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 Mon Feb 21, 2000
Excerpt from Bottom-Fish Action for week of Feb 7-11, 2000
    Publisher: Kaiser Research Online
    Author: Copyright 2000 John A Kaiser

 Excerpt from Bottom-Fish Action for week of Feb 7-11, 2000

Ascot Resources Ltd (AOT-V) and Major General Resources Ltd (MGJ-V) announced on February 10 that De Beers had dropped its option on the Victoria Island project after investing $1,315,000. To vest for 51% Monopros would have had to spend another $735,000 and pay $150,000 by February 2001. Last September De Beers reported micro diamond results results for the Snowy Owl pipe that looked good in terms of abundance but had a poor size distribution curve compared to those of Winspear's Snap Lake dyke and Mountain Province's Kennady Lake pipes. In Tracker 99-031 issued on September 7 I warned that Snowy Owl so far looked like a dud, and because it was the best of the half dozen pipes found on Victoria Island, the diamond play was still at square one in the discovery cycle. This really upset Major General's flyshop salesman, who faxed me a note on Major General letterhead declaring that any moron should have guessed from De Beers' lead that Alberta was hopeless, and then ran around Vancouver promoting Major General by buttonholing people to tell them how incredibly ignorant Kaiser was about diamond exploration. Shortly afterwards he jumped ship to a B2B Internet play, and was last spotted buttonholing people to tell them that he had made a million bucks. And not even a thank you from the ungrateful wretch! Meanwhile, Major General and Ascot are still awaiting receipt of the final data so that they can decide what to do next. Late last summer Chuck Fipke's Dia Met Minerals optioned surrounding ground and collected indicator mineral samples that are still being processed. In early 1998 Major General had struck a deal to earn back 25% of Ascot's 75% stake in Victoria Island for $1 million exploration. Major General subsequently attracted the interest of De Beers, and Ascot consented to a sub-option deal that allowed Major General to count any De Beers expenditures toward its own exploration commitment. As a result Major General and Ascot now each own 50% of the core Victoria Island claims. Ascot has indicated that it is not interested in funding further work and has left the project's future course in Major General's lap. The most likely development will be that Dia Met consolidates its Victoria Island land position by optioning the core claims. The window to drill lake targets on Victoria Island is from April through May, so there is still a chance that Victoria Island may see some drilling this spring. Given the weakness of Major General's position, it should be possible for Dia Met to acquire an interest on easy terms. If after reviewing its indicator mineral samples and the De Beers data Dia Met declines to conduct further work on Victoria Island, it will be the kiss of death for this play. Ascot was halted on February 17 pending an announcement after the stock bumped up slightly. As of this writing I had not heard any news, but earlier indications I had received from management were that Ascot would stay focused on North and South America with gold as a priority. Another John Toffan junior, Leicester Diamond Mines Ltd (LCD-V: $0.18), also popped out of the gutter in early February as momentum traders speculated that it was destined for a technology deal. Last year Leicester checked out a high grade PGM play in the Shetland Islands that did not pan out. It would make sense for Leicester to acquire another PGM play. The John Toffan/Ken Carter team shares office space with part of Ron Netolitzky's team, whose PGM vehicle is Santoy Resources Ltd (SAN-V: $0.35). The insider network owns almost every share in this junior, and could walk the stock to a buck if they felt this might accomplish anything. At the moment Netolitzky's team is scratching its heads over why the market prefers a sloppy stock with 30 million shares out like Larry Nagy's Oliver Gold Corp (OGO-V: $0.40), which recently replenished its treasury with about $5 million from the sale of its Segala gold deposit in Mali to SEMAFO. So far Oliver Gold has not announced it is committed to the resource sector, which means the stock still has upside potential until CDNX becomes suspicious that a change of business is in the works. At this point Oliver Gold no longer qualifies as a bottom-fish, but for the breakout traders the stock still has room to run on the upside. In this type of crazy market bottom-fishers with small accounts can do very well buying stocks like Santoy which have tiny floats. I have mentioned Santoy in a previous BFA as a good bottom-fish, and I repeat, if you see any paper offered below $0.30, grab it and tuck it away.


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