FNI and BWR- Todays Canacord Cap.Breakwater Resources* (BWR : TSX : $2.09), Net Change: 0.14, % Change: 7.18%, Volume: 17,411,914
From the Cheap Seats: Canaccord Adams Base Metals & Minerals Analyst Orest Wowkodaw says Breakwater remains the
most undervalued equity in his coverage universe. Breakwater reported a better than expected Q4 results last week, largely due
to higher zinc deliveries, which more than offset higher operating costs. Zinc production is anticipated to rise by an impressive
30% in 2007 and look a further 15% increase in 2008. The company’s operational turnaround continues on schedule, with
Q2/06 representing trough production. Given Breakwater’s impressive forecast net cash build, we believe a capital return
program is likely to be announced within the next 12 months. While the company does not currently pay a dividend, in our
view, a share buy-back would create the most value for shareholders, particularly given the company’s relatively large valuation
discount to its peers and the high level of shares outstanding.
First Nickel* (FNI : TSX : $1.08), Net Change: 0.13, % Change: 13.68%, Volume: 7,451,607
In 1940, Sudbury became the first city in Canada to install parking meters. Who says the Coffee doesn’t teach you nothing?
Drill results continue to indicate that First Nickel has made a significant discovery at its Lockerby Mine property in the Sudbury
basin. Highlights of the latest round of drill results into the Lockerby Depth zone included an intersection of 2.35% nickel and
1.22% copper over 69.60 metres, building on a previous result of 3.15% nickel and 1.73% copper over 34 metres, announced in
January. The company indicated that these latest results, which will not be included in the upcoming resource estimate, confirm
the continuity of this zone, which remains open to depth and along its flanks. In January, the Lockerby mine produced 394,000
pounds of nickel and 230,000 pounds of copper. With head grades coming in higher than expected due to the inclusion of ore
from development mining, and base metal prices continuing to rally it would appear that the company is likely to report positive
financial results for the quarter. For the full year, First Nickel has forecast production of 4.7 million pounds of nickel, 3.2
million pounds of copper and 86,000 pounds of cobalt.