Archive for the 'Northern Dynasty' Category

Peter Grandich on Business News Network “Market Call Tonight”

December 29th, 2008

Watch here

Alert! 9:30AM EST

December 29th, 2008

Some working vacation this has turned out to be. I’ve been as sick as the U.S. economy for almost a week. I contacted Washington to see if I could qualify for TARP money but have not heard back. There are three things I truly dislike; The Dallas Cowboys/Jerry Jones, TOUT-TV (CNBC-TV) and going to doctors. My spirits were uplifted thanks to the Philadelphia Eagles and I now get both Bloomberg and Business News Network on the computer. Unfortunately, I had to go to the doctors last Friday. I’ve had bronchitis numerous times and it appears I need to get a chest x-ray and pulmonary test. Thank God it wasn’t a brain scan as I know what the results would be  based on my junior resource performance in 2008.

I feel somewhat better (especially since I just heard Mangini was fired as the coach of the Jets) and hopefully BNN will be able to arrange for me to go to their NYC studio to do my interview tonight.

Despite holiday trading conditions, I do think some new advice is warranted (over time you’ll know if it ends up worthy). I’m going to start some sort of model portfolio that I will need to find a way you can track it on the blog. I’m going to use today’s share prices as the original recommended price and keep some sort of open model of bearish, bullish or neutral on markets in general. Please give me some time to address this.

With this in mind, here we go:

As you know I turned bullish on oil. Today, I’m officially recommending the following oil-related stocks that will go into the model portfolio. They’re:

DXO-NYSE $2.01, OIL-NYSE $20.35, HOU-TSX $1.95, IYE-NYSE $26.81, XLE-NYSE $45.16, HEU-TSX $3.89 These are all ETFs. As noted in my previous oil-related commentaries, depending on your individual needs and circumstances, you should consider a plan allotment plan to these investments.

While I still think the 10-year U.S. Treasury Note can go under 2% yield, the time has come to begin a process of shorting U.S. Treasuries, which are the last asset class in a gigantic bubble. To do this, I would use PST-NYSE $51.88 and TBT-NYSE $36.40. Again, each reader needs to look at their own needs and wants to judge is this worthy and how to allocate their portfolio.

Since starting the blog, I’ve spoken about two mining and exploration shares, NAK-AMEX $3.36 and Hudson Bay Minerals TSX $2.90. I don’t believe the companies I’m engaged by should be part of a model portfolio because of the conflicts of interest and potential bias but they will continue to be featured on the blog.

Okay, my so-called vacation is over and barring any further health issues, I hope to be back to you here as often as needed. Thanks for all the great support and through the grace of God 2009 will be a great year.

Oil - A Good Buy or Good-Bye? 7:15PM EST

December 17th, 2008

You know you’re in a serious bear market when you correctly foresaw a particular price movement and a place where you would look to buy if it gets there, only to have that price objective reached and you’re too scared to pull the trigger. That sums up my position on oil. $40 has been a price level I’ve pointed out as a multi-year support level (see chart below) and a point where I could turn bullish again.

A couple of weeks ago, I spoke about $50 being a support zone but felt it wouldn’t hold and to look for the $40 area. It got down to $40.50 but because I was (and still am) extremely bearish on the economy, I passed on stepping in at that time. Oil could only manage to rally back to previous support of $50 and has come back down to a lower low just above $40. What’s troublesome about this is it did so despite the announcement from OPEC today. One has to ask themselves what news in the coming days could drive it higher? And if we break much below $40, how much technical selling can that trigger? So you think this crystal ball game is easy?

As mentioned previously, the remaining days of December will see much thinner markets which in the case of oil, could exaggerated its movement.

I’m so comfortable in my bear den. Gold is doing well and the worse appears over for the mining stocks. Sit back, enjoy the holidays and wait to the New Year for any new position is the easy (and maybe smart) road to take. But why should I start making my financial life easy? Haven’t I shown to make some dumb moves?

Okay, you got me. Instead of throwing a log on the fire, roll up in a blanket and wait to see what Santa brings me; I’m going to remain on high alert when it comes to possibly entering the oil market. Let’s just hope I don’t end putting coal in yours and mine Christmas stockings.

U.S. Dollar - Major breakdown but some profit-taking is warranted and healthy.

Gold - Not a peep in the regular press - thank you. Here too, some profit-taking is in order and healthy.

Northern Dynasty Minerals - A nice pop brings many emails asking what’s up? The share price didn’t seem to be the right answer. One could argue our friend from the Far East is buying. I can’t imagine they just wanted to go from 9% to 10%. Consolidation in the gold price should bring some profit-taking into NDM but the stock is starting to look good on the charts.

Is Bernanke Good at Craps?

December 16th, 2008

I couldn’t choose between a “Hail Mary” pass or shooting dice to describe the Federal Reserve’s move today. Make no mistake about it, this is a sink or swim move. Knowing all previous moves have not done the trick (despite Wall Street hailing all of them as just the right medicine), the Fed has effectively decided to shoot their last silver bullet through a cannon. For those who believe this was the ammunition needed to get the U.S. out of a very deep funk, I suggest you look at the history of the BOJ (Bank of Japan) and see all the silver bullets they fired but never hit their target. I believe the Japanese not only make better cars then us, but also bullets.

The rest of the week is shaping up to be the most critical in weeks, if not months. The seasonally favorable period I’ve spoken about, plus the full court press of the “Don’t Worry, Be Happy” crowd on Wall Street (and Tout-TV) hailing this as a “watershed” event (where have we heard that before?), gives the bulls an opportunity to exploit this crap shoot to the upside. We’re either going to rise or fall a 1,000 points in fairly short order.

I believe the FED is in panic mode. They see that all their previous moves has done little and believe one big “shock and awe” shot across the bow of the “Good Bear Ship Lollipop” could sink or greatly remove these pirates who have controlled the waterways at Wall & Broad.

If the DJIA can’t get above 9,000 and stay there, we could see a sharp selloff back to the lows. A close above 9100 could bring on a test of 10,000. Yours truly is going to sit this one out in the cheap seats.

Oil - Tomorrow is a critical day as well. Not only to we get the weekly supply figures for oil but also are expecting word from OPEC. Stay tuned.

U.S. Dollar - Bye-bye!

Gold - Quietly (and hopefully it will stay that way), gold has put in a major bottom at $700 and has the foundation to challenge the old highs just above $1,000. We should consider selling if Tout-TV gives it a positive spin combined with Dennis Gartman and Jon Nadler (only kidding). Interesting video

Important Note - I messed up on Northern Dynasty Minerals news. Mitsubishi bought one million shares in the open market and went from 9% to 10% ownership. Very bullish.

Update 7:30PM EST

December 15th, 2008

As noted a few weeks ago, we were entering a highly seasonably favorable period of the year for the stock market; A.K.A the Santa Claus Rally. The mortally wounded bulls are hailing this as yet another bottoming process. I can’t remember if this is the ninth or tenth one (there’s been so many all the way down from 14,000 on the Dow). While the DJIA rally has been contained under 9,000, one could start to argue a reverse head & shoulders is forming (a bullish pattern). If not for the horrific economic picture, I could buy into this development. I continue to hold onto my feathers as I sit this out in my chicken coop.

 

Gold has rallied nicely off dollar weakness and continuing strong physical buying. The “Talking Heads” on TOUT-TV can knock gold all they want (and they do) but it has held its value through 2008. I bet these salespeople/anchor personnel wish their 401k did as good. Let’s see how well gold does when the dollar consolidates its losses.

U.S. Dollar - The top I called for appears to have been put in. We can see some consolidation this week but make no mistake about it, Uncle Sam’s paper is only going to get cheaper in 2009

Oil - Things are getting quite interesting. We fell from $140 to $50, which was an area of support. It hardly bounced off $50 before breaking down and heading straight to $40.50. I said that was a multi-year major support zone. Oil was deeply oversold and the rally back to previous support at $50 was a typical technical pattern. The failure to hold $50 and fall back to $45 strongly suggests that unless OPRC does something beyond dramatic, not only is $40 likely to be tested again, but it may break that support as well. Stay tuned.

Interesting article on mining shares

Speaking of mining shares, two of my biggest personal holdings and companies I highly profiled, had news today:

  • Mitsubishi Corp. Surpasses 10% ownership in Northern Dynasty (AMEX: NAK)

http://www.sec.gov/Archives/edgar/data/877197/000095014208001986/sc13ga2_ndm.htm

What’s interesting about this filing is to go from 9.9% to 10% was only a buy of 1,500 shares. The cost to file this action cost more than that. The rule is once you hit 10% you’ve to file on any increase that takes you up another one percent or more. This means if and when they acquired 11% they have to file. Then 12% and so on. It’s just my guess but I anticipate we’re going to see another filing before too long. They can go to 19.9% without triggering NAK’s poison pill.

  • Geologix Explorations (GIX-TSX) announced the following; There’s no question that the credit crunch has hampered the ability to raise capital and/or structure a deal that can complete the purchase of the option. Having just 60 days makes it more paramount. There’s nothing to do but await the next 60 days and see what management is able to do. 

        

Market Update 9:00PM EST

December 5th, 2008

U.S. Stock Market - I said going into Thanksgiving week the stock market was at oversold levels normally seen at or near a bottom. In fact, I was looking to get back in if there was a washout the Friday before turkey day. I noted both the week of Thanksgiving and the month of December is a highly favorable seasonal time for the market. However, with the economy getting bleaker by the day, I remained on the sidelines. People are asking me did I miss the bottom. My response is you can go broke trying to catch it. From 14,000 down, widespread calls for a bottom were a daily occurrence and if the previous low held for more than a few days or weeks, the street said that the bottom was in. They continually marveled how the market ignored bad news (like today) only to eventually take out the previous lows. Now the low around 7500 is being hailed as the bottom. For the rest of 2008 and perhaps as long as into March, it may hold. Most of the distress selling appears over for now. Despite a bad year, the Santa Claus rally will be the theme for the next couple of weeks. Then in January, all eyes will be focused on the inauguration of Obama. The natural human response will be a sense of renewed hope and the “Don’t Worry Be Happy’ crowd will play that up big time.

But before you break out the party hats and horns, let me play Scrooge and bah-humbug happy days are here again.

Much of the bullish reasoning (what’s left of it) is that we know we’ve been in a recession for a year and recessions normally never last more than a year or two. The market has always come back and this time won’t be any different. I believe the fallacy of this theme is this is not a typical recession where we’re going through a normal cyclical downturn. It’s an once-in-a-lifetime life or death mess that still has no end in sight and gets worse as time goes on. Another critical difference is we were a creditor nation through most recessions and now we’re the world’s largest debtor nation. In past recessions, the average America was not indebted up to their ears, had savings to draw on and wasn’t living anywhere near beyond their means as they were entering this mess. We’re also no longer a major industrial nation but now one that depends on large-scale consumer spending. Where does the consumer get the money now to spend? The stock and real estate boom is over. No longer can the American home be an ATM. They have no or little retirement savings and there’s no way easy credit is coming anytime soon. And I believe many Americans, especially those over 55, who are really scared now, are going to take the attitude of “Fool me once, shame on you. Fool me twice, shame on me” and become far more conservative of what’s left of their wealth.

I believe the course taken so far by government is similar to what Japan did after their stock market topped out near 40,000 (now under 8,000 twenty years later). They added massive liquidity, allowed interest rates to fall below zero, cheapen their currency, yet spent almost half of the last twenty years in recession. And they had substantial savings versus our mountains of debt.

I agreed that we’re not going to see another 50% down so if you want to join the crowd and say the worse is over, it’s okay. But to expect any major sustained rise where in a year or two all or most of losses are erased is foolhardy. What I do think is possible between now and March is a wide trading range of 7,500 to 9,500.

Interesting reading:

Gold “A battle won is a battle which we will not acknowledge to be lost.” - Ferdinand Foch

It’s not easy being a gold bug these days. While gold has certainly held its ground in 2008, the combination of it not making much progress to the upside (with all the news we’ve been told would drive it higher) and the fact mining shares have been crushed, makes one feel gold has performed as bad as the Talking Heads on CNBC claim. Perhaps the most frustrating aspect has been the tremendous physical demand for gold while the paper market can’t get out of its own way.

It’s become fashionable for some to make fun (every day) of a small camp that has pounded the table about manipulation in the gold market. The track records of those who say nay to manipulation leave much to be desired. John Crudele, a writer for the NY Post, has a tremendous record of being ahead of the crowd when it comes to uncovering the truth and seeing where things are really heading. He wrote a great column about one of the regular smears CNBC does to anyone who dare claim markets are not fair and honest.

$700 continues to be the bottom in my book and despite seemingly the whole world against gold, I think it’s only a question of when, not if, we go to new all-time highs.

Interesting Reading

U.S. Dollar - I truly believe the Talking Heads can’t read charts. All I keep hearing is how great the U.S. Dollar is doing. It’s right where it was in October. If that’s progress, I can’t wait for a decline. I continue to believe shorting the U.S. dollar is a worthy speculation.  Link

Oil - As anticipated, oil broke down under $50 and fell sharply towards $40. As you can see, $40 has once been key resistance but has been key support on more than one occasion since then. If the economy didn’t appear to be accelerating to the downside worldwide, I buy first thing Monday morning. My thinking is this; Risk is $10 or so to the downside. If we went that low new exploration or increased development of existing projects would grind to a halt, which would give way to a bottom. Upside over the next 3-5 years is $100. Long time readers know over the last few years I said the “Peak Oil” theory was right, but it was not going to take hold until the next economic cycle. I feel more certain about that now than ever before. So, I’m going to see how we trade day to day hour to hour and will send out an alert if and when I feel it’s time to take the plunge.

Interesting Read

Mining and Exploration Shares - “An expert is a man who has made all the mistakes which can be made, in a narrow field.” Niels Henrik

That’s me when it comes to this industry in 2008. While I avoided base metals for almost two years, I fell on my face in the juniors. I have no excuses other than the boat I’m in is overcrowded. What I’m concern about is talk within the boat of throwing me overboard.

Little or nothing should happen here until the New Year. One piece of great news was Northern Dynasty’s resource update. It was fantastic. If there’s ever a metals market again in our lifetime, NDM should greatly prosper (where did we hear that before?).

The one mining and exploration stock I would buy today

November 21st, 2008

Northern Dynasty continues to be my favorite mining stock to own. I now own the largest ever personal position in it. Below is the text from a report issued by Raymond James regarding the drill results announced yesterday. I truly believe their target price of $13 would be where it would be trading now if not for the crash in the stock market. Those with a one year+ timeframe have an excellent chance of seeing that target hit IMHO.

 

While I’m not engaged by NDM I do work for other companies that share the same management of NDM

 

It trades on the Amex symbol NAK and the Toronto stock Exchange under NDM

 

___________________________________________________________________

 

Subject: MEYER: Northern Dynasty (STRONG BUY) Pebble Drill Results; Progress in the Real World

 

Northern Dynasty Minerals Ltd. NDM-TSX | NAK-AMEX

 

RATING                        STRONG BUY 1                       

Target Price (6-12 mths) (C$) 13.00

Closing Price (C$)            2.51 

Total Return to Target        418%

 

Event

Northern Dynasty released positive results from a combination of step-out and infill drill holes on the Pebble East deposit before market open yesterday.

Action

We recommend buying Northern Dynasty shares. In our opinion, Pebble is a world class Cu-Au-Mo project, backed by a financially strong partner.

Analysis

- In our view, the drill results show good grade continuity and indicate the deposit’s potential for resource expansion. There are currently six drill rigs on site. The main objective of the 2008 drill program is to upgrade a large portion of the Pebble East deposit to the Indicated category from the Inferred category. The data is required in order to complete a new resource estimate before year-end and to finalize a pre-feasibility study in the second-half of 2009.

- Highlights from the 18 drill holes assayed: hole 8405 intersected 2,460 feet grading 1.20%CuEq (0.78% Cu, 0.25 g/t Au, 0.046% Mo); hole 8410 intersected 1,525 feet grading 1.21%CuEq (0.80% Cu, 0.44 g/t Au, and 0.023% Mo); hole 8412 intersected 1,301 feet grading 1.76%/CuEq (1.11% Cu, 0.69 g/t Au, and 0.038% Mo); hole 8413 intersected 2,469 feet grading 1.15%CuEq (0.80% Cu, 0.20 g/t Au, and 0.040% Mo); hole 8414 intersected 1,224 feet grading 1.27%CuEq (0.60% Cu, 0.80 g/t Au, and 0.027% Mo); hole 8515 intersected 2009 feet grading 1.15%CuEq (0.64% Cu,

0.54 g/t Au and 0.029% Mo).

- According to management, the Pebble project team is on track to finalize a pre-feasibility study in the latter half of 2009 and commence project permitting in early 2010.

Valuation

Northern Dynasty shares trade at a P/NAV of 0.08 times versus its peer group at 0.19 times. Our target price is derived from a risk and liquidity adjusted historic P/NAV multiple of 0.40x.

 

Tom Meyer, P. Eng., CFA

Base Metals & Mining Analyst

Raymond James Ltd.

Scotia Plaza - Suite 5300

40 King St. West, P.O. Box 415

Toronto, Ontario M5H 3Y2

Phone: 416 777 4912

Fax: 416 777 4933

tom.meyer@raymondjames.ca

What’s Up?

November 3rd, 2008

I’m back from beautiful but raining Vancouver. Was delighted to meet many readers at the conference.

Just some quick thoughts on the markets.

U.S. Stock Market - The election tomorrow is likely to be the main story for awhile going forward. Meanwhile, absolutely horrible economic numbers continue to pour out. This is no ordinary recession so talk that the market has already discounted it is IMHO wrong. We haven’t even begun to see unemployment pick up steam. Consumers will only be more afraid to spend as both their neighbors and themselves lose their jobs (It’s a recession when your neighbor losses their job and a depression when you do). The market is working off the worse oversold condition in years-nothing more. Hold your powder for the eventual re-test of the October lows.

Metals- The recession worldwide seems to be picking up steam so holding off any committments to base metals is suggested. I’m concern about gold for the short-term. Once again overseas was much higher only to see it sold off once the Comex opened. The shorts seem to be gunning for under $700. I think the best thing to do right now is sit and buy gold only on strength above $775.

U.S. Dollar - It can still pop to 90-91 on the U.S. Dollar Index but I believe you sell strength. It’s not a question of if but when the Loonie is worth more than the dollar again.

Oil - It looks like it wants to go into the $50s. Only an early below average tempature winter or trouble in the Middle East appears to be what could stop such a decline.

Mining and Exploration Shares - Heavy selling appears to have abated but I don’t think we’ve seen the bulk of public tax selling yet. I think Northern Dynasty is in play. Stay tuned (I own shares of NDM).

My Interview on BNN “Market Call Tonight”.

October 24th, 2008

For those of you that missed my Friday night BNN interview, or for my American friends that don’t catch BNN, please find enclosed a link to my BNN Interview.

This is a two-part interview.  Wait for the video to go to second part when part one is finished.

Northern Dynasty Minerals Update

September 15th, 2008

If I don’t comment on Northern Dynasty people will write and call!

I think the recent referendum should put shareholders and interested parties at ease. I think it’s a compelling buy and I have bought shares this past week.  Click the link below for a good presentation on NDM. Scroll down to 11:20 mark.
http://events.onlinebroadcasting.com/denvergold/090808/index.php?mode=1&sel_date=1