Gold Getting Ready To Run Again?

Some companies that you should take a closer look at...

Edgewater Explorations (EDW:TSXV)

dgewater Exploration is a Canadian-based mineral exploration and mine development company with gold assets in prolific gold regions Ghana West Africa and La Coruña, Spain.

Together with FeatherStone Capital Advisors, Edgewater successfully secured two mid-stage gold projects from Red Back Mining and Lundin Mining. Red Back Mining, now Kinross Gold Corp. optioned to Edgewater the Enchi Gold Project in West Africa, Ghana, located 70 km southwest of Kinross’ 5 million oz Chirano Gold Mine. The Enchi Gold Project covers a 40 Km strike length of the Bibiani Shear Zone that hosts a number of major gold mines and deposits including the Chirano Gold Mine and the 5 million oz Bibiani gold deposit. Ghana is the second largest gold producer in Africa with 2009 production totalling 2.9 million ozs.

In Addition, the Company owns a 100% interest in the Corcoesto Gold Deposit (”Corecoesto”) in northwest Spain as well as an additional 7 gold and gold-copper projects totalling 50,013 ha in southwest Spain. An updated Technical Report was recently filed for Corcoesto by Alan Noble, P.E. of Ore Reserves Engineering. The Report estimates a Measured and Indicated resource of 5,722,000 tonnes grading 1.74 g/t gold and containting 325,000 ozs of gold (0.65g/t gold cut-off) with Inferred Resources of 20,265,000 grading 1.76 g/t gold containing 1,149,000 ozs of gold. Open in many directions Edgewater believes the under-explored asset has the potential to expand beyond the current Resource Estimate. Edgewater has begun a scoping study on the Corcoesto Gold Project and has a 35,000m diamond drilling program underway in Ghana.

Corvus Gold (KOR:TSX)

Corvus Gold Inc. is engaged in the acquisition and exploration of gold-related mineral properties located in Alaska and Nevada. As a spin off of International Tower Hill Mines, the company currently holds four prospective projects in Alaska and one project in Nevada ranging from early stage to advanced exploration. Three of these projects have current National Instrument 43-101 compliant estimated Indicated and Inferred resources.

Corvus’s mandate is to become a non-operating gold producer with significant carried interest and royalty exposure. To meet this objective, the Company has joint ventures on each of its Alaskan projects and anticipates that these projects will have significant partner funded work taking place in 2011 with the potential for additional partner funded work for 2 – 4 years afterwards. In Nevada , Corvus controls a 100% interest in the North Bullfrog Project which has a number of high priority, bulk tonnage and high-grade vein targets which was explored by a Phase I 17,820-metre drill program completed in June 2011 that resulted in an updated resource report in October 2011. With a current size of 1.6M oz gold indicated and inferred resources, a preliminary economic assessment of the project is currently underway and is expected in Q1 of 2012.

Tasman Metals TSX.V : TSM (TAS:NYSE)

Tasman Metals Ltd (TSX.V : TSM; Frankfurt : T61; NYSE-AMEX: TAS) is a Canadian mineral exploration and development company focused on Strategic Metals in the European region.

Strategic metal demand is increasing, due to their unique properties that make them essential for high technology and environmentally-beneficial applications. Strategic metals include the 15 rare earth elements (“REE”), and also zirconium, yttrium and niobium. Since over 95% of REE supply is currently sourced from China, the EU is actively supporting policy to promote the domestic supply of strategic metals to secure high-tech industry. Wind turbines and hybrid vehicles like the Toyota Prius simply cannot be built without rare earth minerals.

Tasman’s exploration portfolio is uniquely placed, with the capacity to deliver “high-tech” metals from politically stable, mining friendly jurisdictions with developed infrastructure.

Ucore Rare Earths (UCU:TSXV or UURAF:OTC)

Ucore Rare Metals Inc. is a well-funded junior exploration company focused on establishing REE, uranium and other rare metal resources through exploration and property acquisition. With multiple projects across North America, Ucore’s primary focus is the 100% owned Bokan – Dotson ridge REE property in Alaska. The Bokan – Dotson ridge REE project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British Columbia and has direct ocean access to the western seaboard and the Pacific Rim, a significant advantage in expediting mine production and limiting the capital costs associated with mine construction.Ucore Rare Metals Inc. is a well-funded junior exploration company focused on establishing REE, uranium and other rare metal resources through exploration and property acquisition. With multiple projects across North America, Ucore’s primary focus is the 100% owned Bokan – Dotson ridge REE property in Alaska.

The Bokan – Dotson ridge REE project is located 60 km southwest of Ketchikan, Alaska and 140 km northwest of Prince Rupert, British Columbia and has direct ocean access to the western seaboard and the Pacific Rim, a significant advantage in expediting mine production and limiting the capital costs associated with mine construction.The Bokan properties are located in an area reserved for sustainable resource development with an existing road network providing access to the main target areas. REE mineralization at the Bokan-Dotson ridge project occurs in a well-demarcated vein system related to a Mesozoic Bokan peralkaline granitic complex. However, a number of other occurrences of REE mineralization are also located within, or at the margins of the complex. Viewed in a geological and geophysical context, the Bokan complex is a distinctive circular structure and is highly prospective for rare earths deposits.

Dire warning from Sino-Forest...The Saga Continues

The chase by Marty Cej:

Sino-Forest, the Hong Kong-based and Toronto-listed forestry company that saw more than $6 billion in value evaporate last year amid fraud allegations, said late last night that its historic financial statements and audit reports should not be relied upon. The admission appeared in an announcement that the company is "optimistic" that it will reach a waiver agreement with some of its bondholders. While shares of Sino-Forest remain halted with a nominal value of a penny a share, the stock of Greenheart Group, a Hong-Kong listed timber merchant, rallied 50 percent overnight to close at 90 Hong Kong cents. Sino-Forest remains one of the most compelling stories in Canadian financial market history for several reasons, many of which will be explored Friday morning with short-seller Carson Block, whose allegations in June toppled Canada's biggest forestry company. Sino-Forest continues to struggle to explain and refute Block's allegations or address issues raised by the company's auditor and the OSC. Beginning at 8:30 am Eastern, Block will take us through the research that led him to accuse Sino-Forest of fraud and to tell us whether it can happen again.
Among the most widely-read stories on BNN's website this morning was the warning from Canadian bank CEOs that Canada's housing market is showing signs of peaking. We made it our top story yesterday afternoon and will continue to pursue it today with Bank of Montreal CEO Bill Downe, who joins us for half an hour starting at 1:00 pm Eastern. It's a story that affects every Canadian and all of our viewers.
Auto parts maker Magna said that 2012 revenue will rise to a range of $27.8-billion to $29.3-billion, just shy of the average expectation for sales of $29.6-billion. It's hard to say whether this announcement will be taken by the market as a warning since sales will be higher than 2011 and the new forecast is higher than its own previous forecast if still below the market' expectations. The fact is the company continues to put more of its stuff into each car, sales are rising and the operating margin is widening. There is a lot to examine in the company's announcement this morning. Thankfully, Frances Horodelski is a CFA and can spit out ratios like a Nascar fan spittin' out tobaccy juice. Yeehaw, I say. Yeehaw.
After Steve Ballmer's rousing speech to kick off the Consumer Electronics Show in Las Vegas and intimidating poor Ryan Seacrest on stage, Microsoft now says that industry-wide sales of PCs will probably fall short of analysts forecasts in the fourth quarter due to supply issues stemming from floods in Thailand. Watch shares of the PC makers, the chipmakers and Microsoft. Ford Motor Co. said yesterday as well that its profit was hurt by the Thailand floods. Are there any more warnings to come from companies with significant production in this key country?
The Federal Statistics Office in Weisbaden, Germany, said today the German economy shrank "roughly" 0.25 percent in the fourth-quarter, leading some economists to conclude that Europe's largest economy has already slipped into recession. While most economists and investors agree that broader Europe is already in a recession, perhaps even a severe one, word that Germany may be in the same boat has sent European stocks, North American index futures and copper prices lower. While the Federal Statistics Office in Weisbaden says its estimate is "unofficial," I dare you to call up the Federal Statistics Office in Weisbaden and challenge their figure. I dare you.
Keep an eye on oil today as Germany pushes for a European embargo on importing Iranian oil. Iran also said today that one of its nuclear scientists was killed by a magnet bomb fixed to his car by a motorcyclist who sped past. Iran has blamed Israel for the assassination, which adds to a number of killings of Iranian nuclear scientists in recent years.
Mitt Romney solidified his status as the frontrunner for the Republican presidential nomination by taking the New Hampshire primary last night. Libertarian Ron (The Fed Oughta Be Dead) Paul surged to a second-place finish, which surprised no one since New Hampshire's official slogan is "Live Free or Die" and its unofficial slogans include "New Hampshire: Go Away and Leave Us Alone" and "New Hampshire: Don't Take it For Granite."

A tale of two job reports

The chase by Marty Cej:

Prime Minister Harper says job creation will be among his top priorities in 2012, a good thing considering Canada's unemployment rate rose for a third straight month in December, putting the country on an uncertain footing for the new year. The unemployment rate rose to 7.5 percent from 7.4 percent last month as a gain of 17,500 new jobs was outweighed by a surge in people looking for work.

The headline gain of 17,500 failed to erase the plunge 18,600 jobs in the preceding month and was marked by a jump of 43,100 part-time positions that helped offset a tumble of 25,500 full-time jobs. Economist Doug Porter at BMO Capital Markets says "the soggy details reinforce the point that the job market struggled late last year after a banner start to 2011," and Mark Chandler at RBC notes that "the job trend will be seen as a disappointment."

The Canadian dollar dropped in the wake of the report as the market priced in the likelihood that the Bank of Canada will have to remain on the sidelines for longer or perhaps lean towards interest rate cuts if the economy deteriorates much further. We need to take a look at the new expectations for the Bank of Canada, the split between regions – Quebec shed 25,700 jobs! – and the industries that are creating jobs vs. those that are losing them. We also need to talk about the quality of the new jobs that were added this month.

And we'll also need to compare the Canadian jobs picture with the U.S. situation. The U.S. economy added 200,000 jobs last month compared to an estimate of 155,000 new non-farm jobs. The unemployment rate fell to 8.5% from 8.7%. The U.S. report will dominate price action for financial markets today.

In the meantime, European stocks are mixed, currencies and commodities are little changed, and stock index futures are pointing to a mixed open as traders await the U.S. jobs report. Also, Hungary's debt was just downgraded to 'junk' status by Moody's.

One of the more interesting markets to cover today will be base metals after Alcoa said late yesterday that it would cut its global smelting capacity by 12 percent, or 531,000 metric tons. We need to ask what the cut means to world supply and what it tells us about global demand. We also need to ask what it means for Alcoa's earnings and how it sets up the market for the start of fourth-quarter earnings season, which Alcoa kicks off on Monday.

As noted earlier this week, the negative to positive ratio of S&P 500 profit warnings vs. forecast upgrades currently sits at 3.8. In other words, almost four companies are warning for each company that is raising its guidance. The historical average is 2.2. This could be a tough earnings season if analysts don't start cutting their forecasts soon.

Among the Canadian corporate stories we're watching today is Jean Coutu, which reported a modest gain in both profit and revenue in the third quarter. The company had plenty to say about the "deflationary impact" of the introduction of many new generic drugs. Plenty to see here, folks, plenty to see.

I'm running late again and the web editors are breathing down my neck with their chai tea breath, which is intimidating in a strangely calm yet energizing way.

Iowa aftermath

The chase by Marty Cej:

Iowans have spoken and said that Republican voters across the U.S. should now choose between the three candidates who have said the following:
1. "I do take the position that we should just end the Fed."
2. "Isn't that the ultimate homeland security, standing up and defending marriage?"
3. "I've always been a rodent and rabbit hunter. Small varmints, if you will."
Tough call, tough call.

Sometimes, when you air your dirty laundry in public, it can smell like a hockey locker room after a weekend-long Old Timers' tournament. The Chairman of Canadian Pacific yesterday sent a public letter to Bill Ackman of Pershing Square Capital, CP's biggest shareholder, scolding Ackman for leaking misleading information to the media, including the assertion that CP had invited the former head of CP competitor CN Rail to talks. Ackman responded late yesterday with a public missive of his own, stating that CP's Chairman had in fact called him personally to arrange a meeting with CN Rail's former boss.

The thing of it is, both letters can be true since arranging a meeting with someone is not necessarily the same thing as inviting someone to a meeting. Both sides have agreed that talks to improve CP's operating performance have been constructive so it seems the conflict lies in determining exactly how to do it. Ackman wants the CEO of CP out while the board of CP, at least for now, is confident in the current management. So what we are seeing with these letters is not really a tiff over the facts but a fencing match between PR staffs.

I might have given Ackman a point for transparency, but then he used the word "effectuating." In terms of angles, we need to look again at the performance of CP under CEO Fred Green, operationally, financially and as a stock. We need to compare it to competitors not just in Canada but in the U.S. as well. We need to take a look at the issues of corporate leadership, governance and activist investing, and I'm also interesting in hearing more about the strategy of conducting a debate like this through the media. A great story with compelling characters and thousands of jobs and billions of dollars at stake.

As we approach the North American open, European stocks are declining and U.S. stock index futures are pointing to an early decline. Oil is down just a touch and copper has slipped a bit, too. Traders are pointing to Italian bank UniCredit SpA's decision to sell 7.5 billion euros worth of new shares at 43 percent less than yesterday's closing price in a bid to shore up its capital. The size of the discount has rattled markets by raising concern that demand for new bank equity has plunged at a time when many European financial services companies are preparing to go to the same well. We should also add that overnight deposits at the ECB have surged to a record high, again.

We'll zero-in on the Iowa caucuses on Headline this afternoon and ask whether Canadians – or Americans, for than matter – should care. Among our guests is Bill Galston, former policy advisor to Bill Clinton and now Senior Fellow, Governance Studies, at the Brookings Institution. We'll also talk about the economic impact of the U.S. election cycle with John Lonski of Moody's.

Ahead of that, though, Business Day AM will sit down with David Darst, Chief Investment Strategist at Morgan Stanley Smith Barney where he oversees more than a trillion dollars in assets. I'll ask him whether he is fretting over the race for the White House and how he is putting those dollars to work in 2012. He sits down with us at 11:00 am Eastern.

Commodities continue to be a compelling story with expectations continuing to rise for a rebound in many prices this year. Oil, for example, has already vaulted back over $100 a barrel. The question is whether recent and expected gains are justified by the outlook for economic growth. Does oil belong at $100 a barrel with Europe poised on the edge of what could be a severe recession?

Natural gas remains a conundrum for investors and the companies involved in the sector.