding warrants and options under our Stock Option Plan. Proceeds totaled $18 million and were added to working capital.

As previously reported, Petrolifera's proved reserves ("1P") of crude oil, natural gas liquids and natural gas increased 38 percent during 2007 to reach 17.8 million boe at December 31, 2007. Proved and probable reserves ("2P") improved modestly to 25.6 million boe after record production of approximately three million boe during the year. In 2007, we also had 3P reserves estimated for the first time since 2005, when it was undertaken by a different evaluator. A total of 13.5 million boe of possible reserves were identified, bringing our 3P reserves to a total of 39 million boe. When combined with our production of 2006 and 2007, Petrolifera's Puesto Morales Norte field and surrounding areas appears to be an accumulation with recoverable 3P reserves of approximately 45 million boe, a significant accomplishment in any basin, but particularly so in the Neuquén Basin, as it is considered mature by industry standards. These reserve volumes were estimated by GLJ Petroleum Consultants ("GLJ"), independent engineering consultants of Calgary, Alberta.

Fourth Quarter 2007

Petrolifera's fourth quarter 2007 results were weaker than the third quarter and than the similar period last year. Crude oil sales were 6,565Â bbl/d and natural gas sales were 2.9 mmcf/d, or 7,042 boe/d on an equivalent basis. This is considerably below 2006 levels when flush production was being realized from new prolific wells at Puesto Morales. Also, sales were lower than reported third quarter 2007 results, when equivalent sales were 7,557 boe/d. This trend has now been reversed with the completion of construction of new facilities at Puesto Morales, contributions from new wells and improved stability in field operations.

Revenue in the reporting period was $27 million compared to $31 million in the previous quarter and $45 million in 2006, reflecting lower crude oil prices in Argentina due to the effect of higher export taxes and the strength of the Canadian dollar, which appreciated almost 20 percent against the USÂ dollar during 2007.

The average price received for crude oil sales in the fourth quarter of 2007 was $44.36 per barrel and boe prices were $42.07 per boe, the lowest for the year.

Cash flow was a modest $10.7 million (0.21 per share) due to higher provisions for cash taxes compared to the prior quarter in 2007 and below 2006 due to lower volumes and higher costs. In 2006, fourth quarter cash flow was a record $18.5 million ($0.42 per share).
Earnings in the fourth quarter 2007 were $4.9 million ($0.10 per share), essentially the same as the third quarter earnings but considerably less than in 2006 when fourth quarter net income was $12.4 million ($0.29 per share).

Capital spending in the fourth quarter 2007 was substantial at $57.6Â million as the company operated four rigs in Argentina for much of the period and also completed its field facility construction program.

Current production in Argentina has recently surpassed 9,700 boe/d and improved financial and operating results are anticipated throughout 2008.
Outlook Petrolifera plans an active and exciting capital program in 2008. It is anticipated this program will be dominated by our anticipated drilling in Peru on Ucayali Block 107, after we complete our 2D seismic program and interpret the data. Early returns are encouraging although a full interpretation will be required. Timing will depend upon rig availability, government EIA approval, scheduling and normal industry factors which can affect operations in a jungle environment. An active 2D seismic program is also planned over selected portions of Maranon Block 106 with a view to drilling in 2009, again subject to the usual conditions and qualifiers related to regulatory approval and rig availability and the timely completion of the planned seismic program. Our Peru budget for 2008 is estimated at approximately $56 million.
In Argentina, we have allocated $76 million for new drilling and seismic at Puesto Morales, Rinconada, Vaca Mahuida, Puesto Guevara and Gobernador Ayala II. With our Puesto Morales facilities now completed, our focus again turns to exploration with a view to finding new pools for future development.
Recently, we completed the excellent PMNa-1081 well, located in proximity to our recently completed and successful Loma Montosa Zone 9 crude oil wells in the northwest portion of the Puesto Morales Norte Field. The 1081 well encountered a previously untapped Sierras Blancas accumulation which, on test at original reservoir pressure, flowed light gravity crude oil at rates in excess of 1,000 bbl/d. At least two follow up locations have initially been identified for drilling.
Based on log analysis and drilling results, up to eight zones in four formations, including the Loma Montosa, in our first exploratory well on the Puesto Morales Este concession have been or are to be evaluated for hydrocarbons by an ongoing testing program. Test results of the Sierras Blancas zone in the well were equivocal as minor amounts of crude oil and uphole natural gas with water were recovered. However, we remain optimistic of the concessions potential based on the results obtained to date, including indications of a common oil/water contact with the Puesto Morales Norte Field.
In Colombia, Petrolifera has already identified three drillable prospects on our Sierra Nevada I license and exploration activity is anticipated for our Sierra Nevada TEA and the Turpial Block. At least one well will be drilled during 2008 to meet contractual obligations on Sierra Nevada I, although programs may be expanded to include the drilling of up to three wells before year end 2008, alone or with partners.
Petrolifera remains strong, is focused and is committed to the principal of enhancing shareholder value through its activities in South America. Readers and shareholders are referred to the company's website at www.petrolifera.ca for occasional updates on activity and to access regularly updated investor presentations.
Petrolifera Petroleum Limited is a public Canadian crude oil and natural gas exploration and production company engaged in drilling production and sales activity in Argentina, Colombia and Peru in South America. The company's current reserve, production and sales derive from its Puesto Morales/Rinconada Concession in the Neuquén Basin, Argentina. Two large licenses comprising 5.2 million acres onshore Peru are also held 100 percent by the company. Petrolfiera recently entered Colombia and holds one license and two technical evaluation agreements in the Lower and Middle Magdalena Basin. Active drilling, facility construction and exploration programs are planned in all three jurisdictions during 2008 with an announced capital budget approximating $140 million.
FORWARD LOOKING INFORMATION
This press release contains forward-looking information, including but not limited to estimated reserves and future net revenues, future exploration and development plans and the anticipated timing associated therewith, anticipated capital expenditures and sources of funding in respect thereof, anticipated production growth from planned capital programs, current production and the recently activated waterflood, anticipated productivity of certain recently drilled wells and follow-up potential to the PME x-1001 exploratory well which is presently being tested and potential recovery of investments in ABCP. This 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.
The reserves and future net revenue in this press release represent estimates only. The reserves and future net revenue from the company's properties have been independently evaluated by GLJ with effective date of December 31, 2007. This evaluation includes a number of assumptions relating to factors such as initial production rates, production decline rates, ultimate recovery of reserves, timing and amount of capital expenditures, marketability of production, future prices of crude oil and natural gas, operating costs, well abandonment and salvage values, royalties and other government levies that may be imposed during the producing life of the reserves. These assumptions were based on price forecasts in use at December 31, 2007 and many of these assumptions are subject to change and are beyond the control of the company. Actual production, sales and cash flows derived therefrom will vary from the evaluation and such variations could be material. The present value of estimated future net cash flows referred to herein should not be construed as the current market value of estimated crude oil and natural gas reserves attributable to the company's properties. Reference is made to the Company's Annual Information Form for a detailed description of the assumptions utilized in the reserves report prepared by GLJ.
Forecast capital expenditures are based on Petrolifera's current budgets and development plans which are subject to change based on commodity prices, market conditions, drilling success and potential timing delays. Petrolifera's capital budget has been prepared based upon anticipated costs for equipment and services which are subject to fluctuation based upon market conditions, availability and potential charges or delays in capital expenditures. Additionally, forecast capital expenditures do not include capital required to pursue future acquisitions. Anticipated production growth has been estimated based on the proposed drilling program with a success rate based upon historical drilling success and an evaluation of the particular wells to be drilled and has been risked, current production and anticipated decline rates and the projected impact of the company's waterflood program.
Recovery of the company's investment in ABCP is dependent on the value of the underlying assets held by the applicable trusts (which is unknown to the company) and the restoration of liquidity in this market. There can be no assurance as to the timing or extent of recovery of this investment.
Due to the risks, uncertainties and assumptions inherent in forward-looking information, prospective investors in the company's securities should not place undue reliance on this forward-looking information. Readers should review the risk-factors set forth in the company's Annual Information Form, available at www.sedar.com, for a detailed description of the risks and uncertainties facing the company. Forward looking information contained in this press release is made as of the date hereof and are subject to change. The company assumes no obligation to revise or update forward looking information to reflect new circumstances, except as required by law.
A barrel of oil equivalent (boe), derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil, may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following is dated as of March 14, 2008 and should be read in conjunction with the consolidated financial statements of Petrolifera Petroleum Limited ("Petrolifera" or the "company") for the years ended December 31, 2007 and 2006 as contained in this annual report.
The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") and are presented in Canadian dollars. This MD&A provides management's view of the financial condition of the company and the results of its operations for the reporting periods. Information in this report contains forward-looking information based on current expectations, estimates and projections of future production, future commodity prices, capital expenditures and available sources of financing. See "Forward Looking Information". It should be noted forward-looking information involves a number of risks and uncertainties and actual results may vary materially from those anticipated by the company. These risks and uncertainties include, but are not limited to, political and economic conditions in the countries in which the company operates, changes in market conditions, law or governing policy, operating conditions and costs, operating performance, demand for crude oil and natural gas, foreign currency exchange rate fluctuations, currency controls, commercial negotiations and technical and economic factors. Reference should be made to Petrolifera's Annual Information Form for our year-ended December 31, 2007 for a detailed description of the risks and uncertainties facing Petrolifera. Throughout the MD&A, per barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil (6:1). The conversion is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead. Boes may be misleading, particularly if used in isolation.
SELECTED FINANCIAL INFORMATION Click here for additional information
Since incorporation, Petrolifera's management has concentrated on building a financially strong company. To this end, the company completed three equity financings, two by way of private placement and one by way of initial public offering, pursuant to a prospectus dated October 17, 2005. The company's common shares trade on the Toronto Stock Exchange under the symbol PDP.
Petrolifera conducts its business in Argentina, Colombia and Peru, in South America. Growth to date has been organic, derived from successful exploration and development drilling programs. This has resulted in an expanded crude oil, natural gas liquids ("NGL") and natural gas reserves base with attendant growth in production.
During 2007, Petrolifera completed a $111.0 million capital program. In Argentina, this included the drilling of 47 wells, and the design, construction and activation of the company's infrastructure and production facilities and three new exploratory concessions were acquired. In Peru, work included the completion of an aeromagnetic study, approval of Block 107's seismic EIA and Block 107 seismic acquisition. In Colombia, we established an office and secured three new exploration blocks.
Petrolifera faces the normal challenges, risks and opportunities of any small independent oil company. We strive to establish a competitive advantage by applying modern exploration techniques, being opportunistic, employing a consistent strategy and hiring national staff with in country expertise in our branch offices in Buenos Aires, Lima and Bogota. We also access professional advisors as required. Where possible it is our goal to operate our concessions with a large working interest acquired on a ground floor basis. In this manner, the company has greater control over its operations and its future business activities.
FINANCIAL AND OPERATING REVIEW
PRODUCTION, PRICING AND REVENUE Click here for additional information
Petroleum and natural gas revenues for 2007 were $132.8 million (2006 - $104.6 million) from crude oil sales of 7,919 bbl/d (2006 - 5,973 bbl/day) and natural gas sales of 2.2 mmcf/d (2006 - 1.2 mmcf/d). The increases in revenue primarily resulted from higher crude oil production volumes. These were derived from the successful development of the Puesto Morales crude oil and natural gas field in the Neuquén basin onshore Argentina, offset by a lower average realized price for crude oil.
Crude oil production increased 33 percent in 2007. New discoveries and development drilling resulted in production rising to an average of 7,919Â bbl/d. The company's boe sales volumes continue to be heavily weighted to crude oil, which represented 96 percent of the company's volumes in 2007 compared to 97 percent in 2006.
Crude oil prices decreased five percent to average $45.51 per barrel throughout the year compared to $47.71 in 2006. Argentinean crude oil prices reflect world prices for the respective quality of oil, adjusted for the impact of an Argentinean export tax on domestic sales prices. All of Petrolifera's production is sold in domestic markets. In November of 2007, the Argentine government announced an increase in the export tax that has the effect of limiting the price of crude oil to a maximum of US$42.00 per barrel, which impacted fourth quarter 2007 prices.
Natural gas prices increased 14 percent to average $1.55 per mcf in 2007 compared to $1.36 per mcf in 2006, reflecting some relaxation of regulated Argentinean natural gas prices, which are still substantially below prices prevailing in North American markets. Natural gas prices have been improving and are expected to continue improving in the future due to market conditions and new policy initiatives of the Argentine government aimed at gradual market deregulation. Late in 2007, the Company began selling natural gas under a new natural gas sales contract and now receives approximately US$2.10 per mcf, a substantial increase from the average of $1.55 per mcf received in 2007.
Interest and other income of $1.4 million was earned in 2007 compared to $1.0 million for 2006, This primarily relates to interest earned on short-term cash deposits and interest on the Company's investments. The company had an investment of $37.7 million face value in non-bank asset backed commercial paper ("ABCP") on which no interest income has been accrued since August 2007, due to the lack of liquidity for these investments. There are also fair value concerns for these investments and they were reclassified as a long term investment during the year. See long-term investments for additional details including estimates of valuation.
ROYALTIES
Royalties represent charges against production or revenue by governments and landowners. Included in royalties are revenue taxes levied by provincial jurisdictions. Royalties in 2007 were $17.5 million ($5.79 per boe), or 13Â percent of crude oil and natural gas revenue compared to $14.8 million ($6.57 per boe), or 14 percent of crude oil and natural gas revenue in 2006.
OPERATING EXPENSES AND NETBACKS
Company Netbacks(1) Click here for additional information
Petrolifera's netbacks decreased nine percent over those recorded in the 2006 reporting period. This primarily reflects a lower average sales price received for crude oil and an increase in operating expenses for the year. Petrolifera's calculated netback at $32.58 per boe is a healthy 74 percent of selling price (2006 - 77 percent).
OPERATING EXPENSES
Operating costs in 2007 increased 81 percent in total and 35 percent per boe from 2006. The overall increase reflects the higher volumes produced. Unit costs rose due to the significant increase in the number of wells that are on pump or require servicing on a more frequent basis, inflationary pressures, and start up costs related to the new field facilities. We anticipate these pressures can be mitigated in 2008 by a reduced dependency on trucking compared to the prior years as most of our Argentinean production is now being treated onsite and being transported through a company owned pipeline. Petrolifera anticipates unit operating costs will be more stable after the permanent field facilities and pipelines are optimally utilized. This is expected to occur during 2008 and 2009.
General and Administrative Expenses
General and administrative ("G&A") expenses were $6.4 million in 2007 (2006 - $3.7 million), comprised of costs incurred in Canada, Argentina, Peru and Colombia. These costs primarily consist of management and administrative salaries, legal and advisory fees, insurance, the cost of independent reserve reports, travel and other administrative expenses. The increase from 2006 is attributable to increased staffing levels to handle the expanded nature of the company's operations and activity levels and increased public company costs. G&A of $2.4 million was capitalized in 2007 (2006 - $0.7 million) mainly related to costs associated with exploration activities in Argentina, Peru and Colombia. Non-cash stock-based compensation costs of $6.8 million were recorded in the year (2006 - $3.6 million) for the calculated value of the stock options issued and vesting during the year. Stock-based compensation increased significantly from the prior year due to an increase in options outstanding and a volatile stock price. This volatility contributes to a higher calculated value per option issued, which value is expensed over the life of the option. Stock-based compensation is a non-cash charge against earnings.
FINANCE CHARGES
Included in the finance charges of $0.4 million for the year are interest paid and accrued on the outstanding debt and the pro-rata portion of the deferred financing charges that are being allocated over the life of the facility. The company did not have any debt outstanding in 2006.
FOREIGN EXCHANGE
The impact of fluctuations in the Argentinean peso and the US dollar relative to the Canadian dollar arising from settling foreign-denominated transactions and from translating foreign denominated financial statements and operating results of Petrolifera's integrated foreign operations resulted in a foreign exchange loss of $2.3 million in 2007 (2006 - $0.4 million loss). The company's main exposure to foreign currency risk relates to the pricing of crude oil sales, costs and capital expenditures and debt, which are largely denominated in US dollars and Argentinean pesos.
FAIR VALUE IMPAIRMENT - ABCP
In recognition of the loss of liquidity in the company's ABCP investment, a charge for a non-cash fair value impairment of $6.2 million was provided for in the financial statements. This represents 16% of the face value of the investment at the time of the loss of liquidity in the Canadian commercial paper market. The basis for this charge is explained under long term investments. It is not known when or whether these amounts can or will be recovered.
DEPLETION, DEPRECIATION AND ACCRETION ("DD&A")
DD&A is calculated using the unit-of-production method based on total estimated proved reserves. DD&A in 2007 was $16.9 million (2006 - $9.6Â million) or $5.59 per boe (2006 - $4.27 per boe). This includes a charge of $0.1 million (2006 - $0.03 million) to accrete the company's estimated asset retirement obligation. These charges will continue to be necessary in future to accrete the currently booked discounted liability of $5.6 million to the estimated total undiscounted liability of $11.3 million over the estimated remaining economic life of the company's crude oil and natural gas properties. Additionally, future development costs of $18.6 million for proved undeveloped reserves in Argentina have been included in the depletion calculation. Capital costs of $15.3 million related to unevaluated properties in Argentina, and other assets in the pre-production stage related to Peru and Colombia have been excluded from depletable costs. No proved reserves have yet been assigned to these projects.
CEILING TEST
Oil and gas companies are required to compare the recoverable value of their oil and gas assets to their recorded carrying value at the end of each reporting period. Excess carrying values over fair value are to be written off against earnings. No write-down was required in 2007 or in 2006 as a significant surplus exceeding $300 million was calculated pursuant to this test.
TAXES
The current income tax provision of $21.1 million for 2007 (2006 - $26.4Â million), primarily relates to income taxes in Argentina. Additionally, a future tax expense of $6.9 million for 2007 (2006 - recovery of $1.2 million) was recorded to recognize the changes in tax pool balances during the year. The increase in the effective tax rate to 49 percent in 2007 from 40 percent in 2006 is primarily caused by the impairment on the ABCP. Taxes other than income taxes of $2.1 million (2006 - $0.7 million) mainly represent taxes charged at a rate of 0.6 percent on all banking transactions in Argentina.
NET EARNINGS AND SHARES OUTSTANDING Click here for additional information
In 2007 the company reported earnings of $29.3 million (2006 - $37.3Â million), which equates to $0.61 (2006 - $0.95) per basic and $0.57Â (2006 - earnings of $0.75) per weighted average diluted share outstanding.
For 2007, the weighted average number of common shares outstanding was 48.0 million (2006 - 39.1 million). In 2007, 3.4 million additional shares (2006 - 10.8 million) were included in the diluted earnings per share calculations related to the potentially dilutive effect of options and warrants.
As at March 14, 2008, the company had the following securities issued and outstanding:

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Details of the exercise rights and terms of the warrants and options are noted in the Consolidated Financial Statements, included in this Annual Report.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations before working capital changes ("cash flow"), cash flow per share and cash flow per boe do not have standardized meanings prescribed by GAAP and therefore may not be comparable to similar measures used by other companies. Cash flow includes all cash flow from operating activities and is calculated before changes in non-cash working capital. The most comparable measure calculated in accordance with GAAP would be net earnings. Cash flow is reconciled with net earnings on the Consolidated Statement of Cash Flows and below. Cash flow per share is calculated by dividing cash flow by the weighted average shares outstanding; cash flow per boe is calculated by dividing cash flow by the quantum of crude oil and natural gas (expressed in boe) sold in the period. Management uses these non-GAAP measurements for its own performance measures and to provide its shareholders and investors with a measurement of the company's efficiency and its ability to fund a portion of its future growth expenditures.
Reconciliation of net earnings to cash flow: Click here for additional information
Cash flow in 2006 was $68.4 million (2006 - $49.8 million) which equates to $1.43 per basic share and $1.33 per diluted share compared to 2006 - $1.27Â per basic share and $1.00 per weighted average diluted share.
Cash flow increased by 37 percent overall due to higher crude oil production, offset by lower prices and higher costs. Cash flow per share increased 13 percent year over year and reflects the above factors and issuance of additional common shares in 2007 for the exercise of outstanding warrants and stock options.
CREDIT FACILITIES
During 2007 the company entered into two separate credit facilities. In September the Company finalized a US$100 million reserve-based revolving credit facility, with initial available draws established at US$60 million. The facility was for three years, bears interest at LIBOR plus a margin, is secured by a pledge of the shares of Petrolifera's subsidiaries and has a provision for a borrowing base adjustment every six months.
In December 2007 the company established an $18 million line of credit with a Canadian Chartered bank to partially restore the liquidity that has been frozen by the current credit crisis for ABCP. This facility pays interest a floating rate and is solely secured by the ABCP notes.
As of December 31, 2007, the reserve based facility had US$20.0 million outstanding and the line of credit facility had $9.9 million outstanding.
Capital Spending Click here for additional information
Capital spending in 2007 totaled $111.0 million, an increase of 205% over the $36.4 million spent in 2006. In Argentina, the company spent $97.5 million on the drilling of 47 wells, design, completion and activation of the crude oil water treatment facilities, and handling facilities associated with a waterflood project and the construction of a high-pressure natural gas pipeline. The Company spent $12.9 million in Peru for the completion of the Block 107 high-resolution airborne gravity-magnetic survey, the Block 107 seismic environmental impact assessment ("EIA"), the commencement of the Block 107 seismic program and further advancing the Block 106 EIA in preparation of a seismic program anticipated in 2008. In Colombia, the company spent $0.6Â million to secure new concessions, open an office and the reprocessing of seismic and on preliminary geological studies in anticipation of drilling during 2008.
At year end Petrolifera had a working capital deficit of $31.8 million, largely a result of reclassifying short term ABCP investments to long term and due to the incurrence of $29.6 million of borrowings from available credit facilities. The company has cash, cash flow and sufficient unused portions of its available credit facilities to fund its planned 2008 capital budget. It is the company's opinion that it has the financial wherewithal to repay its indebtedness pursuant to its terms under current industry conditions. As a public company, Petrolifera can, if it so chooses and if prevailing market conditions are favorable, raise new capital from the sale of equity or alternatives thereto from its treasury.
The company's 2008 approved capital program of $140 million includes expenditures to satisfy work commitments related to the Argentine, Peruvian and Colombian properties. The company has sufficient cash balances and cash flow is being generated in Argentina to fund these capital expenditures and funds are being moved among Canada, Barbados, Argentina, Peru and Colombia as required.
LONG-TERM INVESTMENTS
Due to the early success of the Argentinean drilling program since December 2006, after the company completed its initial public offering, significant cash balances were retained in Petrolifera's bank accounts. These funds were largely kept in Canada for capital preservation and security. In mid-2006 the company commenced a program to invest its surplus funds in high quality, highly rated, liquid commercial paper with a primary emphasis on security of capital. Investments were made in R-1 High rated ABCP, as rated by Dominion Bond Rating Service, sold to us by the money market facilities of a Canadian chartered bank with whom we held bank accounts. These investments were made in more than one issuing entity, were made for various time periods and were acquired to earn a reasonable return in relation to prevailing market conditions. On maturity proceeds including earned interest were generally reinvested on a regular basis.
In August 2007 the ABCP market experienced severe liquidity problems. This has caused the conduits that issued the notes to default on the redemption of the notes. As a result, holders could not receive their cash plus interest at maturity.
On September 6, 2007 a panel of banks, asset providers, and major investors formed the Pan-Canadian Investors Committee for Third-Party Structured Asset-Backed Commercial Paper ("Pan-Canadian Committee") to oversee a proposed restructuring process. The proposed restructuring called for the ABCP to be converted into longer term floating rate notes which more closely match the maturities of the underlying assets. On December 23, 2007, the Pan-Canadian Committee announced the framework of the restructuring of the conduits in which the company is invested. Under this framework, groups of assets from the trusts that are either wholly or partially represented by synthetic assets ("synthetic pool") will be pooled together and exchanged for two sets of notes, a senior note and a subordinated note. The ratio of the breakdown between senior and subordinated notes for any individual trust will be determined by the relative contribution of value of the assets contributed to the synthetic pool by the trust to the total value of the pool of synthetic assets. Also under the proposed restructuring, certain pools of the assets that do not qualify for the synthetic pool will remain in the trust and new notes will be distributed to the existing noteholders with a term similar to the maturities of the underlying assets ("non-qualifying pool"). Therefore, should the Pan-Canadian committee proposal be adopted it is anticipated that the company would receive three types of notes, synthetic pool senior notes, synthetic pool subordinated notes, and non-qualifying pool notes.
Quoted market values of the ABCP are not available due to the market disruption that is currently paralyzing the ABCP market. Management has therefore estimated the fair value of the owned ABCP based on a probabilistic recovery of principal and interest taking into account all relevant available information. Under this valuation method, several different outcomes of the recovery of the principal and interest are estimated considering the information available as at December 31, 2007. A weighted average recovery is then calculated. This weighted average recovery is used to determine the discounted cash flows that are expected from these investments. The recovery factors used for the synthetic pool notes were as follows: from 50 percent to 100 percent with a weighted average recovery of 98 percent for the principal portion of senior notes and from 0 percent to 50 percent with a weighted average recovery of 45 percent for the principal portion of the subordinated notes; from 0 percent to 100 percent with a weighted average recovery of 93Â percent for the interest applicable to senior notes and from 0 percent to 50 percent with a weighted average recovery of 45 percent for the interest applicable to the subordinated notes. The recovery factors used for the non-qualifying pool notes ranged from 0 percent to 100 percent with a weighted average recovery of 70 percent for principal portion and from 0 percent to 100Â with a weighted average recovery of 50 percent for interest applicable to the notes. The term for the synthetic pool notes was between two and nine years and for the non-qualifying pool notes the term was nine years. The fair value of the investment in ABCP is estimated to be $31.4 million which implies an impairment of $6.2 million or approximately 16 percent.
As at December 31, 2007, included in long-term investments were ABCP with a face value of $37.7 million. These investments are classified as Held for Trading and are carried at fair value which is assessed each reporting date. Previously these were classified as current assets and were part of working capital. Petrolifera has taken a non-cash impairment charge of $6.2 million against the carrying value of the notes classified as long term investments.
The theoretical fair value of the company's ABCP could range from $26.0Â million to $34.4 million using the same valuation methodology with alternative reasonably possible assumptions.
The company anticipates that it presently has sufficient cash resources and available credit to satisfy obligations as they come due. Assuming the ABCP problems are restructured in 2008 and normal liquidation for cash occurs, the company would be able to substantially reduce its indebtedness incurred from lack of access to these amounts.
The outcome of the restructuring process, actual timing and amount ultimately recoverable from these notes may differ materially from this estimate which would impact the company's earnings.
LEGAL PROCEEDINGS
Petrolifera is a party to an arbitration proceeding initiated by the former contract operator of the Puesto Morales/Rinconada block. The former operator is seeking financial compensation including damages for wrongful dismissal. Petrolifera is of the opinion that the claim is without merit and has filed a counterclaim against the former operator. Potential damages, if any, against the company are not quantifiable at this time, but in any event are not anticipated to be material to the company.
RELATED PARTY TRANSACTIONS AND SIGNIFICANT TRANSACTIONS
Under the terms of a Management Services Agreement with Connacher Oil and Gas Limited ("Connacher"), which has been extended on a month-to-month basis since its original term, which expired in May, 2007, Connacher provides some management and general and administrative services to assist in the administration of the company. The fee for this service is $15,000 per month. From time to time Connacher also pays bills on behalf of Petrolifera, for which it is reimbursed at cost. Connacher is also guarantor for Petrolifera in Peru and operator of record on behalf of Petrolifera in Colombia for which Connacher is indemnified by Petrolifera. Petrolifera paid Connacher $0.2Â million in 2007 under the management agreement which is anticipated to be replaced on substantially the same terms by a new agreement effective January 1, 2008.
SIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING
ESTIMATES
The significant accounting policies used by the company are described below. Certain accounting policies require that management make appropriate decisions with respect to the formulation of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in these judgments and estimates may have a material impact on the company's financial results and condition. The following discusses such accounting policies and is included in the MD&A to aid the reader in assessing the significant accounting policies and practices of the company and the likelihood of materially different results being reported. Management reviews its estimates regularly. The emergence of new information and changed circumstances may result in changes to estimates which could be material and the company might realize different results from the application of new accounting standards promulgated, from time to time, by various rule-making bodies.
The following assessment of significant accounting polices is not meant to be exhaustive.
Oil and Gas Reserves
Under Canadian Securities Regulators' "National Instrument 51-101-Standards of Disclosure for Oil and Gas Activities" ("NI 51-101") proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. In accordance with this definition, the level of certainty should result in a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves. In the case of probable reserves, which are less certain to be recovered than proved reserves, NI 51-101 states that it is equally likely that the actual remaining quantities recovered will be greater than or less than the sum of the estimated proved plus probable reserves. Possible reserves are those reserves less certain to be recovered than probable reserves. There is at least a 10Â percent probability that the quantities actually recovered will be equal to or exceed the sum of proved plus probable plus possible reserves.
The company's crude oil and natural gas reserve estimates are made by independent reservoir engineers using all available geological and reservoir data as well as historical production data. Estimates are reviewed and revised as appropriate. Revisions occur as a result of changes in prices, costs, fiscal regimes, reservoir performance or a change in the company's plans. The reserve estimates are also used in determining the company's borrowing base for its credit facilities and may impact the same upon revision or changes to the reserve estimates. The effect of changes in proved oil and gas reserves on the financial results and position of the company is described under the heading "Full Cost Accounting for Oil and Gas Activities".
Full Cost Accounting for Oil and Gas Activities
The company uses the full cost method of accounting for exploration and development activities. In accordance with this method of accounting, all costs associated with exploration and development are capitalized whether successful or not. The aggregate of net capitalized costs and estimated future development costs is amortized using the unit-of-production method based on estimated proved oil and gas reserves.
Major Development Projects and Unproved Properties
Certain costs related to major development projects and unproved properties are excluded from net capitalized costs subject to depletion until proved reserves have been determined, the project becomes commercial, or their value is impaired. These costs are reviewed quarterly and any impairment is transferred to the costs being depleted or, if the properties are located in a cost centre where there is no reserve base, the impairment is charged directly to income.
Full Cost Accounting Ceiling Test
The company is required to review the carrying value of all property, plant and equipment, including the carrying value of oil and gas assets, for potential impairment. Impairment is indicated if the carrying value of the long-lived asset or oil and gas cost centre is not recoverable by the future undiscounted cash flows. If impairment is indicated, the amount by which the carrying value exceeds the estimated fair value of the long-lived asset is charged to earnings.
The ceiling test is based on estimates of reserves, production rate, petroleum and natural gas prices, future costs and other relevant assumptions. By their nature these estimates are subject to measurement uncertainty and the impact on the consolidated financial statements could be material.
Asset Retirement Obligations
The company is required to provide for future removal and site restoration costs by estimating these costs in accordance with existing laws, contracts or other policies. These estimated costs are charged to earnings and the appropriate liability account over the expected service life of the asset. When the future removal and site restoration costs cannot be reasonably determined, a contingent liability may exist. Contingent liabilities are charged to earnings only when management is able to determine the amount and the likelihood of the future obligation. The company estimates future retirement costs based on current estimates adjusted for inflation and credit risk. These estimates are subject to measurement uncertainty.
Income Taxes
The company follows the liability method of accounting for income taxes. Under this method tax assets are recognized when it is more than likely realization will occur. Tax liabilities are recognized for temporary differences between recorded book values and underlying tax values. Rates used to determine income tax asset and liability amounts are enacted rates expected to be used in future periods when the timing differences change. The period in which a timing difference reverses are impacted by future income and capital expenditures. Rates are also affected by legislation changes.
Stock-Based Compensation
The company uses the fair value method to account for stock options. The determination of the amounts for stock-based compensation is based on assumptions of stock volatility, interest rates and the term of the option. These assumptions by their nature are subject to measurement uncertainty.
Legal, Environment Remediation and Other Contingent Matters
In respect of these matters, the company is required to determine whether a loss is probable based on judgment and interpretation of laws and regulations and determine if such a loss can be estimated. When any such loss is determined, it is charged to earnings. Management continually monitors known and potential contingent matters and makes appropriate provisions by charges to earnings when warranted by circumstance.
Foreign Currency Translation
Business conducted in Colombia and Peru is considered to be an "integrated foreign operation" for accounting purposes and, therefore, its financial statements are translated into Canadian dollars using the temporal method. Under the temporal method, the company translates foreign denominated monetary assets and liabilities at the exchange rate prevailing at year end; non-monetary assets, liabilities and related depletion and depreciation are translated at historic rates; revenues and expenses are translated at the average rate of exchange for the period; and any resulting foreign exchange gains or losses are included in operations.
During 2006, the company determined its Argentinean activities comprise a self-sustaining operation. Prior to this determination, the Argentinean operations were considered to be integrated with the Canadian operations and were translated using the temporal method described above. As a self-sustaining foreign operation, the Argentinean financial statements are translated into Canadian dollars using the current rate method, whereby assets and liabilities are translated at the rate of exchange in effect at the balance sheet date; revenues and expenses are translated at the average monthly rates of exchange during the period and gains or losses on translation are included as a foreign currency translation adjustment in the consolidated statement of comprehensive income and accumulated other comprehensive income (loss).
IMPACT OF NEW AND PROPOSED ACCOUNTING PRONOUNCEMENTS
Effective January 1, 2007 the company adopted CICA Handbook sections 1530, 3251, 3855, 3861 and 3865 relating to Comprehensive Income, Equity, Financial Instruments - Recognition and Measurement, Financial Instruments - Disclosure and Presentation, and Hedges, respectively. Under the new standards, additional financial statement disclosure, namely Consolidated Statements of Comprehensive Income, has been introduced. This statement identifies certain gains and losses, which in the company's case at this time, include only foreign currency translation adjustments arising from translation of the company's Argentinean business unit, that are recorded outside the income statement. Additionally, a separate component of equity, Accumulated Other Comprehensive Income, has been introduced to disclose other comprehensive income balances on a cumulative basis. Finally, all financial instruments, including derivatives, are recorded in the company's consolidated balance sheet and measured at their fair values.
Under section 3855, the company is required to classify its financial instruments into one of five categories. The company has classified all of its financial instruments, with the exception of the revolving bank debt facility, as Held for Trading, which requires measurement on the balance sheet at fair value with any changes in fair value recorded in earnings. This classification has been chosen due to the nature of the company's financial instruments. Transaction costs related to financial instruments classified as held for trading are recorded in earnings in accordance with the new standards.
The revolving bank debt facility has been classified as "other financial liabilities".
The adoption of section 3865, "Hedges", has had no effect on the company's consolidated financial statements as the company has no hedging transactions in place at this time.
Effective January 1, 2007, the company adopted the revised recommendations of CICA Handbook section 1506, Accounting Changes. The new recommendations permit voluntary changes in accounting policy only if they result in financial statements which provide more relevant and reliable financial information. Accounting policy changes must be applied retrospectively unless it is impractical to determine the period or cumulative impact of the change in policy. Additionally, when an entity has not applied a new primary source of GAAP that has been issued but is not yet effective, the entity must disclose that fact along with information relevant to assessing the possible impact that the application of the new primary source of GAAP will have on the entity's financial statements in the period of initial application.
As of January 1, 2008, the company will be required to adopt two new CICA Handbook requirements, section 3862, "Financial Instruments - Disclosures" and section 3863, "Financial Instruments - Presentation" which will replace current section 3861. The new standards require disclosure of the significance of financial instruments to an entity's financial statements, the risks associated with the financial instruments and how those risks are managed. The new presentation standard essentially carries forward the current presentation requirements. The company is assessing the impact of these new standards.
As of January 1, 2008, the company will be required to adopt CICA Handbook section 1535, "Capital Disclosures" which requires entities to disclose their objectives, policies and processes for managing capital and, in addition, whether the entity has complied with any externally imposed capital requirements. The company is assessing the impact of this new standard.
As of January 1, 2008, Petrolifera is required to adopt the CICA Handbook Section 3031, "Inventories," which will replace the existing inventories standard. The new standard requires inventory to be valued on a first-in, first-out or weighted average basis, which is consistent with Petrolifera's current treatment. The adoption of this standard should not have a material impact on Petrolifera's Consolidated Financial Statements.
In February 2008, the CICA issued Section 3064, Goodwill and Intangible Assets, replacing Section 3062, Goodwill and Other Intangible Assets and Section 3450, Research and Development Costs. Various changes have been made to other sections of the CICA Handbook for consistency purposes. The new Section will be applicable to financial statements relating to fiscal years beginning on or after October 1, 2008. Accordingly, the company will adopt the new standards for its fiscal year beginning January 1, 2009. It establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The company is currently evaluating the impact of the adoption of this new Section.
Over the next three years the CICA will adopt its new strategic plan for the direction of accounting standards in Canada, which was ratified in January 2006. As part of the plan, Canadian GAAP for public companies will converge with International Financial Reporting Standards ("IFRS") over the next three years. The company continues to monitor and assess the impact of the convergence of Canadian GAAP with IFRS.
Commitments, Contingencies, Guarantees, Contractual Obligations and Off
Balance Sheet Arrangements
In 2005 Petrolifera acquired two significant oil and gas exploration licenses in Peru. The licenses have a total US$41.8 million financial commitment to complete negotiated work programs on the two licenses over seven years. The company has the right to withdraw from the licenses at the end of each period associated with the term of the licenses. The first license term for Block 106 ended in 2007 and the company has met its commitment and is currently in the second license term with a commitment to invest a minimum of US$1.6 million in this term. These expenditures are budgeted to be fully discharged in 2008. In Block 107, the company is in the first term of the license and expects to complete all the required work commitments for the term during 2008. The company has issued letters of credit in the total amount of US$2.3 million to secure the capital expenditure requirements associated with the two exploration licenses in Peru.
In 2007 the Company was granted three concessions in Colombia with a total work commitment of US$5.7 million over a two year period. These work commitments are budgeted to be completed during 2008. The company has issued letters of credit in the total amount of US$0.6 million in support of these work commitments.
In Argentina the company has total work commitments of US$54.0 million over the next three years related to the Vaca Mahuida, Puesto Guevara and Gobernador Ayala II blocks.
Additionally, the company has various guarantees and indemnifications in place in the ordinary course of business, none of which are expected to have a significant impact on the company's financial statements or operations.
The company's annual commitments under service contracts for drilling, leases for office premises, various operating costs, software license agreements and other equipment are as follows: Click here for additional information
The company has no off balance sheet financing arrangements.
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures have been designed to ensure that information required to be disclosed by the company is accumulated, recorded, processed and reported to the company's management as appropriate to allow timely decisions regarding disclosure. The company's Executive Chairman and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this MD&A, that the company's disclosure controls and procedures as of the end of such period are effective to provide reasonable assurance that material information related to the company, including its consolidated subsidiaries, is communicated to them as appropriate to allow timely decisions regarding required disclosure.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management of the company is responsible for designing adequate internal controls over the company's financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP. Management assessed the design of the company's internal controls over financial reporting as of December 31, 2007 and based on that assessment, determined that the company's internal controls over financial reporting were adequately designed.
It should be noted that while the company's Executive Chairman and Chief Financial Officer believe that the company's disclosure controls and procedures provide a reasonable level of assurance that they are effective, and that the internal controls over financial reporting are adequately designed, they do not expect that the financial disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. In reaching a reasonable level of assurance, management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
BUSINESS RISKS
Petrolifera is exposed to certain risks and uncertainties inherent in the crude oil and natural gas business. Furthermore, being a smaller independent company, it is exposed to financing and other risks which may impair its ability to realize on its assets or to capitalize on opportunities which might become available to it. Additionally, Petrolifera operates in various foreign jurisdictions and is exposed to other risks including currency fluctuations, political risk, price controls and varying forms of fiscal regimes or changes thereto which may impair Petrolifera's ability to conduct profitable operations.
The risks arising in the crude oil and natural gas industry include price fluctuations for both crude oil and natural gas over which the company has limited control; risks arising from exploration and development activities; production risks associated with the depletion of reservoirs and the ability to market production. Additional risks include environmental and safety concerns.
The success of the company's capital programs as embodied in its productivity and reserve base could also impact its prospective liquidity and pace of future activities. Control of finding, development, operating and overhead costs per boe is an important criterion in determining company growth, success and access to new capital sources.
To date, the company has utilized equity financing and reserve based revolving debt facilities and investment backed lines of credit and has had a bias towards conservatively financing its operations under normal industry conditions to offset the inherent risks of domestic and international oil and gas exploration, development and production activities.
From time to time, the company may have to access capital markets for new equity to supplement internally generated cash flow and bank borrowings to finance its growth plans. Periodically, these markets may not be receptive to offerings of new equity from treasury, whether by way of private placement or public offerings. This may be further complicated by the smaller market capitalization and limited market liquidity for shares of smaller companies, restricting access to some institutional investors.
Periodic fluctuations in energy prices may also affect lending policies of the company's bankers, for new borrowings. This in turn could limit growth prospects over the short run or may even require the company to dedicate cash flow, dispose of properties or raise new equity to reduce bank borrowings under circumstances of declining energy prices or disappointing drilling results.
While hedging activities may have opportunity costs when realized prices exceed hedged pricing, such transactions are not meant to be speculative and are considered within the broader framework of financial stability and flexibility. Management continuously reviews the need to utilize such financing techniques.
The company attempts to mitigate its business and operational risk exposures by maintaining comprehensive insurance coverage on its assets and operations, by employing or contracting competent technicians and professionals, by instituting and maintaining operational health, safety and environmental standards and procedures and by maintaining a prudent approach to exploration and development activities. The company also addresses and regularly reports on the impact of risks to its shareholders, writing down the carrying values of assets that may not be recoverable.
OUTLOOK
Petrolifera plans an active and exciting capital program in 2008. It is anticipated this program will be dominated by our anticipated drilling in Peru on Ucayali Block 107, after we complete our 2D seismic program and interpret the data. Early returns are encouraging although a full interpretation will be required. Timing will depend upon rig availability, government EIA approval, scheduling and normal industry factors which can affect operations in a jungle environment. An active 2D seismic program is also planned over selected portions of Maranon Block 106 with a view to drilling in 2009, again subject to the usual conditions and qualifiers related to regulatory approval and rig availability and the timely completion of the planned seismic program. Our Peru budget for 2008 is estimated at approximately $56 million.
In Argentina, we have allocated $76 million for new drilling and seismic at Puesto Morales, Rinconada, Vaca Mahuida, Puesto Guevara and Gobernador Ayala II. With our Puesto Morales facilities now completed, our focus again turns to exploration with a view to finding new pools for future development.
In Colombia, Petrolifera has already identified three drillable prospects on our Sierra Nevada I license and exploration activity is anticipated for our Sierra Nevada TEA and the Turpial Block. At least one well will be drilled during 2008 to meet contractual obligations on Sierra Nevada I, although programs may be expanded to include the drilling of up to three wells before year end 2008, alone or with partners.
FOURTH QUARTER 2007
Petrolifera's fourth quarter 2007 results were weaker than the third quarter and than the similar period last year. Crude oil sales were 6,565Â bbl/d and natural gas sales were 2.9 mmcf/d, or 7,042 boe/d on an equivalent basis. This is considerably below 2006 levels when flush production was being realized from new prolific wells at Puesto Morales. Also, sales were lower than reported third quarter 2007 results, when equivalent sales were 7,557 boe/d. This trend has now been reversed with the completion of construction of new facilities at Puesto Morales, contributions from new wells and improved stability in field operations.
Revenue in the reporting period was $27 million compared to $31 million in the previous quarter and $45 million in 2006, reflecting lower crude oil prices in Argentina due to the effect of higher export taxes and the strength of the Canadian dollar, which appreciated almost 20 percent against the US dollar during 2007.
The average price received for crude oil sales in the fourth quarter of 2007 was $44.36 per barrel and boe prices were $42.07 per boe, the lowest for the year.
Cash flow was a modest $10.7 million ($0.21 per share) due to higher provisions for cash taxes compared to the prior quarter in 2007 and below 2006 due to lower volumes and higher costs. In 2006, fourth quarter cash flow was a record $18.5 million ($0.42 per share).
Earnings in the fourth quarter 2007 were $4.9 million ($0.10 per share), essentially the same as the third quarter earnings but considerably less than in 2006 when fourth quarter net income was $12.4 million ($0.29 per share).
Capital spending in the fourth quarter 2007 was substantial at $57.6 million as the company operated four rigs in Argentina for much of the period and also completed its field facility construction program. Click here for additional information
SOURCE: Petrolifera Petroleum Limited

Richard A Gusella, Executive Chairman, Petrolifera Petroleum Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, inquiries@petrolifera.ca, www.petrolifera.ca
Copyright (C) 2008 CNW Group. All rights reserved.

Most actively traded companies on Canadian stock markets

Most actively traded companies on Canadian stock markets

TORONTO — Some of the most active companies traded Thursday on the Toronto Stock Exchange and the TSX Venture Exchange:
Toronto Stock Exchange (up 146.15 points to 13,443.50):
Pacific Rubiales Energy Corp. (TSX:PEG). Oil and gas. Ahead 10 cents to $1.60 on 21,847,358 shares. Last week, the company said one of its wells in Columbia contains more oil than originally thought.

Kinross Gold (TSX:K). Precious metals. Up 71 cents, or 2.8 per cent, at $26.08 on 10,463,499 shares. On Thursday gold crossed the US$1,000-an-ounce mark for the first time, pulling the TSX gold sector up with it.

Bombardier (TSX:BBD.B). Transportation. Up 81 cents to $5.56 on 10,042,090 shares after the company said previously announced talks with Iraqi officials led to an order of six CRJ900 regional jets valued at US$239 million.

01 Communique Laboratory Inc. (TSX:ONE). Down 68 cents, or 79.07 per cent, at 18 cents on 8,576,400 shares. Said the judge in its patent infringement case against Citrix issued a stay in the case and a memorandum until the patent in question is reexamined.

BCE Inc. (TSX:BCE). Telecom. Down 42 cents, or 1.1 per cent, at $37.90 on 7,508,788 shares. Earlier this week the Ontario Teachers' Pension Plan, majority partner in the $52-billion BCE takeover, assured the CRTC that the iconic company will remain in Canadian hands after the regulator expressed skepticism.

Yamana Gold (TSX:YRI). Precious metals. Up 50 cents, or 2.76 per cent, at $18.63 on 6,233,044 shares.

TSX Venture Exchange (up 7.45 points to 2,680.67):
Ecometals Ltd. (TSXV:EML). Mineral explorer. Down a penny or 2.78 per cent to 35 cents.
March Resources Corp. (TSXV:MCF). Up 27 cents or 31.4 per cent to $1.13. Provided an update on the upper section of its Pica 1 well in Chile, saying that its going "extremely well" though slower than expected.
Companies reporting major news:
Biovail Corp. (TSX:BVF). Drug developer. Up 17 cents, or 1.3 per cent, at $13.27 on 835,676 shares. Former CEO and minority shareholder Eugene Melnyk plans to propose changes to the board after expressing concern with the direction and financial performance of the company, which posted a $32 million loss in the fourth quarter.
CHC Helicopter Corp. (TSX:FLY.A). Transportation. Down 15 cents, or 0.49 per cent, at $30.45 on 877,244 shares. Company said it has secured the appropriate European investment to help close a $3.7-billion takeover by First Reserve Capital Corp.

PDP- Pescod

Gold shines as it tops $1,000

Gold shines as it tops $1,000

HUMEYRA PAMUK
Thursday, March 13, 2008
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Gold hit a record high above $1,000 (U.S.) an ounce on Thursday and oil reached an all-time peak over $110 a barrel as a historically weak dollar and falling equities triggered a flight to commodity markets.

Soft commodities such as cocoa and coffee also rallied and industrial metals rose but were restrained by fears of a global economic slowdown.

The dollar sank to a 12-year low, and an all-time low versus the euro, while share markets lost ground as the investors fretted over the health of the U.S. economy and global financial sector.
U.S. gold futures rallied to a $1,000 an ounce while spot gold jumped to a fresh peak of $997.50 an ounce and was at 997.10 an ounce just after noon in London, up more than 2 per cent from $981.90/982.70 an ounce in New York on Wednesday.

“The environment of other asset classes has made commodities very attractive,” said Michael Lewis, global head of commodities at Deutsche Bank.

“They look very much like a safe-haven, because if you look at other asset classes there is a lot of risk associated with equities, carry trades and so on.”

Fears of a recession and expectations of aggressive rate cuts from the U.S. Federal Reserve to help shield the U.S. economy is piling pressure on dollar, while also boosting gold and oil as alternative investments.

A falling dollar makes dollar-denominated commodities cheaper for investors in other currencies. It has helped bullion gain 19 per cent and oil over 15 per cent so far this year.
“People have realized that the central banks are going to have to ignore the inflationary risks to rescue the banking system,” said Sean Corrigan, chief investment strategist at Diapason Commodities.

U.S. crude oil futures climbed to a record high of $110.70 a barrel as the weak dollar offset news of an increase in U.S. crude inventories.

“We're looking at the U.S. dollar, we're looking at speculation, we're looking at geopolitical. Those three things tying together are defying fundamentals,” said Peter McGuire, managing director of Commodity Warrants Australia.

The impact of the weakening dollar hit soft commodities too.

London robusta coffee futures rose on speculative buying, with London May arabica futures up $39 or 1.47 per cent to $2,691 a tonne while ICE cocoa futures ICE May up $96 or 3.5 per cent to $2,872 per tonne.

Wheat slid about 1 per cent after jumping on Wednesday amid concerns over tight global supplies.
In the long-run, analysts expect prices to be supported.

“Gold and agricultural commodities are the two we think should be bullet-proof to the problems in the U.S. economy and declining equity markets,” Mr. Lewis at Deutsche Bank said.
Of all commodities, industrial metals looked to be the weakest link. Copper for three-months delivery on the London Metal Exchange was flat at $8,400 per tonne, after falling as low as $8,315 per tonne earlier in the day.

“They're the ones you would be least likely to fancy because their underlying physical demand will possibly be in trouble for a year or so while we work out the western recession and see whether there's any knock-on on developing markets,” Mr. Corrigan said.

Copper has risen 23 per cent since the beginning of the year, driven largely by speculative money, while aluminum jumped by 35 per cent on the back of power shortages in South Africa.
That one though still remains as one of the favourites among base metals.
“We're still putting out bullish ideas on aluminum, we really like that one,” Mr. Lewis said.
© Copyright The Globe and Mail

Solana Resources One To Watch For Sure

The truth about government deficits

The truth about government deficits
NEIL REYNOLDS

Globe and Mail Update

March 12, 2008 at 6:00 AM EDT
In his 2004 book, The Price of Loyalty, former Wall Street Journal writer Ron Suskind described the rise and fall of Treasury Secretary Paul O'Neill in the first two years of President

George W. Bush's turbulent first term. Mr. O'Neill advised tax increases to avert deficits. (He calculated that a 60-per-cent increase in personal income taxes was needed.) His opposition to deficit spending made him a misfit in Mr. Bush's tax-cutting administration.

In one cabinet confrontation in 2002, Vice-President Dick Cheney lectured him bluntly. “Reagan proved,” he said, “that deficits don't matter.” Weeks later, Mr. Cheney fired him.
Set beside President Ronald Reagan's peacetime deficits in the 1980s, Mr. Bush's seven successive wartime deficits (beginning in fiscal 2002) look modest. Mr. Reagan ran deficits almost twice as large – relative to gross domestic product – as Mr. Bush.

The eight Reagan deficits averaged 4 per cent of GDP; the seven Bush deficits (thus far) have averaged 2.4 per cent.

Mr. Bush would need now to run a one-year deficit of $1-trillion (U.S.) to match Mr. Reagan's largest deficit in 1983, which hit 6 per cent of GDP (when GDP stood at $3.4-trillion). The largest of the Bush deficits – $412-billion in 2004 – hit 3.6 per cent of GDP (when GDP stood at $11.5-trillion).

At 6 per cent of GDP, incidentally, the largest of the Reagan deficits exceeded the largest of Franklin Delano Roosevelt's deficits during the Great Depression, which reached pinnacles of 5.9 per cent of GDP in 1934 and 5.8 per cent of GDP in 1936.

How destructive are government deficits? How wicked?
We can compare three recent two-term administrations, two of which (those of Republicans Reagan and Bush) became notorious for budgetary deficits, one of which (Democratic President Bill Clinton) became celebrated for budgetary surpluses. When Mr. Reagan took office in January, 1981, GDP stood at $3-trillion. When he left office in January, 1989, GDP stood at $5-trillion – an increase in these eight years of 65 per cent.

When Mr. Clinton assumed office in January, 1993, GDP stood at $6.5-trillion. When he left office in January, 2001, it stood at $9.7-trillion – an increase in these eight years of 50 per cent. (In his first term, Mr. Clinton ran four deficits, which averaged 2.6 per cent of GDP, slightly higher than Mr. Bush's deficits a decade later. In his second term, Mr. Clinton ran three surpluses, which averaged 1.2 per cent of GDP.)

When Mr. Bush became president in January, 2001, GDP stood at $9.7-trillion. When he leaves office in January, 2009, it will stand (as officially projected) at $15-trillion – an increase in these eight years of 54 per cent.

You can conclude from these numbers, rightly or wrongly, that Mr. Cheney was essentially correct, that deficits don't matter – provided you generate such vigorous economic growth that GDP grows at a faster rate. The deficits of the Reagan years were the largest in these three presidencies; the economic growth was the greatest.

The crucial lesson from the Reagan era, though, arises not so much from the deficits as from the tax cuts. Without lower tax rates, the Reagan deficits would have been merely archaic exercises in Keynesian tax-and-spend. By cutting tax rates the most, Mr. Reagan produced the most economic growth.

The U.S. Tax Foundation, by the way, has calculated that the greatest of the postwar tax-cutters was actually Democratic President John F. Kennedy, whose tax cuts represented 8.8 per cent of the 1962 budget. Mr. Reagan's tax cuts represented 5.5 per cent of the 1983 budget. Mr. Bush's tax cuts represented 3.8 per cent of the 2003 budget. Using a different measure, the Kennedy tax cuts represented 1.9 per cent of national income; the Reagan tax cuts represented 1.4 per cent; the Bush tax cuts represented 1 per cent.

Canadians can look at these deficits from a different perspective. In this space last week, we examined (and admired) the federal government's resolve in paying down the national debt. We noted that Canada now has the lowest debt (relative to GDP) of any of the Group of Seven countries. One reader responded with the observation that Canada also has the lowest per-capita GDP of the G7 countries.

This is not correct, of course. Measured on the basis of purchasing power and expressed in 2007 U.S. dollars, the deficit-spending United States has the highest GDP per capita in the G7: $46,000. But debt-paying Canada has the second highest: $38,200.
The only unequivocal conclusion from all of this is that Mr. Cheney was right to fire Mr. O'Neill. A 60-per-cent increase in personal income taxes would have shut down the U.S. economy – and the Canadian economy along with it.

You can take the high road. You can take the low road. Either way, though, you have to keep the toll as low as you can.

Pump & Dump Scheme vs Short & Distort Scheme

The Roulette Wheel Of The Market-Sectors

Hot Money Moves From Sector To Sector And If You Follow The Money You Will Never Be Left Holding The Dirty Bag. Venture Exchange Stock Maniulation Is A Fact Of Life And Here Is How It Works...

Pump & Dump Scheme vs Short & Distort Scheme

This interesting article uses stages to help explain not only the stages of the highly publicized PUMP & DUMP scheme but also the stages of the lesser known SHORT & DISTORT scheme.

PUMP & DUMP vs SHORT & DISTORT

Most traders have heard and read of the Pump & Dump scheme. But very little has been written about the other side of the trade or its opposite, which is the Short & Distort.

Now lets take the Short & Distort scheme and apply it to the rules of Pump & Dump for stock manipulators.

In order to make these market manipulations work, the professionals assume:

(a) The Public is STUPID and
(b) The Public will mainly buy at the HIGH and
(c) The Public will sell at the LOW.

Therefore, as long as the market manipulator can run crowd control, he can be successful in his agenda of stock manipulation by controlling the market's greed and fear.

The Pump & Dump Scheme

Stage 1: The Acquisition of shares.

Please note: all sharp price movements, whether up or down, are the result of one or more, usually a group, professionals manipulating the share price.

(Loading): In stage I of a Pump & Dump scheme Manipulators after acquiring their shares leak information and pump the stock to get buyers silently. This leads to front loading also.

Stage 2: The Promotional Campaign!

Note: this is designed to spread a rumor/story and to play on the emotional greed of a pie in the sky find. It begins to spread across the financial world. Joe public rushes in not to miss the next gold rush.

(PUMP/Greed) Newsletter writers are hired -- either secretly or not -- to cheerlead a stock. PR firms are hired and let loose upon an unsuspecting public. Contracts to appear on radio talk shows are signed and implemented. An advertising campaign is rolled out (television ads, newspaper ads, card deck mailings, e-mails, etc.).

The company signs up to exhibit at "investment conferences" and "shows" (mainly so they can get a little "podium time" to hype their stock and tell you how "their company is really different" and "not a stock promotion.") Funny little "hype" messages are posted on Internet newsgroups. BTW the more, the merrier. 1000% returns are projected.

Stage 3: The infamous DUMP!

(DUMP) The once low volume that caused a bit of a spike suddenly changes to big volume. The stock manipulators sell out their positions into the new buying brought on by the promotion campaign.

Stage 4: The Silence or News Vacuum!

(Silence) No more news or insider leaks of information to pump the stock to get buyers. The front loading sells out. The silence plays on the emotional fear of being hoodwinked. Negative opinions begin to spread across the financial world. Joe public sells out to cut their losses. The really slick market manipulators would even seed the Internet news groups or other journalists to plant negative stories about that company. Or start a propaganda campaign of negative rumors on all available communication vessels.

Stage 5: The Distortion!

(Gone/Waiting/Shorting):

Stage 6: The Accumulation!

(Gone/Waiting/Buying): If the manipulator sees an opportunity the stock is on the floor and not part of the Short & Distort campaign they will begin buying back and slowly accumulating. As the Shorters were shorting the first manipulator was selling, so now it goes the other way. Buying to put pressure on the shorter to cover. Accumulation by new investors and averaging down of old investors leads to the pressure on the shorts.

The Short & Distort Scheme

Stage I: Monitoring

In stage I of a Short & Distort scheme Short groups Monitor spikes in volumes on stocks with no rumors.

Stage 2: Flagging

Shorts Flag stocks that run up then sits back and wait patiently for their time.

Stage 3: Preparation

The Shorters research the company and develop their Distortion of the rumors to be used later.

Stage 4: Actual Shorting

The shorts step in selling on every possible up tick. This is the Reverse of front loading. Preparations are made to attack the guy who had earlier written positively about the company and take out, discredit, any new long-term champions or messengers.

Stage 5: Distortion Campaign

The shorts step in and increase selling on every possible up tick. Just as with the pump, newsletters, e-mail, PR firms against P & D, etc. are simulated. Expertise in the field is recruited for credibility. Any possible twist using POS (Purposely Omitted Syntax) and PAS (Purposely Added Syntax) is conveniently used on every possible angle. If the POS/PAS is discovered then attack the messenger. Above all control the message boards.

The group clutters the message boards, so no positive information can be readily found. Justification is the Value of the Company in the market. Projections of $0.00 worth and loss projections of 100%

Note: The market manipulator will do everything in his/her power to keep buyers OUT OF THE STOCK. Cut your losses is touted to stimulate fear. You bought higher but now they need you to sell lower.

Stage 6: Pressure

The shorts have taken it too far. The volume is increasing and the price is not effectively dropping. A stalemate occurs. Personal attacks increase. Threats of legal action, SEC involvement, and yes even death threats increase. Increased secret IDs are employed to increase the cluttering, personal attacks and the distortion. So begins a string of lies that run for as long as one's stomach can take it. Desperately playing on the "you have been had" scenario. Any new news will be hit it hard by shorters to kill any interest.

Note: Watch the volume not the share price. A market manipulator will have various brokers buying and selling the stock to give the APPEARANCE of increasing volume but the price goes down. Thus stimulating the story the company is selling or an off shore reg S or other convenient scenario. Watch for large blocks that show up but have a MM special code, cross overs, etc.

Stage 7: The Cover

Without warning the buying pressure is too much and the short begins to cover. Short covering combined with new investors buying into the stock causes the stock to go up. Often the whole thing starts again. Just a vicious cycle sometimes.

Please sir, may I have some more?

Please sir, may I have some more?

Tuesday, March 11, 2008
Between calls to their brokers, investors had little time during Tuesday’s stock market rally to ask themselves one important question: Is the Federal Reserve’s latest attempt to free up credit markets big enough?

David Rosenberg, North American economist, believes the answer is No. The Fed introduced the Term Securities Lending Facility, which will lend up to $200-billion (U.S.) to primary dealers – essentially swapping U.S. Treasury securities for unwanted Federal agency debt and agency residential mortgage-backed securities, for a period of 28 days.

Other central banks, including Canada's, have followed suit with similar liquidity injections, triggering a stock market rally.

But Mr. Rosenberg points out that $200-billion is chicken feed next to the $6-trillion market for total mortgage-backed securities (MBS).

“As with the other liquidity measures introduced, the new facility will not alleviate the current credit crunch or economic recession, in our view,” he said. “The size of the auctions, while sizable in terms of the Fed’s balance sheet, are actually fairly small in light of the overall credit situation and in no way does this solve – or is intended to solve – the massive writedowns and losses in the banking sector that are ongoing in this cycle.”

What’s next? Mr. Rosenberg said that there is speculation the Fed could start buying agency debt itself, which it hasn’t done since 1999, or even buy agency-MBS, though he is not hopeful.

“Also garnering a lot of attention is the possibility that the Fed could decide to lend directly to non-banks via the TAF (Term Auction Facility), something they last did in the 1930s. We cannot rule out that the Fed would be forced to revive this option, but the benefits of such action would need to be weighed against the headline shock of bringing back a Depression-era measure.”


© Copyright The Globe and Mail


Stocks jump on credit bailout

TheStar.com - Investing -

Stocks jump on credit bailout
Days of sharp sell-offs turn to major investor gains after central banks pour billions into loan markets

March 12, 2008 Madhavi Acharya-Tom YewBusiness Reporter
Stock market investors rejoiced yesterday as central bankers around the world, including Canada, announced plans to help ailing financial markets with a huge injection of cash.
But economists say that while the latest intervention may soothe jittery credit markets for the time being, it won't be enough to cure the U.S. economy.

The Bank of Canada said it would enter into 28-day purchase and resale agreements for $2 billion on March 20 and another set for $2 billion on April 3.

The Bank of England, the European central bank, the U.S. Federal Reserve, and the Swiss National Bank also announced similar measures.

Canada's contribution is tiny compared to the U.S. Federal Reserve, which will lend up to $200 billion of Treasury securities for 28 days.

"It's primarily a U.S. move and we're doing a small part. I think that's appropriate," said Don Drummond, chief economist at TD Bank Financial Group. "The financial problems are much more serious in the United States."

Stock markets soared on the news, and the gains strengthened through the day. In Toronto, the S&P/TSX composite index gained 2.61 per cent, or 339.44 points, to finish trading at 13,344.53.
In New York, the blue-chip Dow Jones industrial average gained 416.66 points, or 3.55 per cent, to finish at 12,156.81.

The S&P 500 index closed at 1,320.65, up 47.28 points, or 3.71 per cent.
The gains helped turn around days of sharp market sell-offs, led by financial sector stocks, as another, so-called third wave of credit fears has made lenders very uneasy. There are renewed worries that big Wall Street investment firms are facing liquidity issues as they take massive writedowns for housing and mortgage assets related to subprime borrowing.

Banks tightened their lending after the U.S. market for subprime borrowing collapsed last August, making it difficult for companies to get their hands on short-term financing.
As the signs pile up that the U.S. economy is headed for trouble – slowed consumer spending, record high gasoline prices, and a housing slump – banks are still reluctant to lend.
"This is a tourniquet, it will staunch the bleeding, but it may not turn us around and bring the patient to health," said Susan Wachter, real estate and finance professor at The Wharton School, University of Pennsylvania.

The same central banks also co-ordinated a similar liquidity injection in December to help companies with end-year needs for extra cash.
"Pressures in some of these markets have recently increased again," the Bank of Canada said in a release yesterday.

"We all continue to work together and will take appropriate steps to address those liquidity pressures."

In Canada, banks and financial institutions put up government or provincial bonds, or a few other select securities, and in exchange, they get cash from the Bank of Canada for 28 days.
The Fed said also it would make U.S. treasury securities available to cash-strapped banks through weekly auctions for 28 days, rather than the traditional overnight period.
"The fact that it's 28-day loans instead of overnight should help it have some impact but let's face it, this is not the be-all and end-all of curing U.S. woes," Drummond said.
"That's going to be a long time in the making and will take more than something like this."
With files from the Star's wire services

Eric Sprotts View Of Markets

Sprott sees financial turmoil pushing gold to $2,000

By Stewart Bailey Bloomberg News Service Monday, March 10, 2008

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVMsmS.ikYd4

Turmoil in global credit markets may lead to the collapse of a North American bank, pushing bullion prices up to $2,000 an ounce as investors seek a haven in gold, Eric Sprott said.

This year's decline in banking and brokerage stocks will worsen, said Sprott, 63, founder and chairman of Sprott Asset Management, which manages about $7 billion.

In response, the company is short-selling financial stocks and increasing holdings in bullion and mining companies, Sprott said.

He declined to name which bank he thought may collapse. "We're in a systemic financial meltdown," Sprott said in a March 6 interview at the company's Toronto headquarters.

"There are probably 10 companies that are broke that are still trading -- banks and financial institutions." Sprott, who in 2004 foresaw uranium and crude-oil prices rising, expects that the global financial system will come under increased stress as banks, faced with slipping stock prices and capital erosion tied to subprime-mortgage loans, battle to raise money to offset losses caused by asset writedowns.

Bear Stearns Cos. dropped as much as 14 percent today on speculation the company lacks sufficient access to capital. The company, the second-biggest underwriter of mortgage-backed bonds, led Wall Street shares lower in the past six months as the world's largest banks and securities firms wrote down $188 billion of assets linked to devalued loans.

The "concentration" of Sprott's short selling is in financial stocks, housing, and consumer products, he said. Short selling involves selling borrowed stock on the expectation share prices will fall, allowing the short seller to buy the equities in the market at a lower price to repay the debt. ...

'Easiest to Short' "The brokerage companies, the investment banks are the easiest to short,"

Sprott said. "Do I understand what's happening in the business? Yes, there is no business." Sprott said his company's offshore hedge funds have increased the proportion of gold in their portfolios to about 30 percent.

The company is also buying small mining stocks that have yet to "blossom," including Dynasty Metals and Mining Inc., Golden Star Resources Ltd., and MAG Silver Corp., he said. Gold has gained for seven straight years and reached a record $995.20 an ounce in New York on March 5.

The precious metal rose 16 percent this year before today, compared with a 12 percent drop in the Standard & Poor's 500 Index and a 24 percent slump in the seven-member S&P 500 Investment Banking & Brokerage Index. ... Funds double The Sprott Gold & Precious Minerals Fund and the Sprott Canadian Equity Fund have both more than doubled in the past five years.

The S&P 500 Index gained 58 percent in the same period. Sprott says the collapse of U.K. mortgage lender Northern Rock in September precipitated some bullion purchases by skittish depositors seeking a safe investment for the money they had withdrawn from the bank.

That presages the larger effect that a banking failure in North America would have on gold demand, he said, since investors will have few good alternatives. "Government bonds are a joke at the interest they're paying,"

Sprott said. "You can buy gold or other real things -- gold, silver, platinum, palladium -- things that hold value."

CRO - Stox Review + More

#1 This is the biggest reason I think you want to be in CRO is the fact that we are valued at about 2% of inground value. Marketcap 25 MILLION, inground value over 1.2 BILLION

#2 The metal market looks to continue to rise. Supply of most metals continues to lag far behind demand. Nickle could easily be over $20 again.

#3 The potential to find more copper and nickle below the open pit. 2.95% Ni, 0.82% Cu, 0.07% Co over 21.5 m including 7.2% Ni, 0.67% Cu, over 5.5 m is very encouraging. More results like this and we'll be seeing a new resource estimate and great potential to underground mine.

#4 The fact that mining equiptment is already purchased and potential for mining in less than three years.

#5 Potential for Nickle, Gold, and Copper from the property adjacent to Opawica Resources new discovery. 0.87% Cu and 4.08 g/t Au over a core length of 46 metres is very encouraging. CRO has started initial exploration programs in the area.

Source

Octagon Report +PDP Is Ready To Run Up On Pending News

Oil touches $109 a barrel

Oil touches $109 a barrel

Tuesday, March 11, 2008

VIENNA, Austria —

Oil prices briefly are surging above $109 (U.S.) a barrel for the first time.
The rise comes as International Energy Agency is warning that there is unlikely to be much relief from current high oil prices because of brisk demand in China and other emerging markets.

Light, sweet crude for April delivery briefly climbed to $109.20 a barrel in electronic trading on the New York Mercantile Exchange by midday Tuesday in Europe.

The contract later fell back to $108.75 but that is still 54 cents above the previous high set on Monday.

Fed to Lend $200 Billion, Take on Mortgage Securities (Update2) By Scott Lanman

March 11 (Bloomberg) -- The Federal Reserve plans to lend up to $200 billion of Treasury securities in exchange for debt including private mortgage-backed securities that have slumped in value as homeowners defaulted on their payments.

The Fed set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28-day periods, through weekly auctions. The Fed also said in a statement in Washington that it's increasing the amount of dollars available to European central banks through swap lines.

Today's steps are the latest in Chairman Ben S. Bernanke's effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points. The Fed last week said it will make up to $200 billion available to banks through other tools to help boost liquidity.

The announcement ``is focused on getting the markets going,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. `` There is a lack of willingness to trade. They are continuing to focus on adding liquidity.''

The measures announced by the Fed are part of a coordinated effort with other central banks, including the Bank of England, Bank of Canada, European Central Bank and Swiss National Bank.
International Effort

The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.

The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold a further auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.

Treasuries slid after the announcement, with yields on 10- year notes rising to 3.56 percent at 9:11 a.m. in New York, from 3.46 percent late yesterday.
Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 60 percent chance of a 0.75 percentage-point reduction.

The Fed's auctions of Treasuries, which will begin March 27, may be secured by collateral including agency and private residential mortgage-backed securities, the Fed said. The central bank ``will consult with primary dealers on technical design features'' of the new tool.
Primary dealers are a group of 20 banks and securities firms that trade Treasuries directly with the Federal Reserve Bank of New York.

Last Updated: March 11, 2008 09:23 EDT

Octagon PDP Target $25.00

The Close Was Ugly

Market News: After the BellThe close: Ugly, even without SpitzerRTGAMNorth American stocks were not doing well before Eliot Spitzer fell from grace, but the news that the Governor of New York was involved in a prostitution ring - disclosed by the New York Times in the afternoon - certainly did not give the market a much-needed shot of confidence.

The Dow Jones industrial average closed at 11,740.15, down 153.54 points or 1.3 per cent. The broader S&P 500 closed at 1273.37, down 20 points or 1.6 per cent - and now just 3 points above its intraday low point in January. The selloff was widespread, with all 10 sub-indexes down for the day, led by materials and financials. In particular, Bank of America Corp., Citigroup Inc., General Electric Co. and Google Inc. were the biggest drags on the benchmark index.In Canada, the S&P/TSX composite index closed at 13,005, down 276.63 points or 2.1 per cent - its worst one-day performance since the last day of February.

Its greatest stars in recent months went noticeably dim: Potash Corp. of Saskatchewan Inc. fell 7.1 per cent, Research In Motion Ltd. fell 3.9 per cent and Goldcorp Inc. fell 4.2 per cent.Overall, the materials sub-index suffered a 4.2 per cent drop, its worst performance since the steep Jan. 21 plunge. If you are looking for things to worry about, this could be it:

Materials stocks have kept the overall index far above its global peers in recent weeks and well out of recession territory; if materials change direction now, the index could shift to catch-up mode.Then again, you cannot blame tumbling commodity prices on the stock market's retreat: Oil rose to a new record of $107.94 (U.S.) a barrel, up $2.79.

And while gold fell, its dip was very slight - to $971.90 an ounce, down $1.30.More likely, the overall softness is due to yet more concerns about the U.S. economy. UBS said in a note to clients on Monday that it now expects the U.S. Federal Reserve to hack interest rates by three-quarters of a percentage point on Mar. 18 - a massive cut by historical standards - instead of an earlier expectation for a half-point cut (which is still pretty hefty).

Economists there now believe the Fed's key rate will eventually fall to just 1.5 per cent by August."We are not forecasting a deep recession, due in large part to only a small drag from inventories this time," said Maury Harris, an economist at UBS. "

Still, even if the recession is ultimately 'milder than average,' as we project, data in coming months are likely to show additional weakening. Meanwhile, ongoing financial markets problems raise the risk of greater-than-expected weakness."

Copyright 2001 The Globe and Mail

CRO - Stox Review + More

#1 This is the biggest reason I think you want to be in CRO is the fact that we are valued at about 2% of inground value. Marketcap 25 MILLION, inground value over 1.2 BILLION

#2 The metal market looks to continue to rise. Supply of most metals continues to lag far behind demand. Nickle could easily be over $20 again.

#3 The potential to find more copper and nickle below the open pit. 2.95% Ni, 0.82% Cu, 0.07% Co over 21.5 m including 7.2% Ni, 0.67% Cu, over 5.5 m is very encouraging. More results like this and we'll be seeing a new resource estimate and great potential to underground mine.

#4 The fact that mining equiptment is already purchased and potential for mining in less than three years.

#5 Potential for Nickle, Gold, and Copper from the property adjacent to Opawica Resources new discovery. 0.87% Cu and 4.08 g/t Au over a core length of 46 metres is very encouraging. CRO has started initial exploration programs in the area.

Source

PDP Is Ready To Run Up On Pending News

Canadian Arrow Mines Intersects More Nickel

Kenbridge returns 6.23% Ni over 5.8 metres - continues to yield high grade zones in deep drilling
04:00 EDT Monday, March 10, 2008

SUDBURY, ON, March 10 /CNW/ - Canadian Arrow Mines, Ltd. (CRO: TSX-V) (the "Company") reports additional high grade nickel copper mineralization from drilling at the Kenbridge Nickel Project in Northwestern Ontario. Diamond drill hole KB-07-149 assayed 1.14% Ni, 0.30% Cu, 0.04% Co over a core length of 49 metres, including a high grade section of 6.23% Ni, 0.72% Cu, 0.18% Co over 5.8 metres. This intersection is located below the proposed open pit at approximately 250 metres elevation below surface.
<<
Assay highlights for 14 drill holes include:
- KB-07-149 - 1.14% Ni, 0.30% Cu over 49 m
- including 2.22% Ni, 0.47% Cu over 20.5 m
- including 6.23% Ni, 0.72% Cu over 5.8 m
- KB-07-183 - 1.08% Ni, 0.46% Cu over 46.2 m
- including 2.54% Ni, 0.75% Cu over 15.5 m
- including 5.96% Ni, 0.60% Cu over 1.7 m
- KB-07-161 - 0.83% Ni, 0.41% Cu over 23.3 m
- Including 1.53% Ni, 0.89% Cu over 8.3 m
- KB-07-181 - 0.77% Ni, 0.29% Cu over 17.8 m
- Including 1.0% Ni, 0.32% Cu over 12.3 m
>>
Hole KB-07-149 and recently reported hole KB-07-180 (2.95% Ni, 0.82% Cu, 0.07% Co over 21.5 metres, including a high grade section of 7.21% Ni, 0.67% Cu, 0.19% Co over 5.5 metres) are both located on section 12504.5m N with KB-07-149 intersecting the deposit approximately 60 metres up dip of KB-07-180.

Hole KB-07-183 intersected the deposit at approximately the same elevation below surface as hole KB-07-180 (approximately 300 metres vertical) and was collared on Section 12415m N, which is 90 metres south along strike of KB-07-180.

Commenting on the results Kim Tyler, President of the Company, stated, "We continue to find excellent widths and grades to the mineralization below the proposed open pit portion of the deposit. Every hole we've drilled into the underground portion of the deposit is giving us a better understanding of the controls to the mineralization, particularly the higher grade zones. We will be using the results from these holes to upgrade the inferred resource in the underground portion of the deposit in our planned feasibility study.

Some of the recent work completed on modeling the deposit has led to the interpretation that some of the higher grade zones may in fact have shallow plunges and appear more continuous than previously interpreted. Testing the new plunge interpretation will require additional follow up exploration drilling including the possibility of plunge extensions beyond the known mineralized envelope both to the north and south of the deposit.

Over the last few weeks we have been able to get through a significant amount of the assay backlog. We still have approximately 15 drill holes of assay results for the Kenbridge Nickel Deposit and will await those final results before prioritizing the next phase of drilling in the immediate vicinity of the deposit.

As mentioned in a previous press release (February 28, 2008) we have recently commenced drilling on other prospective targets near the Kenbridge property and will be systematically testing several nickel-copper showings over the next couple of months. Currently we are drill testing targets south of Kenbridge in the Denmark Lake claim group and will be reporting assay results as they become available. Additional, high priority regional targets include the Apex, Glatz and Emmons-Prigg nickel-copper-platinum-palladium occurrences."
<<
Assay Results:
Hole From To Length Ni% Cu% Co%
KB-07-149 319 368 49 1.14 0.30 0.04
347.5 368 20.5 2.22 0.47 0.07
356.2 362 5.8 6.32 0.72 0.18
KB-07-157 175.5 183 7.5 0.35 0.23 0.02
231.4 241 9.6 0.31 0.24 0.01
KB-07-158 196.8 209 12.2 0.31 0.27 0.01
201.5 203.8 2.3 0.52 0.40 0.02
KB-07-159 207 220.6 13.6 0.24 0.23 0.01
KB-07-160 8 12.5 4.5 0.45 0.17 0.02
KB-07-161 117.5 140.8 23.3 0.83 0.41 0.03
Including 132.5 140.8 8.3 1.53 0.89 0.05
Including 137.5 140.8 3.3 1.97 1.39 0.07
KB-07-163 9 21.5 12.5 0.35 0.31 0.01
Including 9 12.3 3.3 0.87 0.75 0.03
KB-07-164 49.4 52 2.6 0.50 0.15 0.02
KB-07-169 200.5 206.5 6 0.41 0.27 0.01
KB-07-181 284.2 302 17.8 0.77 0.29 0.02
Including 284.2 296.5 12.3 1.00 0.32 0.03
Including 292 293.8 1.8 1.71 0.23 0.04
KB-07-182 320.5 349.85 29.35 0.37 0.22 0.01
Including 320.5 323.9 3.4 1.45 0.55 0.05
Including 321.7 323.9 2.2 2.01 0.79 0.07
And 344.9 349.85 4.95 0.53 0.49 0.02
KB-07-183 337.8 384.1 46.2 1.08 0.46 0.04
Including 356 371.5 15.5 2.54 0.75 0.08
Including 364 371.5 7.5 3.36 1.22 0.10
Including 369.8 371.5 1.7 5.96 0.60 0.14
KB-07-190 239.2 267 27.8 0.43 0.19 0.01
Including 261.7 267 5.3 0.60 0.31 0.02
KB-07-192 327.1 339 11.9 0.31 0.31 0.01
>>
Analytical Method
-----------------
Mineralized diamond drill hole intervals reported are down hole core lengths only. NQ diameter drill core samples are split in half; one half being retained in its original core box and the second half sent to an independent commercial laboratory for analysis. Samples are analyzed by ISO 17025 accredited Accurassay Laboratories in Thunder Bay, Ontario. Samples analyzed for base metals (nickel, copper, and cobalt) are digested using aqua regia with an atomic absorption finish.
The exploration program is being carried out under the direction of the Company's Vice President of Exploration, Todd Keast P. Geo., a qualified person as defined by National Instrument 43-101. The information in this release was prepared under the direction of Kim Tyler, P. Geo., President of the Company, a qualified person as defined by National Instrument 43-101.
About Canadian Arrow Mines, Ltd.
Canadian Arrow Mines, Ltd. is an established Canadian exploration and development Company committed to developing and advancing base metal deposits close to existing infrastructure through exploration, development and acquisition. Shares of Canadian Arrow Mines trade on the TSX Venture Exchange under the symbol "CRO".
If you would like to receive press releases via email please contact: sarah@chfir.com.
THIS PRESS RELEASE WAS PREPARED BY MANAGEMENT WHO TAKES FULL
RESPONSIBILITY FOR ITS CONTENTS.
THE TSX VENTURE EXCHANGE NEITHER APPROVES NOR DISAPPROVES OF THIS PRESS

Buffet: Riches Man On The Planet

End of the bull? What bull?

Market Looks Like This Pig At The Moment

End of the bull? What bull?

Friday, March 07, 2008


You may have noticed that Market Blog is a big fan of Bespoke Investment Group. It seems that

just about every day, the Bespoke blog can churn out interesting tidbits on the market that can make just about anyone put down his or her cup of coffee and say “Hmm.”


The latest coffee-pausing hit: Unless you managed to invest in the S&P 500 at its lowest point this decade, in 2003, and instead invested at the start of each year, you would be sitting on cumulative gains of less than 20 per cent in all cases – not much given that we were supposed to be in a rip-roaring bull market until recently.


For example, your total gains since 2004 would be an okay-but-hardly-stellar 17 per cent. It gets worse: Total gains since 2005 would be just 8 per cent. Since 2006: a measly 4 per cent.


“Now, we’re all familiar with the long-term historical performance of 6 per cent to 8 per cent annually for equities, but even during the most recent bull market of this decade, that hasn’t happened unless you’re timing was spot on,” Bespoke said on its blog. “Any new market participants over the past few years have really just seen a lot of back and forth action.”

© Copyright The Globe and Mail

Stock Market Today + Top Ten Picks From Trapeze

The Floor Caves In

The close: The floor gave in

RTGAM

Remember that low point in January, the dip that many observers had hoped would mark the bottom of the S&P 500 during the current stock market turbulence?

Well, it's under threat - again.

The index's lowest close of 1310.5 gave way on Thursday, when it closed at 1304.34, down 29.26 points or 2.2 per cent. The declines were widespread, with 97 per cent of the shares ending the day in negative territory, led by Exxon Mobil Corp., General Electric Co., Citigroup Inc. and Microsoft Corp.This does not bode well for stocks if you put a lot of importance in low closes or you're getting nervous about the downward trend.

After all, what had looked like a solid foundation for a rally just six weeks ago now looks like mushy floor at best, instilling fears of further declines.Some analysts pointed out that it is the intraday low that is more important as a technical benchmark. Looked at that way, the low point for the S&P 500 is 1270. Either way, though, the world's most important stock market index is clearly under siege, at least from a psychological point of view, and that can't feel good.Meanwhile, the Dow Jones industrial average closed at 12,040.39, down 214.60 points or 1.8 per cent - which is just shy of its lowest close in January.In Canada, the S&P/TSX composite index closed at 13,360.44, down 242.88 points or 1.8 per cent.

The Big Banks were the biggest drags on the index, thanks to growing fears about additional writedowns and, in at least one case, concerns about the health of dividends.Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce fell between 3.4 per cent and 4.3 per cent. Bank of Montreal (that would be the one with the troubled-looking dividend) tumbled 6.8 per cent.Copyright 2001 The Globe and Mail

Reasons To Buy CRO-X

#1 This is the biggest reason I think you want to be in CRO is the fact that we are valued at about 2% of inground value. Marketcap 25 MILLION, inground value over 1.2 BILLION

#2 The metal market looks to continue to rise. Supply of most metals continues to lag far behind demand. Nickle could easily be over $20 again.

#3 The potential to find more copper and nickle below the open pit. 2.95% Ni, 0.82% Cu, 0.07% Co over 21.5 m including 7.2% Ni, 0.67% Cu, over 5.5 m is very encouraging. More results like this and we'll be seeing a new resource estimate and great potential to underground mine.

#4 The fact that mining equiptment is already purchased and potential for mining in less than three years.

#5 Potential for Nickle, Gold, and Copper from the property adjacent to Opawica Resources new discovery. 0.87% Cu and 4.08 g/t Au over a core length of 46 metres is very encouraging. CRO has started initial exploration programs in the area.

Source

World - Gates no longer world's richest man: Buffet Is

Gates no longer world's richest man: Forbes TheStar.com -

Top spot taken over by financier and philanthropist Warren Buffett

March 05, 2008 THE CANADIAN PRESS

Bill Gates has been dethroned after 13 years at the top of the Forbes list of the world's richest people.

Forbes.com says Gates, the co-founder of Microsoft, has fallen to number three, even though his net worth increased by $2 billion US over the past year, putting his net worth at $58 billion US.

Forbes says the top spot has been taken over by financier and philanthropist Warren Buffett.
Forbes says Buffett's net worth stands at $68 billion – up 10 billion from a year ago.

Ranked number two is Carlos Slim Helu, a Mexican telecom tycoon whose net worth has doubled in just two years to $60 billion.

Forbes says Gates would likely still be at the top if Microsoft had not make an unsolicited bid for
Yahoo! at the start of last month.

Following the bid for the search engine giant, shares of Microsoft plunged 15 per cent.

Pescod Picks and TSX Leaders Today

Insiders Buying :FNI A Stock To Buy Before It Runs Up

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.

"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.
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CRO - Stox Review

Click Here For The Full .pdf Report

Pescod Talks BWR This Evening

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PDP Chart + Depth Today Ready To Explode On Drilling News

Desperately seeking havens

Tuesday, March 04, 2008

The Abnormal Returns blog does a nice job summarizing the gyrations in the fixed income markets, demonstrating just how desperate investors are to hide from the ravaging effects of rising inflation and slow economic growth.

For starters, investors have grabbed at five-year TIPS (or Treasury Inflation-Protected Securities) with such enthusiasm that the yields have dipped below zero, a level not seen before.

Then there is the yield curve: Sure, it is steepening – but how it is steepening is particularly interesting. Long-term bond yields are falling, but short-term bond yields are in freefall.

And third, fears of an economic slowdown are having a big impact on high-yield debt. According to one measure, high yield bond spreads are wider than they have been since early 2003.

“Safe havens against the perils of stagflation are few and far between,” Abnormal Returns said. “The obvious ones, like TIPS, have already been bid up to seemingly unsustainable levels. No one said this investing business was going to be easy.”

Click To Make Charts Larger

CRO=$$$$ Small Float , Mine in 2009,Millions lbs Copper +

From The Bullboards:

SUBJECT: YES! i recieved the Northern Miner!			Posted By: laroplex
			Post Time: 3/4/2008 14:57

Ive been in this play now for about 1 year......Always believed in CRO.......As i posted in one of my earlier post when there was absolutely no activity on this board, that how unbelievably undervalued the s/p was(at the time around the .27s/p)i was even started having some doubts about the inner management team.......Boy was i wrong!......We got the Northern Miner in our local paper here in Timmins where Mr.Larche(B.O.D)resides........Great write up on CRO........I even caught up with one of my diamond driller friend about 2 weeks ago, ironically he was going to Kenora to do some work for CRO.......After analyzing the latest finding i am even more confident then the 1st day i bought some of these shares......Everybody in town that knows CRO, started reloading again even at these s/p, including me that have picked it up some s/p at even less than half these levels.......This play is not for the day-traders, they will weed out soon, then my friends in the intermediate term(say 4-6 months)the rewards will be much much greater.

http://www.northernminer.com/issues/search.asp?nbs=t

Bank of Canada cuts rates, cites U.S. economy

Bank of Canada cuts rates, cites U.S. economy

Tuesday, March 04, 2008

The Bank of Canada lowered its key interest rate by half of a percentage point (or 50 basis points) on Tuesday morning, bringing the rate to 3.5 per cent and in line with expectations. It also means that the central bank is using the same game plan as its counterpart in the United States – putting concerns about economic growth ahead of concerns about rising inflation.
The U.S. Federal Reserve has slashed its key interest rate aggressively this year, cutting it by 50 basis points at the end of January, which followed an emergency 75 basis-point cut on January 22. The rate now stands at just 3 per cent, and many observers believe there is more cutting to do.

In its statement on Tuesday, the Bank of Canada said that economic growth in 2007 was broadly in line with expectations, with “buoyant” domestic demand and high employment. However, they did note that Canada’s net exports weakened in the fourth quarter, thanks to the slowing U.S. economy and the strong Canadian dollar.

“At the same time, there are clear signs that the U.S. economy is likely to experience a deeper and more prolonged slowdown than had been projected in January,” the Bank said in its statement. “The deterioration in economic and financial conditions in the United States can be expected to have significant spillover effects on the global economy. These developments suggest that important downside risks to Canada’s economic outlook that were identified in the MPRU [Monetary Policy Report Update] are materializing and, in some respects, intensifying.”

“The Bank now judges that the balance of risks around its January projection for inflation has clearly shifted to the downside, and, as a result, the Bank is lowering the target for the overnight rate. Further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance and to achieve the 2 per cent inflation target over the medium term.”

© Copyright The Globe and Mail


And This:

Get bearish. Please

Tuesday, March 04, 2008

If capitulation on the part of stock market strategists is the ultimate “buy” signal, investors who are sitting on the sidelines are going to have to stay patient. Even as major stock market indexes move toward their January lows and economists turn up the volume on recession warnings, strategists remain upbeat about the market’s prospects, partly out of faith that substantially lower interest rates will light a fire under the U.S. economy in the second half of the year.

According to Bespoke Investment Group, the consensus among Wall Street strategists calls for the S&P 500 to hit 1591 by the end of the year, implying a rise of about 20 per cent from current levels. The index traded at 1325 on Tuesday morning.

The consensus was even more bullish at the start of January, before strategists began to trim some of their more enthusiastic estimates. Bear Stearns, for example, slashed its forecast for the S&P 500’s year-end level to 1550, from 1700.

Bespoke noted on its blog that Merrill Lynch was the least bullish among the Wall Street shops, but even it is forecasting an 11 per cent gain for the S&P 500, with a year-end level of 1475. Goldman Sachs is at the other end of the bullish spectrum, forecasting a rise of about 26 per cent, with a year-end level of 1675.

“If investors are looking for excessive bearishness from analysts as a contrarian buy signal, they’re nowhere close to it right now,” Bespoke said.



© Copyright The Globe and Mail

Petrolifera Petroleum to restate financials +BWR

WebBroker Select Company News Alert

========================


WebBroker Select Company News Alert

========================


Petrolifera Petroleum to restate financials

CP



Petrolifera Petroleum Ltd. is restating its 2006 results, reducing its full-year profit to $37.3-million from a previously reported $39.9-million. The oil and gas company said the restatement corrects reporting of its current income tax expense and tax payable for the year. The restatements are expected to decrease profit by 7 cents a share to 95 cents as income taxes payable increased $2.6-million. Restated audited statements are expected to be filed with regulators on or about March 14. PDP (TSX) fell 35 cents to $12.15.





© 2008 The Globe and Mail
CP



Petrolifera Petroleum Ltd. is restating its 2006 results, reducing its full-year profit to $37.3-million from a previously reported $39.9-million. The oil and gas company said the restatement corrects reporting of its current income tax expense and tax payable for the year. The restatements are expected to decrease profit by 7 cents a share to 95 cents as income taxes payable increased $2.6-million. Restated audited statements are expected to be filed with regulators on or about March 14. PDP (TSX) fell 35 cents to $12.15.


AND

BWR-T fails to meet analyst expectations.

03-Mar-2008 09:01 PM
Some data delayed up to 20 minutes

BWR-T
Surprise %: -50.0%
Reported EPS: 0.03
Last Consensus EPS: 0.06
Period end: 12/2007
Reporting period: quarter
Currency: C$


© 2008 The Globe and Mail

AN INTERVIEW WITH LARRY CICCARELLI,

AN INTERVIEW WITH LARRY CICCARELLI,
CHAIRMAN OF GLOBESTAR MINING

(As of February 26, 2008)

We are here with Larry Ciccarelli, who has played a
prominent role in both the founding of and the development
of Globestar Mining Corp.

David Pescod: Larry, can you give us some of the background
to your affiliation with this company?

Larry Ciccarelli: As founders, we began investing in the

Dominican Republic in 1997 through a company that I am
partnered in called Karr Securities Inc. We began in 1997
and through a series of transactions, we took control of
the wholly-owned subsidiary of Globestar today – CMD in
2000.

It was an easy transaction for us to do at that time
because when we purchased the CMD subsidiary from
Falconbridge, not only did we receive all those Falconbridge’s
non nickel exploration assets, we also purchased
the data, the team, the offices, and what not.

Thereby in purchasing CMD, along with it came the Falconbridge
trained team that was headed by Julio Espaillat,
who is still with us today and is our country manager.

Subsequent to that, I believe it was in 2002, we acquired
the Cerro de Maimon deposit after we had received approval
for an RTO with a company called Boreale Exploration
Inc. out of Quebec. Through the years after this
acquisition of Cerro de Maimon, we did two feasibility
studies one with Pincock Allen and Holt updated with
Behre Dolbear and then we brought JP Chauvin in 2006
and updated those feasibility studies.

D.P: There had been a few personnel changes, Mr.
Fisher making a recent exit and you resuming the Chairmanship…
is there something there one should know?

L.C: Going back to 1997, when Karr Securities was making
an investment into the Dominican Republic, we were
also making an investment at that time between 1997 and
2000 with a company called Ambrex, which is Karmin
Exploration today.

Karmin is a large zinc resource in Brazil and Bill Fisher
was the founding President of that company and that’s
how we got to know Bill and he is the still the CEO of Karmin
today. Karr Securities is the controlling shareholder
of Karmin. Bill resigned to pursue other opportunities and
Karmin is one of those other opportunities.

D.P: All of this is a preamble to what is really becoming
an exciting story. A mine is actually getting built. We
have so many projects around the world that are stalled
because of environmental concerns, permitting, nationalistic
concerns, etc. That’s a nice little mine shaping up in
the Dominican and it looks like you could be on production
in July?

L.C: That is correct. With that being said, keep in mind
this was a long haul for us. Again, we began working on
this deposit in 2003 through two feasibility studies mentioned
so it has been a long time coming, but we maintained
our focus and kept moving the project forward.

D.P: There are a lot of people with a lot of respect for the
technical team out of the Dominican that is building this.
Any comments on that?

L.C: Getting back to our country manager, a gentleman by
the name of Julio Espaillat who is a former Falconbridge
employee for 13 years, as well as our mine manager, a
gentleman by the name of Jose Antonio Ruiz. Jose Antonio
was the mine manager at Pueblo Viejo, one of the largest
gold mines in the Americas. In the area, surrounding
the Cerro de Maimon mine, we have the Falcondo nickel
operation as well.

Thus, between Pueblo Viejo and Falcondo,
we are in a mining district, so there is a skilled labor
pool in the area. I think we were fortunate enough to
get our project built before the Barrick operation, but with
those two gentlemen and obviously adding a couple of
expatriates operationally everything seems to be running
quite smoothly down in the Dominican. In addition, with
Eric Olson, GlobeStar VP of Projects, he is supervising
and responsible for the construction and commencing of
production for GlobeStar.

Eric is the engine behind GlobeStar. We have a good team and all should be mentioned,
as well as a good contractor RSW, an engineering
firm Met Chem and mining contractor Sococo.

D.P: When you reach production, the suggestion is that
you could have nice cash flow, approaching $100 million a
year. Is that true?

L.C: That is correct. It’s great to have current commodity
prices. When we first started investing in the Dominican
Republic, we were looking at $0.50 copper. So yes, if the
current commodity prices stay the same, those are the
types of economics that we will see out of this mine.



D.P: You also have the nickel asset right beside the play. What kind of size do you think those assets are today?

L.C: We issued a press release last Monday using a 1% cut off. Our resources are at 6.2 million tonnes at 1 ½% nickel and using a .9% cut off, we are over 7 million tonnes at 1.4%. The drill has not stopped. What type of resources are potentially out there? I think we set a goal for ourselves to get to the 10 million tonnes. Given the press release from Monday, I think that goal is pretty reachable. We are drilling one hole approximately every three days.

D.P: Wow! We notice several analysts are following the stock these days as we get closer to production startup. By the way, what is the exact date expected for start up?

L.C: We think summer of 2008. Realistically, July or August is a realistic time frame in terms of start up.

D.P: Now there are several analysts following this stock at this time and they seem to have expectations from anywhere
between $2.50 and $3.00 a share based on the copper and of course no one knows what to think about the
nickel at this point. Any thoughts on these expectations?

L.C: I think based on current commodity prices; those types of targets are pretty achievable given the financial matrix of the mine. However, I believe the ratings are conservative based on the commodity prices they are using for valuation.

We continue to drill for nickel and we continue to look at exploration on the base metal side on the Maimon belt that we call it – the massive sulphide belt surrounding Cerro de Maimon. It’s two-fold. We are going to look at mine life extension and also production expansion as we continue to explore for additional resources on the mine side. On the nickel side, we will see what happens here. We need to do develop alternatives to the Falcondo smelter. Now
that’s not to say that Falcondo may or may not take our feed and that’s just one possibility, but Falcondo cannot be our only alternative. So we want to look at developing some alternative to processing our ore, or shipping our ore, or whatever the other alternative can be. We are just on the beginning stages on our nickel exploration and now that we have the 10 million tonnes in sight, we know what type of resources that we potentially can have and based on that,
we need to develop alternatives.

D.P: I guess we have to end this with something like a question like, okay, if you could only buy one stock today other than your own (and it has to be a double) what would it be?

L.C: I really like all these single-mine producers (the Sherwood’s, the Capstone’s, the Roca’s) or ot hers who are financed and about to achieve that status although they have all moved up over the last 30 or 60 days. Given this environment, these one-mine producers, I think you’ll see a consolidation in the industry at some point. It doesn’t make sense in the long term for any of these companies (including ourselves) to be a one-mine company. I like to continue to focus on these one-mine (whether it’s base metals or precious metal companies) I think there is some upside. I do not know if there is a double but in consolidation there is always upside.

D.P: Thank you for your time, Mr. Ciccarelli.
Disclosure: Globestar Mining: Canaccord Capital covers this stock and has a Speculative Buy rating on it. (Speculative buy: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the stock may result in material loss.)

David Pescod 780-408-1750 Debbie Lewis 780-408-1748 Fax: 780-408-1501

Gold, oil rocket to record highs

Gold, oil rocket to record highs

ROMA LUCIW

Monday, March 03, 2008

Gold prices scaled unprecedented heights Monday, hitting record territory alongside crude oil as investors looked for a safe place to park their money while the U.S. economy and greenback struggle.

Gold futures jumped to $992 (U.S.) an ounce on the Comex division of the New York Mercantile Exchange, pushing to within a whisper of the milestone $1,000 level as the U.S. dollar fell to its lowest ever against the euro. Bullion eventually closed Monday's session at $984.20, up $9.20. Gold prices rallied nearly 32 per cent in 2007 and have shot up more than 15 per cent this year.

Not to be outdone, crude oil futures surged to an unprecedented $103.95 a barrel in New York on Monday. The gains sent the benchmark price of oil above an inflation-adjusted historical record reached 28 years ago. Oil peaked at $39.50 a barrel in April, 1980, which translates into $103.76 a barrel in today's money.

Matthew Turner, a precious metals analyst at Virtual Metals Consulting Ltd. in London, said a struggling greenback and the raft of weak U.S. economic data are supporting gold's gains.

“As long as the U.S. dollar is falling and the economic news from the U.S. stays this bad, gold could go much higher,” he said in an interview.

Bullion started to regain its lustre last year, as investors flocked to it for its safe-haven qualities, Mr. Turner said. The ongoing financial crisis has also boosted the yellow metal's appeal

“The nature of the financial crisis has been a collapse of trust in the banking sector, and if you can't trust financial intermediaries, then metal dug out of the ground make sense again,” he said. “This has been the perfect crisis for gold.”

A report on manufacturing released Monday suggested the U.S. economy is already in a recession, while another showed that construction spending plummeted. The negative news, which pushed the U.S. greenback to a record low against the euro on Monday, is expected to drive commodity market trading until at least March 18, when the U.S. Federal Reserve is to release its next interest rate decision.

“Right now it is all doom and gloom, and that is what metals thrive on,” said Jon Nadler, a senior analyst at Kitco Bullion Dealers in Montreal.

The confluence of a weaker U.S. dollar, higher crude oil prices, and further subprime woes are “playing right into the hands of a speculative metals trader,” Mr. Nadler said. “This is an anxiety premium that is being built into this by the convergence of all these news flows.

Hedge funds, he said, are “throwing tons and tons of money at these markets, mostly for a lack of better alternatives. So that is snowballing and to some degree actually distorting the fundamentals.”

Mr. Nadler said gold could rise to $1,010 and $1,080, but warned that the “risk of a correction has risen exponentially.” Some traders believe that bullion's runup will ease after the Fed's next meeting.

Bullion's run toward $1,000 is unfolding as the annual Prospectors and Developers Association of Canada Convention (PDAC) takes place in Toronto. Although Canadian gold stocks have lagged the jump in gold prices, the S&P/TSX gold subindex was leading the gains on Monday.

Still, shares of Canadian junior miners have remained on ice when compared with gold's massive run, Mr. Nadler said. “PDAC euphoria notwithstanding, the problem is that they just have not done enough. No matter how good the gold story is, sluggish global stock markets, fluctuating currency markets and management risk are all still factors to contend with.”

Gordon Stothart, the chief operating officer of Iamgold Corp., said higher gold prices will add “some very significant value to our bottom line” in the form of higher revenue.

Rising bullion grants the Toronto-based company the “financial wherewithal” to develop projects, he said. “It provides some additional impetus to push our projects as quickly as possible and try to bring them online so we can take advantage of the high gold price.”

However, the price spike can also translate into higher costs and increasing unease in the investment world, Mr. Stothart said.

He expects gold prices to remain elevated: “Gold should hang in at a very high price ... a lot of people are moving away from the U.S. dollar currency and locking into something solid to help replace it.”

Jeff Nichols of American Precious Metals Advisors said that because gold's runup is being driven by investment buying, prices are bound to keep on climbing.

“Don't be surprised to see gold trade up to $1,100 or even $1,200 before year-end 2008,” he said. “And – with the right confluence of economic and geopolitical developments – we could see gold spike to $1500 or even $2000 in the next few years.”

With a file from reporter Virginia Galt.

© Copyright The Globe and Mail

Stocks to buy in a recession: Nuthin' says Shilling

Stocks to buy in a recession: Nuthin'

Monday, March 03, 2008

When economists were still forecasting sunny skies ahead last year, Gary Shilling was one of the few who stuck out his neck and called for a U.S. recession by the fourth quarter of 2007 – a call that is beginning to look spot-on.

Now, far from updating his initial call with told-you-sos, Mr. Shilling – president of A. Gary Shilling & Co. Inc. – is taking things to the next step. Forget about a shallow recession; this one is going to be deep. And forget about making money on specific sectors of the stock market; the downturn will be broad.

“Yes, it’s puzzling that equity price declines so far have been small in the face of the rapidly expanding cancer in financial markets, which has metastasized in the consumer spending body,” he said in his monthly letter to clients.

His theory, though, is that investors are still pinning their hopes on a massive rescue effort from the U.S. Federal Reserve – which he figures will not help this time around because of the severity of the U.S. housing market downturn.

He looked at various industry groups that make up the S&P 500 and charted their results for the seven previous bear markets that were tied to U.S. recessions. Making money on the stock market certainly seemed like a fruitless task, even if you concentrated on defensives.

The household products group did fine during the 2000-02 bear market, rising 33 per cent. But it fell 35 per cent in the 1972-74 bear market. The life insurance group rose 27 per cent during the 1980-82 bear market, but fell 45 per cent in the 1968-70 bear market. Even major pharmaceuticals have an uneven record as defensives.

“In this environment, it’s best to prepare for further big stock declines.” Mr. Shilling said. “[W]e favour buying Treasury bonds and buying the dollar sometime soon, but the rest are sell recommendations – selling housing and related stocks, selling consumer discretionary stocks, selling commodities, selling commercial real estate, etc.”



© Copyright The Globe and Mail

And This:
Lord Black behind bars

PAUL WALDIE

Monday, March 03, 2008

Coleman, Fla. — Conrad Black drove into the Coleman Correction Complex in Coleman, Fla., with his wife Barbara Amiel Black just after noon EST on Monday. He arrived about 2 hours ahead of the court-imposed deadline for him to report to the prison.

He will now begin serving his 6.5 year sentence for fraud and obstruction of justice.

The Blacks arrived in a grey Cadillac Escalade and drove past a throng of media. When the SUV left 30 minutes later, Ms. Amiel Black could be seen in the back seat through the vehicle's tinted windows.

Lord Black will now be searched, fingerprinted and given a brief orientation. He will share a room in a dormitory like complex with about 100 other inmates, mostly men convicted of non-violent drug offences.

He will go through a brief orientation and receive four sets of clothing.

Eventually, he will also be assigned a job, at a starting rate of 12 cents an hour.

Coleman is one of the largest prison complexes in the U.S. with more than 7,000 inmates. It has low, medium and maximum security wings. There are about 2,000 inmates in the low-security unit.

Lord Black had asked to serve his time in a prison camp in Miami but the request was denied. Lord Black is British and in general foreigners are not allowed to serve time in prison camps.

The prison in Coleman is about a 4 hour drive from Lord Black's ocean front mansion in Palm Beach, Fla.

CRO=$$$$ Small Float , Mine in 2009,Millions lbs Copper +

SUDBURY, ON, Feb. 28, 2008 (Canada NewsWire via COMTEX News Network) --

Canadian Arrow Mines, Ltd. (CRO: TSX-V) (the "Company") reports an exceptional intersection of high grade nickel copper mineralization from drilling at the Kenbridge Nickel Project in Northwestern Ontario. Diamond drill hole KB-07-180 assayed 2.95% Ni, 0.82% Cu, 0.07% Co over a core length of 21.5 metres, including a high grade section of 7.21% Ni, 0.67% Cu, 0.19% Co over 5.5 metres. This is the deepest hole that Arrow has completed on Kenbridge to date, with the intersection situated approximately 300 metres below the surface.

Mineralized diamond drill hole intervals reported are down hole core lengths only. NQ diameter drill core samples are split in half; one half being retained in its original core box and the second half sent to an independent commercial laboratory for analysis. Samples are analyzed by ISO 17025 accredited Accurassay Laboratories in Thunder Bay, Ontario. Samples analyzed for base metals (nickel, copper, and cobalt) are digested using aqua regia with an atomic absorption finish.

The exploration program is being carried out under the direction of the Company's Vice President of Exploration, Todd Keast P. Geo., a qualified person as defined by National Instrument 43-101. The information in this release was prepared under the direction of Kim Tyler, P. Geo., President of the Company, a qualified person as defined by National Instrument 43-101.

About Canadian Arrow Mines, Ltd.

Canadian Arrow Mines, Ltd. is an established Canadian exploration and development Company committed to developing and advancing base metal deposits close to existing infrastructure through exploration, development and acquisition. Shares of Canadian Arrow Mines trade on the TSX Venture Exchange under the symbol "CRO".

Source

Oil hits new record: $103.95 a barrel

Oil hits new record: $103.95 a barrel

JOHN WILEN

Monday, March 03, 2008

NEW YORK — The surging price of oil reached another milestone Monday, jumping to an inflation adjusted record high of $103.95 (U.S.).

The weaker dollar that has propelled oil and other commodities prices higher sent light, sweet crude for April delivery past $103.76 a barrel on the New York Mercantile Exchange. That's the level many analysts consider to be the true record high for oil, after its $38 barrel price from 1980 is translated into 2008 dollars.

The price later traded up $1.52 at $103.36, fluctuating with the normal ebb and flow of trading.

Oil's most recent run into record territory has been driven by the greenback's slump against other world currencies. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

Gold, copper and wheat are among the other commodities that have rallied in recent weeks as the dollar has fallen.

“It's coming down to another commodity price rally,” said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago.

The dollar has been weighed down by concerns about the U.S. economy and the Federal Reserve's interest rate-cutting campaign. Lower interest rates tend to weaken the dollar, which fell Monday to a new low of $1.5275 against the euro.

The struggling dollar has prompted a wave of speculative buying by oil investors seeking a safe haven from the ongoing volatility of the stock market. Such speculation can become self-perpetuating, driving prices higher and attracting even more speculators.

Many analysts believe oil prices aren't justified by crude's underlying supply and demand fundamentals. While supply disruptions in Nigeria and the prospect of a supply cutoffs from Iraq and Venezuela helped boost oil prices last year, domestic oil inventories are now rising even as a number of forecasters are cutting their demand growth predictions due to the slowing economy.

Prices were also supported Monday by tensions between Venezuela and Colombia over Colombia's killing of a top rebel leader in Ecuador; reports that Ukraine's president threatened a “gas war” with Moscow after Russia cut gas supplies over a financial dispute; and reports of a U.S. air strike on a Somali town held by Islamic extremists.

Investors are keeping an eye on OPEC, which meets Wednesday to consider production levels. Most expect the Organization of Petroleum Exporting Countries to hold output steady.

“Unless there's a surprise ... I think it's a non-factor at this time,” said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos., of OPEC's impact on trading Monday.

As for where oil goes from here, analyst estimates vary widely, with some predicting an eventual decline to the $65 or $70 range as supplies continue to grow and demand falls, and others seeing oil rising as high as $120 as investment capital continues to flow into oil markets from overseas.

For its part, the Energy Department's Energy Information Administration's latest prediction is that oil will average $86 a barrel in 2008, up 19 per cent from 2007, when oil averaged $72 a barrel.

Surging oil prices are boosting prices at the pump. The average price of a gallon of gas stood at $3.165 Monday, according to AAA and the Oil Price Information Service. That's down 0.1 cent overnight, but up nearly 70 cents from a year ago. The Energy Department expects gas prices to peak near $3.40 this spring, well above May's record of $3.227, but some analysts predict prices could rise to nearly $4 a gallon.

Diesel prices, used to transport the vast majority of the nation's goods, are also surging. Diesel prices hit another new record of $3.674 a gallon Monday.

Other energy futures also rallied Monday. In other Nymex trading, April heating oil futures jumped 5.58 cents to $2.8627 a gallon, and April gasoline futures rose 5.07 cents to $2.7206 a gallon. April natural gas futures gained 18.4 cents to $9.55 per 1,000 cubic feet.

In London, Brent crude futures rose $1.46 to $101.56 a barrel on the ICE Futures exchange.

© Copyright The Globe and Mail

Breakwater Provides Initial Exploration Results on Mina Profunda Gold-Zinc Project, Toqui Mine, Chile

Breakwater Provides Initial Exploration Results on Mina Profunda Gold-Zinc Project, Toqui Mine, Chile

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TORONTO, ONTARIO--(Marketwire - March 3, 2008) - Breakwater Resources Ltd. (TSX:BWR) has received initial exploration results for the Mina Profunda gold project area located directly underneath Dona Rosa and Aserradero. This exploration program is part of a 3,600 metre underground drill program investigating several sectors of the Toqui mine including Estatuas, Dona Rosa and Aserradero.


The first seven holes drilled along a north-south trend immediately beneath Dona Rosa have confirmed the continuity of gold mineralization within a separate calcareous sandstone horizon at a depth of almost 60 metres below mine workings. Drilling, spaced at 25 metre intervals, returned high grade gold intersections with average core intercepts of 12 metres. Exploration drilling will continue to infill this area.


Preliminary assay results received to date from our 2008 program are shown in the table below. Refer to map for location of recent drilling.



Drill-Hole Dip Azimuth Total From To Core True Zn Au
Length (m) (m) Length Thickness (%) (g/t)
(m) (m) (m)
------------------------------

--------------------------------------------
DAS-03 -90 27 235.2 196.8 209.1 12.3 11.3 2.6 8.3
degrees degrees
--------------------------------------------------------------------------
LCS-01 -53 216 75.6 51.1 70.4 19.3 16.9 1.7 3.5
degrees degrees
--------------------------------------------------------------------------
LCS-02 -49 167 102.8 71.4 85.0 13.6 8.7 2.3 14.6
degrees degrees
--------------------------------------------------------------------------
LCS-03 -64 158 75.2 53.3 65.5 10.7 9.3 3.5 6.1
degrees degrees
--------------------------------------------------------------------------
LCS-04 -69 324 60.1 45.5 57.6 12.1 11.3 3.5 9.2
degrees degrees
--------------------------------------------------------------------------
LCS-05 -48 359 92.2 76.2 84.2 8.0 5.5 3.6 0.5
degrees degrees
--------------------------------------------------------------------------
LCS-06 -72 84 77.5 61.6 72.1 10.5 7.9 2.6 4.4
degrees degrees
--------------------------------------------------------------------------
LCS-12 -89 304 56.1 38.2 51.1 12.9 11.9 3.4 9.9
degrees degrees
--------------------------------------------------------------------------




Exploration drilling over the last two months has tested a 20 metre thick tuffaceous-calcareous sandstone horizon located 40 to 60 metres beneath the upper fossiliferous limestone that hosts the main mineralization at Toqui. A rhyolitic intrusive sill, 35 to 60 metres thick, separates the two units. This deeper horizon was first recognized in 2000 when several surface drill holes (including DAS-03 which graded 8.3 g/t gold and 2.6% zinc over a true thickness of 11.3 metres) intercepted significant gold anomalous values. The recent drill results demonstrate that gold mineralization is an important component at Toqui and greatly increases the potential for a large gold-zinc skarn system within an untested stratigraphic horizon. This gold-zinc mineralized zone remains open, and additional drilling will test the areas along strike in the immediate future.


Access to this new area is possible from the development headings currently being driven to access the Porvenir deposit.


Breakwater is a mineral resource company engaged in the acquisition, exploration, development and mining of base metal and precious metal deposits in the Americas and North Africa. Breakwater has four producing zinc mines: the Mochito mine in Honduras; the Toqui mine in Chile; the Myra Falls mine in British Columbia, Canada; and the Langlois mine in Quebec, Canada.


The exploration programs at El Toqui are under the supervision of Torben Jensen, P.Eng. who is a qualified person as defined by National Instrument 43-101. All core samples are split in half at the drill site, with one-half of the core sample sent to Andes Analytical Assay Ltda. in Santiago for sample preparation and analysis by atomic absorption and fire assay for the gold values and high silver values. The other half of the core sample is retained on site. The pulp samples are sent to Assayers Canada in Vancouver, British Columbia for further analysis by ICP methods.


Forward-looking Statements


The information in this news release has been prepared as at March 3, 2008. Certain information included in this news release constitutes "forward-looking statements". The words "expect", "will", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to, risks associated with the mining industry such as government regulation, environmental and reclamation risks, title disputes or claims, success of mining activities, future commodity prices, costs of production, possible variation in mineral reserves, mineral resources, grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, the timing of estimated future production, capital expenditures, financial market fluctuations, requirements for additional capital, conclusions of economic evaluations, limitations on insurance coverage, risks associated with using third-party contractors, inflation as well as those factors discussed in the Company's most recent Annual Information Form on file with Canadian provincial securities regulatory authorities.


The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.


To view a map of the Mina Profunda Project, please click on the link below:


http://media3.marketwire.com/docs/bwr303.pdf



FOR FURTHER INFORMATION PLEASE CONTACT:

Breakwater Resources Ltd.
Torben Jensen, P.Eng.
Vice President, Engineering
(416) 363-4798 Ext. 232


or

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



© 2008 The Globe and Mail

Gold Bugs Predict Doom And Gloom-Lee Rogers

New tax-free account means there's planning ahead

PORTFOLIO STRATEGY

New tax-free account means there's planning ahead
Rob Carrick's ideas for managing your investments
Headshot of Rob Carrick

ROB CARRICK

March 1, 2008

In the financial world, people who use savings accounts, guaranteed investment certificates and bonds are second-class citizens.

The Tax-Free Savings Account introduced in the federal budget this week goes a long way toward eliminating this bias. For many people, this will be the new program's chief benefit when it kicks in starting in 2009.

From a tax point of view, there is no distinction between money earned through salary and the interest paid by GICs and the like. Dividends and capital gains both get special treatment that allows their after-tax returns to crush those from anything paying interest.

TFSAs are an investing equalizer. No matter what you put in it, and you can invest in all the same things as you can with an RRSP, you don't pay tax on your gains. Nor is there any tax to pay when you withdraw money from a plan.


The Globe and Mail

All of this highlights the fact that investors have some planning to do in the lead-up to the introduction of this new program next year (the usual proviso for minority governments applies, of course). To start with, TFSAs are ideal for interest-paying savings and investments.

If all your investments are tied up in your registered retirement savings and education plans, then a TFSA will be a perfect receptacle for your short-term savings and emergency funds. You'll want to use a high-interest savings account from the likes of President's Choice Financial, ING Direct, Manulife Financial, ICICI Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia, Citizens Bank of Canada, Canadian Tire Bank and more. Regular bank savings accounts are pointless in this or any other application because they pay only trace amounts of interest at best.

Critics of the TFSA point out that the tax benefits are small if you use even high-interest accounts for savings. An Alberta resident who earns $75,000 a year might pay all of $72 in tax on $5,000 invested a 4-per-cent high-rate savings account for a year. Still, it's a no-brainer to use a TFSA to protect that $72.

People with investments outside their registered plans need to think strategically about how they'll use TFSAs. Again, though, interest-paying investments look like a top candidate for inclusion in these plans.

On reading the budget this week, Kevin Dancey, president and CEO of the Canadian Institute of Chartered Accountants, immediately singled out strip bonds as being an ideal TFSA investment. Strips are bought at a discount to their value at maturity, and the differential is computed into an annualized yield. You don't actually get the usual interest payments each year with a strip, but you'll pay tax as if you did. Not in a TFSA, though.

David Shymko, a financial adviser in Vancouver with Macdonald, Shymko & Co., said he sees TFSAs primarily as a tool collecting interest income. "Dividends would be wasted in there, just as they're wasted in registered accounts."

A well-hidden budget provision will slightly raise personal income tax rates on dividends starting in 2010, but your marginal tax rate on dividends (that's the tax rate on your last dollar earned) can in some cases be much less than half of what it is for interest income.

TFSAs and investing for dividends and capital gains aren't necessarily incompatible, however. It all depends on how extensive your non-registered investments are. If you have a large, diversified portfolio, you'll want to keep interest-paying investments in the TFSA and your stocks outside. If you have small non-registered holdings, it can make sense to consolidate in a TFSA and let the portfolio ride for the long term. When you finally get around to withdrawing funds from your plan, the taxes you avoid could be significant. Quite likely, they'd outweigh the benefits of using a TFSA for interest-paying investments only.

The most notable feature of the TFSA may be its utility for virtually every demographic above the age of 18. For example, seniors are expected to be avid users. First, they'll be able to save or invest any surplus funds from their registered retirement income fund withdrawals in a tax-sheltered format. Second, any money they pull out of a TFSA won't affect their income in a way that negatively affects their eligibility to receive Old Age Security and other government benefits.

There are a couple of tax wrinkles with TFSAs that will lessen their appeal to aggressive stock traders.

In a conventional investment account, you can get some use out of your dud stocks by applying losses against taxable capital gains. Capital losses in a TFSA are wasted. There's also no point in using borrowed money to invest in a TFSA because you won't be able to deduct interest costs like you can in a regular investment account.

Investors with existing non-registered savings and investments may be wondering how they can get these assets into a TFSA. If you transfer stocks or mutual funds over, it's considered a sale and you'll be liable for taxes on any applicable capital gains. GICs will be tricky because they're not a liquid asset.

"We honestly haven't gone into those kinds of issues yet," said Linda Knight, president of BMO Mutual Funds. "The reality is, people who have non-registered savings and investments now are going to want to use this vehicle. So we'll look at how to make that transfer as advantageous and easy as possible."

Another issue that still needs to be resolved is whether financial institutions will charge annual administration fees on TFSAs, just as they do with RRSP and RESPs. "Even if they get $10 or $15 registration fees, this will be a nice program for the banks, or other financial institutions," Mr. Shymko said.

Regardless of how you plan to use a TFSA, don't open one before you check the fees. There are bound to be some no-fee TFSAs offered and they're the ones that will be most attractive.

Taxes and the TFSA

Starting in 2009, the new Tax-Free Savings Account will allow you to invest $5,000 a year without paying taxes on your gains or your withdrawals. What investments should go in a TFSA? One way to decide is to look at how much of a benefit you'll get from the tax sheltering provided by a TFSA.
Marginal tax rates on investment income ('07 tax year)
TFSA Non-Registered (%)
B.C. resident making $50,000 per year
Interest income 0 30.7
Dividend income* 0 4.4
Capital gains 0 15.3
Ontario resident making $100,000 per year
Interest income 0 43.4
Dividend income* 0 20.3
Capital gains 0 21.7
Nova Scotia resident making $150,000 per year
Interest income 0 48.3
Dividend income* 0 28.4
Capital gains 0 24.1

*applies to eligible dividends paid by corporations; also, taxes on dividends will rise slightly starting in 2010

SOURCE: ERNST & YOUNG TAX'S ONLINE 2007 PERSONAL TAX CALCULATOR

*****

TFSA ABCs

Basic concept: A vehicle for tax-free savings and investment available to anyone 18 and older.

Start date: 2009

limits: $5,000 per year to start.

Tax on gains: Nil

Tax on Withdrawals: Nil

Deductions: Nil

Unused Contribution: Available to carry forward.

Funds Taken Out: Withdrawals are added back to your total contribution room.

Allowable Investments: Same as RRSPs, which means stocks, bonds, funds and savings accounts.