Pescod today :)))))) TAKEOVR TALKAMAZON MINING (V-AMZ) $2.57 +0.37
GREAT QUEST METALS (V-GQ) $1.40 +0.09
POTASH CORP. SASK. (T-POT) $117.23 +1.22
It’s a little bit ugly out there, but then I suspect anyone
watching the market these days knows that. Still, we’ve been
more than a little surprised that the vicious hits that have happened
to some of our favorite stories—Ithaca Energy (IAE)
comes to mind—if we would have ever thought a $3.00 stock
could have seen numbers like this…But there has been some
hurt on the big markets, but still, the reaction of some of the
juniors that are more sensitive to good or bad markets, has
truly been of a surprise.
I suspect everyone is aware of the $2 Trillion or so sitting
on the sidelines, waiting for some sense of confidence to
come back in the markets, but as more and more talk about
the potential for a double-dip recession, the greater the tendency
to sit on that cash.
Not everything was red today as one of the stories we have
found the most intriguing over the year has done quite well
over the past few weeks. Someday Amazon Mining might well
become a movie, although I don’t know who would play the
lead female role. It’s a combination of intriguing people.
Doing a lot of the public relations and running around for the
company has been Jed Richardson, a former mining analyst
with well-known Sprott Securities and he certainly has been
interesting as from time to time he has picked the odd stock
for us.
The last stock he picked for us was Great Quest Metals. How
did he find that story? Well, he was simply doing analysis on
Amazon and how it might represent value compared to other
potential plays out there and realized that Great Quest with
their phosphate projects in Mali, offered great potential. We
had written that story up a couple of times, but now the stock
(with a big move today) is a three-bagger in an ugly market.
Great Quest just announced the addition to its board of Ehud
Levy, a phosphate’s manufacturing industry consultant which
gives tiny GQ evermore credibility.
Peter Gundy is the Chairman of Amazon and has an interesting
history in mining circles. He played a role in the founding
of the original company that became Potash Corp of Saskatchewan.
In the last decade or so, he has also played a significant
role in founding a rare earth company based in China
called Neo-Metals. Gundy, along with his wife is also the
owner of “George” one of the better restaurants in the Toronto
area.
Amazon Mining
Great Quest Metals
David Pescod T: 780.408.1750 Debbie Lewis T: 780.408.1748 Fax: 780.408.1501 Page 2
We caught up with Gundy today because Richardson is
more than a little busy the last week or so, going from spot
to spot in Brazil and you get the feeling that some things are
happening down there.
Again, we must mention to folks that when we made our
trip to Brazil a year ago, it was an eye-opener. The place
was booming, roads were packed, cities are growing quickly
and we visited a city of 5 million people and we had never
even heard of it before. They changed the zoning law and
within two years more than 35 skyscrapers are up. Like I
said, it’s booming! And 35% of the industry in Brazil is agriculture...
from sugarcane, to coffee, to eucalyptus, to youname-
it. This country is going to feed the world. Forget
about some of these doom-sayers suggesting otherwise.
What Brazil lacks is fertilizer. Most of their potash and
different components—up to 93% of which has to be imported
and the Brazilians aren’t too keen on that.
We did catch up with Peter Gundy today and he suggested,
“we have nothing to say until we have something to
announce” and he suggested they hope to be able to make
a series of updates on information by the end of September.
One look at the chart of Amazon shows that it has had its
stock swacked earlier this year when most stocks were going
the other way.
What could be going on, we ask a few observers of the
company? And there are all sorts of suggestions such as
maybe they are coming up with a method of blending their
glauconite with more traditional sources of fertilizer for their
project, or maybe the guys in white coats and labs have
come up with something totally new. Or as some suggest,
rather hopefully we suspect, with only 30 million shares
outstanding in Amazon, it might well be a take over candidate
if they are coming up with the goods.
Certainly the results on their glauconite report of a week
or so ago was hopeful reading for any Amazon shareholder.
Meanwhile, having caught up with Gundy, we get his take
on what next for the markets. He suggests we are in tough
times and that we “won’t get out of this easily”. He points
to the markets where there’s lots of volatility and not a lot of
volume. And he bluntly states, “it’s going to be a long climb
back to normal times.”
On the markets, he goes further, suggesting that “I simply
don’t speak to a lot of people that are bullish on the market
at this time” and many people he suggests are wondering
if there is a precipice coming. We also suspect we could
have a couple of years that weren’t as generous as we’ve
seen in the past and note that we are going into September
shortly, which is statistically the worst month of the
year...once again, though and it’s ironic...Gundy suspects
that Amazon will be announcing potentially a series of announcements
near the end of the September.
Disclosure: Potash Corp. of Saskatchewan: Canaccord Genuity covers this stock and has a Buy rating on it. (Buy: The stock is expected
to generate risk-adjusted returns of over 10% during the next 12 months.) Ithaca Energy: Canaccord Genuity has not rated this stock. It is
currently Under Review.
DEB’S DITTY:
Money does