WHAT TO DO, WHAT TO DO, WHAT TO DO…
We are here in Alaska with a group of brokers, analysts,
newsletter writers and investors, so it is not long before we
get to the popular subject of...stocks.
Brian Butterworth, geologist and former analyst is now
in investment banking with Research Capital and he tells us
that one of his favorite stories is Underworld Resources (V-
UW) and as you’ve noted, that stock has come up as a fa-
vorite pick of several folks over the last while.
Many people are aware of the usual resource market
cycles—particularly lately for gold of “buy in September/
October and sell in April/May (then go away). But there is
also another cycle that those with gray hairs can remem-
ber.
That cycle goes back a couple of decades when about
the only exploration being done anywhere in the world was
in the Canadian North and Alaska and it was considered the
Northern Canadian Cycle in plays that had big hopes that
would start in the spring, work would get going in the late
spring and summer, create some interest and have some
stocks pop. But in the fall, when things would shut down
and go quiet, you knew that interest in those stocks would
wane as their exploration programs wound down.
Underworld is a decidedly Northern story and the heart
of the Klondike (maybe the source of some of the gold for
that rush?) and does that mean when work stops shortly,
interest will wane?
Sure more drilling results will be out for the next two
months or so and a resource base is expected by Christ-
mas, but then it will be decidedly quiet. How to keep up
interest?
Well, Michael Williams, chairman of the company is a
well-respected mining guy, but will the northern cycle per-
sist, or more drilling just echo what we have seen in the
last while...ever more excellent drilling results. What to do,
what to do?
No such problems with another Butterworth pick of
Keegan Resources (T-KGN) which happens to be one of our
favorites. Ghana is thousands of miles south from the
nearest snow, so there is no Northern Canadian cycle there
at all.
Mind you, Keegan also suffers from seasonal prob-
lems...the rainy season in Ghana can shut down things eas-
ily for two to three months when mining equipment simply
can’t operate in the muck.
UCORE URANIUM
(V-UCU)
$0.80 -0.04
We are in Ketchikan, Alaska—one of the prettiest little
towns you will ever see—so no wonder there are so
many tourists that take the Alaska cruises.
The economy
here has seen the logging industry totally devastated and
now even the cruise business is down because of the
economy. Still, one looks at the harbour and you see
how important tourism is. On this day, four cruise ships
are in port with 8200 tourists aboard that all hit a town of
a mere 7700 people.
There are duck boat tours, charter
flights to see the ocean, fiords and rivers, charter fishing
for the day and a walk-up fresh fish creek to see the in-
credible salmon run and a shoppers delight built up for
the tourists along this creek. There are also “Married
Man’s Walk” but we won’t get into that at this time.
Alaska does have quite the mining history, built on the
Gold Rush days to the Yukon and mining is still impor-
tant in the State and mining-friendly.
Several analysts, brokers, newsletter writers and your
humble servant are up here to see Ucore Uranium’s (soon
to be called Rare Earth One) Bokan Mountain. A former
uranium producer of a few decades ago with lots of rare
earths beside the uranium. The rare earths were known
about for some time—but those rare earths were then of
little value. Now rare earths are one of the stories of the
day and the question is, just how much Ucore has be-
cause there have been previous estimates made of as
much as 350 pounds of material. But based on very pre-
liminary work and the resource could be a lot smaller...or
larger. Also work needs to be done to see just how eco-
nomical the ore is.
John Kaiser is here—the editor of the Bottom Fishing
Report and is one of the few geologists anywhere who
knows something about rare earths. With names like
lanthanum, which is used in batteries. Neodymium, used
in super-magnets; europium, used in monitors and pan-
els and dysprosium, an extra ingredient being used in
super-magnets to help control temperatures. There is a
whole long list on names in the rare earths, but how
about this one...ytterbium...as some of these names
could surely be used in a “Scrabble” game sometime!
We hope to publish an interview with Kaiser this Fri-
day or Monday that was taped up in Ketchikan as Kaiser
believes we’ve gone into a six-month period of “rare
earth mania.” Now that we know that the Chinese are
cutting back sales and the Chinese supply 93% - 97% of
all rare earths around the world, there could be a short-
age developing down the road.
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