eResearch

eResearch Blog: Natural Gas

2008-02-19T13:35:00.003-05:00

Opportunities in Natural Gas Stocks

We have featured natural gas as our Topic in two recent issues of our newsletter, the Clarion. Contact me directly at bweir@eresearch.ca and I will send you those commentaries. For other information on our website, go to: www.eresearch.ca

We believe that the price of natural gas, Henry Hub, could reach US$10.00/mmbtu during the current heating season. Since the beginning of February, the spot price has risen from US$7.89/mmbtu to the current US$8.73/mmbtu.

"Gassy" stocks have been rising lately. Perhaps the bellweather is Encana Corp.

Check out the new Canadian ETF: Claymore Natural Gas Commodity E, and quoted on the TSX, symbol "GAS". This ETF spiked almost 7% today and most certainly will head higher if our $10 scenario proves correct.

Bob Weir, B.Sc., B.Comm., CFA
Director of Research

All eResearch reports are now FREE on our website.

eResearch Blog: Is It Over?

2008-01-23T08:34:00.000-05:00

"It ain't over 'till it's over."

We expect the markets will continue their volatility. So beware and be aware.

Both Canada and the U.S. central bankers lowered interest rates yesterday, Canada 25 bp, and the U.S. a record 75 bp. Falling interest rates are traditionally good for stock markets, given that the advantage of higher returns on debt relative to equities is narrowed.

However, just because world stock markets rallied yesterday, other than the U.S. which is out-of-step because of the Monday holiday, we don't think the good times are back just yet. But it is a time to up-grade your portfolio.

We mentioned yesterday that many bear markets end with a one-day crash on big volume. After a sharp, but short, recovery, markets either tend to go back and revisit the panic lows or they bounce along within a rather narrow upward-sloping range over an extended time.

We hold to our advice yesterday to seek wrung-out, significantly over-sold quality stocks of companies with demonstrated management acumen.

Now is the opportunity to sell your losers and add to your winners. You have time.

FREE research reports at www.eresearch.ca

Bob Weir, B.Sc., B.Comm., CFA
Director of Research

eResearch Blog: Bargain-Hunting

2008-01-22T08:35:00.000-05:00

Bargain-Hunting Amongst the Panic

Stock markets around the world sold off sharply on Monday, January 21, 2008. The U.S. markets didn't; they were closed. Asian and European markets continued the rout on Tuesday. The U.S. markets, when they open, are expected to play catch-up.

Folks, this is world-wide investor panic and a much-needed criterion to end this rather short, but sharp, bear market and set the stage for a recovery which, most likely, will be slow. That certainly is the historic pattern.

A bear market is generally defined as a drop of 20% from the high. Most markets around the world are currently in the 15%-18% range, although Tokyo is down 27%.

The fear is the probability of a U.S. recession. At first, with global markets showing strength, it was thought that the BRIC countries and the strong Asian economies could pick up any U.S. slack. Now the fear is that China and others will also falter. Certainly the Chinese stock market is wildly over-heated.

When we all look back in a few months time, we will recognize that there were some outstanding bargains available in a plethora of blue-chip stocks that had not traded at those seemedly down-and-out levels in quite some time.

It will be the astute investor who ditched his speculative stocks, now substantial losers, and traded up to quality. Those will be the stocks that will come back first. It always works out that way.

All eResearch reports are available FREE at www.eresearch.ca.

Bob Weir, CFA
Director of Research

eResearch Blog: Gold

2008-01-16T13:52:00.000-05:00

Whither Gold

We wrote in our latest Clarion that we considered this to be a good time to sell the senior gold stocks. They continued to go up on Monday, but they fell in lock-step with the whole market on Tuesday and are down again today.

We are looking for gold to trade in the $830-$890 range over the next few months. But its inexorable march to $1,000 is inevitable.

Bob Weir, CFA
Director of Research
FREE research reports on www.eresearch.ca

eResearch Blog: Market Opportunity

2008-01-16T13:40:00.000-05:00

Heads Up

Carnage like that which occurred on the markets yesterday usually provide great buying opportunities. Many very good stocks with solid credentials got hammered. There was nothing different about those companies from the time of the close on Monday night to the opening bell on Tuesday. But investor sentiment was particularly negative and everything suffered.

Don't catch the falling knife! But do investigate opportunities to benefit from buying those stocks that have been way over-sold solely because of a total market sell-off.

Bob Weir, CFA
Director of Research
FREE research reports at www.eresearch.ca

eResearch Blog: Musings

2008-01-14T08:29:00.000-05:00

Near the Bottom?

Yes Camp:
(1) The FED is likely to lower interest rates, an action that is always good for stocks.
(2) Market indexes are down substantially and are now near former turn-around points.
(3) There are a lot of stocks badly beaten up, financial and retail particularly.
(4) Bond yields are low, which makes equities more attractive.
(5) Bank of America is going to bail out Countrywide Financial.(I am not sure I get this: B of A is going to pay about $4 billion in stock to buy a company that was about to declare bankruptcy!)

No Camp:
(1) The housing sector woes are not over.
(2) The sub-prime mess still exists.
(3) The U.S. consumer, the driver of the economy, is suspect.
(4) Retail sales have fallen off a cliff.
(5) Unemployment is rising.
(6) A U.S. recession is inevitable.

My Opinion:
(1) I'm am a realist, leaning on the side of optimism. I think stocks are going up.
(2) Buy solid companies, now, that have a demonstrated history of strong earnings performance and management excellence.
(3) If there is a recession, I think it will be shallow and brief. Like the last one.

Bob Weir, CFA
Director of Research
Our research is FREE: go to www.eresearch.ca

2008-01-11T07:47:00.000-05:00

Gold

We have been bullish on gold and gold stocks since we first recommended the sector in our Weekly Newsletter on October 31, 2005. At the time, when gold was trading at $471.50/oz., we said, "The above factors all point to substantial increases in gold prices in the near term. In fact, since many of the factors will be difficult to reverse, gold prices are expected to remain high and, indeed, move upward for some time to come. In this context, forecasts of gold prices exceeding $800 an ounce by the end of this decade, or even sooner, do not appear unreasonable."

Well, exactly two years later, gold pushed through $800 in late October 2007 and, today, is pushing $900. Psychologically, round numbers are often emotional resistance levels.

Thus, given the very rapid run-up in the price of gold since mid-December, we would not be surprised if there is continued resistance at the $900 pivotal point.

Gold stocks do not usually move in lock-step with the gold price. They are normally laggards.

In the market, recently, the senior gold stocks have been on a tear, while the juniors have not moved up nearly as much.

It might be prudent to take some profit now on these senior gold stocks. With the jewellery season now behind us, there may be some shine come off the lustre for the sector. Thus, we are looking for gold to consolidate in the $830-$890 range for the next few months. If so, the senior gold stocks will likely be moribund.

However, if gold convincingly breaks through $900, all bets are off.

For FREE access to our research material, go to www.eresearch.ca.

Bob Weir, CFA
Director of Research

eResearch Blog: Inca Pacific Resources

2008-01-10T13:04:00.000-05:00

One Milestone Reached

The recently-released Final Feasibility Study confirmed the technical and economic viability of Inca Pacific Resources’ 100%-owned Magistral copper-molybdenum project in Peru. This is a vital step forward, but giant strides still need to be taken.

In our opinion, the shares of Inca Pacific Resources represent an interesting speculation based on the Company: (1) obtaining a “Bankable” Feasibility Study; (2) achieving a successful debt-equity capital raise totaling about US$400 million to bring the project into production; and (3) continuing to be an attractive acquisition candidate, which increases as each of the foregoing milestones is achieved.

We are maintaining our Recommendation of Speculative Buy for the shares of Inca Pacific Resources Inc. as set out in our Initiating Report of November 9, 2007. Our one-year and four-year price objectives are unchanged at $3.40 and $9.65 respectively.

To read this report and/or that of November 9, go to www.eresearch.ca

Bob Weir, B.SC., B.Comm., CFA
Director of Research

eResearch Blog: Foreclosure

2008-01-09T11:55:00.000-05:00

U.S. Home Foreclosures

One of the fall-out problems of the massive U.S. sub-prime mess, is the burgeoning number of home-owners who are unable to refinance expiring mortgages or who are unable to continue with existing mortgage payments. For many, this simply means walking away from their homes. The mortgage companies seek foreclosure.

In this time of high home foreclosure rates, the growing sector of foreclosure-rescue companies is rife with scam artists.

Foreclosure-rescue scams usually revolve around heavily promoted deals supposedly designed to save the homes of people who have fallen behind on their mortgage payments and are facing foreclosure. The scam artists proclaim to "save your home" or "pay your mortgage" but, in reality, they only generate a quick profit for themselves, while possibly stripping away the value of the home with no benefit to the owner.

Bob Weir
Director of Research
www.eresearch.ca

eResearch Blog: Weekly Topic

2008-01-08T10:23:00.000-05:00

Boys and Their Toys

Monday, January 7, 2008 is the first day of the gargantuan Consumer Electronics Show in Las Vegas. Technology companies from around the world are gathering to present their latest gizmos and gadgets to an anticipated 140,000 attendees.

The C.E.S. was inaugurated in 1967 and has been the venue for introducing, what would become, many of the world’s most successful technological products, including the VCR in 1970, the compact disc player in 1981, and the DVD in 1996.

Because of its monstrous size, the C.E.S. has not always been the most advantageous place to unveil new products. Looking for a specific exhibitor in this year’s 1.85 million square feet of exhibition space would be somewhat daunting.

Nevertheless, the annual C.E.S. is still unequaled in the number of new product introductions. This year, there will no doubt be a plethora of HD-TVs, entertainment set-top boxes, electronic toys, robots, and new internet services. Most we may never see again. However, there could be some winners that become a huge consumer hit.

By and large, many of the products on display will be primarily enhancements or technological improvements to existing products rather than eye-popping break-throughs.

The Show also provides an opportunity for keynote speakers either to pontificate on their vision(s) or introduce their firm’s new product(s).

All in all, the C.E.S. generates considerable buzz and excitement. Let’s hope this year’s gathering proves fruitful.

Bob Weir, B.Sc., B.Comm., CFA
Director of Research
www.eresearch.ca

eResearch Blog: Purepoint Uranium Group

2008-01-08T10:21:00.000-05:00

Stock of the Week: PUREPOINT URANIUM GROUP (TSX-V: PTU)

Selling at Only 1.3X Book!

Price (January 4, 2008):
$0.46

Update Report Price:
$0.41 (December 12, 2007)

Update Report Target Price:
$1.05 (1 year)
$2.10 (3 years)

High-Low since Update Report:
$0.51 - $0.35

On December 12, 2007, eResearch issued an Update Report on Purepoint Uranium with a one-year Target Price of $1.05. At the time, the stock was trading at $0.41. Since then, it reached a high of $0.51 and currently is trading near that level.
Purepoint is a Canadian exploration and development company, focused on uranium exploration in the world-class Athabasca Basin in northern Saskatchewan, where it has a large land position.

In addition to 7 of its own properties in the Basin, Purepoint has entered into strategic relationships with major uranium miners, Cameco and AREVA, for 2 additional Basin projects. Purepoint has the right to acquire up to a 50% interest in both of these projects and also act as operator.

The Company recently announced that drill results at its Red Willow property in the Athabasca Basin showed highly positive returns. In a comparative analysis conducted at the Saskatchewan Energy and Resources’ Precambrian Geological Laboratory, drill core from the Red Willow project compared closely to Cameco’s prolific Eagle Point uranium deposit, located about 15 km to the south. The Red Willow project, if it firms up, is in good company. Eagle Point is Canada’s longest producing uranium mine, with 133 million pounds of mined and proven resources. In addition, to reinforce this strategic location further, the Red Willow project adjoins the AREVA Resource’s claim group that contains the JEB, Sue, McLean, and Caribou deposits to the west, and UEX’s Hidden Bay project that surrounds Cameco’s Rabbit Lake, Collins Bay, and Eagle Point deposits to the south.

As we stated in our Update Report: “How could a junior mining company, having strategically-located properties and partners that are major mining companies, have a stock price that only trades at or near book value?”

We believe the shares of Purepoint Uranium Group are substantially undervalued. Once investor interest returns to the uranium sector, as well it must, Purepoint’s stock should participate in the anticipated recovery.

eResearch Blog: New Web-Site

2008-01-08T10:09:00.000-05:00

New eResearch Web-Site and Logo

eResearch is pleased to present its new web-site and a new format for the Clarion, our weekly newsletter. Check out our new site: www.eresearch.ca

Henceforth, all research reports on our web-site will be FREE for reading and downloading. You will have to register anew in order to gain access. We are asking everyone to fill in certain fields, but there are NO personal identifiers. We are collecting certain user information in order to gain a better perspective on investors who use our services. This will be valuable not only to eResearch but also to our Covered Companies who we hope will advertise on our web-site.

We value your thoughts and opinions on our new Clarion format and our web-site. You can communicate with me directly if you wish. E-mail: bweir@eresearch.ca

All of us at eResearch wish all of our readers a Happy, Healthy, and Prosperous 2008.

eResearch Blog: Wescan Goldfields Inc.

2007-11-05T14:33:00.000-05:00

Gold and uranium!

eResearch has initiated coverage of Wescan Goldfields Inc. (TSX-V: WGF) with a "Speculative Buy" Recommendation. Our 12-month Target Price is $0.60 per share, compared to the current share price of $0.34. Our long term Target Price (3 years) is $1.75.

Wescan is a junior mineral exploration company, focused on gold, uranium and base metals in Saskatchewan and Ontario. The Company has an active drilling program underway at several properties with results expected soon. It has an option agreement to earn a 50% interest in the promising Mud Lake Project. Further acquisitions are likely, including active pursuit of opportunities in Mexico.

Wescan also gains significant synergies from its relationship with successful sister company Shore Gold Inc.

Challenges include Wescan's relatively low profile in the market, and access to human resources and drill rigs.

This and other reports are available on our website at www.eResearch.ca.

Bob Weir
Director of Research

eResearch Blog: Market Information

2007-11-05T13:42:00.000-05:00

Company Reporting

In each of Canada and the United States, securities regulators have set up a national web-site that compiles and presents corporate news releases, including quarterly and annual reports, annual information forms, management information circulars, material change reports, notice of meetings and material change reports.

In Canada, the web-site is known as SEDAR; in the United States, it is EDGAR.

These filings are required by securities law. As such, they can be a valuable source of information for the investor. News dissemination services and corporate web-sites are also useful places to find information.

Analyst reports are an alternative source of corporate disclosure. In efforts to gain more market exposure, companies will use any one, or all, of research analysts, investor relations firms, stock promoters, and brokerage account executives.

Stockbrokers and research analysts are regulated by securities regulators and professional associations. In research reports, a distinction must be made between information provided by the company and opinions expressed by the analyst. Sound rational for recommendations, conclusions, opinions, and target prices are required to be disclosed in research reports.

In the mining industry, companies are required to have a Qualified Person vet all information provided to shareholders and SEDAR.

The mining company’s disclosure obligations include: how it conducts its exploration program; the presentation of technical information such as on the drilling program and assay results; the placing of pertinent information on SEDAR; and the issuance of a public press release.

Technical Reports regarding exploration activities are required to include: results of all surveys; details of exploration information and plans for future work; description of the geology, mineral occurrence, and nature of the mineralization found; mineral distribution and rock types used to establish sampling criteria; and true width of the assays, where known, amongst other criteria.

To truly understand all of the technical jargon and information provided by mining companies takes a P.Geo. accreditation. Much easier is to gain access to timely, insightful, comprehensive, and thoughtful research.

We at eResearch have built a powerful and deserved reputation for the quality, scope, and insight of our mining research reports. Visit us at our web-site, www.eresearch.ca and get the eResearch Advantage.

Bob Weir
Director of Research

eResearch Blog: Online Brokers

2007-11-05T13:38:00.000-05:00

Online Broker Survey

Toronto’s The Globe and Mail recently released its latest survey of Canada’s on-line brokerage services. Qtrade Investor (qtrade.ca) came in first for the second year in a row.

eResearch is pleased to see that, of the top five rated online brokerage firms, two of them, E*TRADE Canada and Credential Direct, feature our research directly on their web-sites. In addition, subscribers to one of the others, BMO InvestorLine, has access to research from eResearch via BayStreet.ca.

According to The Globe and Mail, investors rate costs and fees as being the most important criterion when choosing an online broker. Tools and research were also key factors.

Many of the major online brokerage firms are now advertising commission rates of $9.99 a trade provided the customer has at least $100,000 in assets with the firm. E*TRADE Canada only requires $50,000.

If you have an online brokerage account and are looking to supplement your access to equity research, check out eResearch. We have built a powerful and deserved reputation for the quality, scope, and insight of our research reports. Visit us at our web-site, www.eresearch.ca and get the eResearch Advantage.

Bob Weir
Director of Research

eResearch Blog: Natural Gas: Time to Buy?

2007-11-05T13:10:00.000-05:00

Natural Gas: In the Doldrums Presents a Fabulous Buying Opportunity

The price of crude oil reached a new all-time high last week: US$95.93 per barrel. Natural gas continues to remain depressed, with the Henry Hub at US$6.63 per MMBtu.

The depressed natural gas price is attributed to moderate temperatures particularly in the eastern part of North America, the end of the 2007 hurricane season with little damage, and ample supplies of natural gas in storage. Current storage is about 3,500 Bcf, which is about 11% above the 2002-2006 five-year average.

According to the U.S. agency, Energy Information Administration, Office of Oil & Gas, this coming winter will be colder than last year, and should lead to the average U.S. household paying about 10% more for natural gas (6% price increase and 3% consumption increase).

The EIA predicts that, with the coming of the winter season, natural gas prices will rise by January 2008 to about US$8.40 per MMBtu. That is almost 30% higher than the current price.

Natural gas prices are probably more related to weather factors than most commodities. Since weather is highly unpredictable, price swings usually tend to be overdone, both on the upside and the downside. There is a similar effect on natural gas equities. This provides the astute investor with exceptional risk/reward opportunities.

Compared to the price of crude oil, natural gas appears undervalued, and has been for quite some time. The general rule-of-thumb is that the price correlation between the two should be 10-to-1. The current ratio is US$95.93 to US$6.63, or 14-to-1. Thus, either crude oil is over-priced, or natural gas is under-priced, or some combination of both.

We believe the “play” is in natural gas.

Canada’s National Energy Board, however, in a recent report predicted that natural gas output in Canada will decline up to 15% by 2009 due to low expected natural gas prices and continuing high finding, development, and operating costs. True, many Canadian natural gas operators cut back their drilling activities in 2006-2007, and primarily due to the low price environment. However, it is our opinion that, as the price of crude oil goes ever higher, as predicted in numerous places, it will drag the price of natural gas higher with it. Let’s face it, the price of natural gas currently is trading well below its long-term replacement cost. But demand continues fairly steady, at about 2% per year. The tremendous deep-water drilling activity that has been going on in the Gulf of Mexico for the past 3-4 years is about to be realized in terms of increased supply infrastructure.

The Conference Board of Canada predicts that natural gas prices will rise about 6% per year. This forecast is based on a number of factors: (1) low production from new gas wells; (2) depletion from older wells; (3) new electricity generation is usually gas-fired; (4) supply is flat, and demand is rising; and (5) general economic growth increases overall energy consumption. On the negative side, large increases in the supply of liquefied natural gas could disrupt an increase in the natural gas price, but increased LNG supplies seem to be some way off yet.

In all, we think that high-quality natural gas companies offer investors an exceptional opportunity at the present time. Always buy ‘em when nobody else wants ‘em.

Please visit us at "www.eresearch.ca"

Bob Weir
Director of Research

eResearch Blog: Augusta Resource Corporation

2007-09-05T12:24:00.000-04:00

Recommendation and Target Price Put "Under Review"

Augusta Resource Corporation has been served with a complaint in the U.S. Bankruptcy Court. The Company also released its bankable feasibility study on its Rosemont copper property.

For more information on these issues, see the Analyst Commentary on Augusta Resource Corporation by analysts Amy Stephenson, MBA, CFA and Bob Weir, B.Sc., B.Comm., CFA

This Analyst Commentary and other in-depth reports are available on our website at www.eResearch.ca

eResearch Blog: Stock of the Week (September 4, 2007)

2007-09-05T12:02:00.000-04:00

Inca Pacific Resources Inc. - Positive Insider Trading

Stock Symbol: TSX-V: IPR
Price (September 4): $1.07
52-Week High-Low: $2.07 (May) - $0.80 (March)
Initiating Report Price: $0.53 (May 10/05)
Initiating Report Target Price: $1.00
Update Report Price: $0.70 (February 28/06)
Update Report Target Price: $1.00
Hi-Lo Last Three Months: $1.99 - $0.89

Inca Pacific Resources has made considerable progress since our last research report. We are now in the throes of preparing an Update Report and will have a new Target Price and fresh opinion and recommendation for consideration.

The shares were essentially range-bound from September 2006 until April 2007 when they broke out on the upside. However, the positive share price performance was not accompanied by much increase in share trading volumes. As a result, the shares stalled through most of June until they fell off a cliff at the end of the month, only to rebound strongly at the beginning of July, before declining sharply in concert with the significant decline in the market generally.

Of particular note is the recent purchase by a senior officer of the Company of more than one million shares on August 29, 2007. That day, more than 2.5 million shares were traded. The 150-day average volume for the stock is less than 60,000 shares.

Another interesting recent shareholder disclosure is the four million share holding by a major investment fund transacted on June 8, 2007.

Significant insider trading is not a sure thing as an indicator of a stock’s upside potential, but it certainly aligns management’s interests with those of shareholders, and that is always a good thing.

eResearch Blog: Volatility Part3

2007-09-05T11:59:00.000-04:00

Stock Market Volatillity

In previous blogs, we discussed the volatility of the stock markets.

We think market volatility is going to continue over the near-term. The recent wild market swings underscore the volatile scenario we commented upon earlier. Even with a cut in the fed funds rate, there are still considerable risks, including: too much debt, irresponsible ratings agencies, not enough regulation in the derivative markets, hedge funds not marking to market, and too much optimism regarding corporate profits.

Time is needed to wind down prevailing excessive credit. This will continue to make headlines and, in turn, continue to result in stock market volatility.

As we have promulgated frequently in the Clarion, we advise investors to raise their cash positions and await more favourable buying entry points. Assemble a list of companies that you would like to own and the price that you would like to buy them at, and then wait for the moment. Be realistic, otherwise you might come up empty-handed. This approach should position your portfolio well when the bull market resumes.

eResearch Blog: Get Off The Pot

2007-08-28T12:18:00.000-04:00

Analyst Article

eResearch is pleased to provide an article written by Edmond G. Eberts of RAPPORT Capital Formation Strategists Inc.

This latest treatise by Mr. Eberts discusses the actions (or inactions) of our politicians and chief executive officers.

Some of the key excerpts from the article are quoted below:

“Though colourful and passionate when standing tall on the stump, all too many members of provincial legislatures and parliament turn into little more than silly putty once in office, bouncing awkwardly from one poll to the next.”

“Few of the members (of the House of Commons) seem to have any idea as to what the real world is all about. The idea that corporate tax rates should be kept relatively low to encourage investment and job formation seems to be beyond their scope of comprehension. Nor do they appear to understand that competitive capital gain and dividend tax rates would spur investors to assume more risk, critical to financing the wealth begetters of the future, those able to make large donations to worthy causes.”

“Whereas all-star hockey players learn to cope with competition, many of our senior corporate executives are scared stiff to go into a corner and fight for the puck preferring, instead, to pass it to someone else and head for the bench.”

“Instead of applying the brakes to change, governments should do whatever they possibly can to encourage corporations to get with it, by upgrading the effi ciency of their facilities and looking afield to expand. Otherwise, they stand little chance of remaining competitive, subject to being acquired at what, in the end, will prove to be a bargain price by those willing to do what needs to be done to grow and prosper.”

“If our politicians hope to get re-elected and CEOs be acclaimed, they must pull up their socks.”

Mr. Eberts is interesting to read, thought-provoking, challenging, and always entertaining.

We hope you enjoy the article.

To access the article, click on http://www.eresearch.ca/_report/GetOffThePot_082807.pdf

To access eResearch: www.eresearch.ca

eResearch Blog: Stock of the Week (August 27, 2007)

2007-08-27T15:46:00.000-04:00

Colombia Goldfields Ltd. (TSX: GOL; and OTCBB: CGDF)

New TSX Listing

TSX Price (August 27): C$1.54
OTCBB Price: (August 27): US$1.47
52-Week High-Low: US$1.84 - $1.06
Initiating Report Price: US$1.36 (May 1/07)
Initiating Report Target Price: US$1.95
Hi-Lo since Initiating Report: US$1.50 - $1.20

The shares of Colombia Goldfields Ltd. began trading on the TSX as of the opening on Monday, August 27, 2007. Symbol is GOL. The shares also trade on the OTCBB in the U.S.A. under thesymbol CGDF, and in Germany with the symbol C2B.F.

The TSX listing should significantly expand investor awareness of the Company, which has been a continuing challenge for management.

Colombia Goldfields, through its Colombian subsidiaries, is developing amulti-million ounce gold resource in Colombia's historic Marmato Mountain golddistrict through a program of mineral property acquisitions, communityresettlement and exploration.

In our May 2007 Initiating Report, eResearch rated the stock as a Speculative Buy and had a target for the shares of $1.95. Since the report’s issuance, the stock has been up and down between $1.30 and $1.50 four times. Any good drilling news from Marmato could see the range-bound stock break out.

To see our research material, go to www.eresearch.ca

eResearch Blog: Weekly Comment for August 27, 2007

2007-08-27T15:45:00.000-04:00

Are We Heading for a Recession?

We have certainly had an extensive bull market run over the past 4-5 years. How much longer can it go on? Or is it over for now?

If it’s over, is a stock market down-turn a harbinger for an up-coming recession? The stock market always leads economic down-turns, usually by about 3-4 months.

In the past month, the stock markets have gyrated wildly, none more so than on Thursday, August 16th, when the indices reached recent lows. From the July all-time highs to that August 16th, the Dow Jones Industrials fell 11.2%, the S&P500 11.8%, and the TSX Composite 12.1%.

With the sharp recovery in the last two weeks, the indices have retraced about 50% of the down move. This is not unusual after a dramatic free-fall. But if the markets turn lower again and take out the August 16 lows, it could signal the possibility of an economic slow-down, if not a full-blown recession.

What are some of the current factors that indicate a recession in the United States (and its concomitant effect on Canada) is possible? The labour pool is tightening. Commodity prices are historically high. House prices are declining. Credit conditions are tight. The Federal Reserve is nervous. Durable goods orders are weak. Consumer confidence/psychology is waning. Inflationary fears are prevalent. The sub-prime mortgage crisis is not yet over.

It is time to get defensive with your stock portfolio. At least until it is possible to ascertain which way the winds are truly blowing.

eResearch Blog: Stealth Ventures Ltd.

2007-08-21T16:58:00.000-04:00

A Stealth Buying Opportunity

Stealth Ventures is an oil and gas exploration and development company focused on "unconventional" gas reserves, including shale gas and tight gas reservoirs in both Alberta and Saskatchewan, and coalbed methane in Nova Scotia.

Unconventional gas is the moniker given to natural gas, usually found in large amounts, which is located in rock formations that are difficult to produce from and, therefore, require special retrieval techniques. With the exploitation of the normal gas fields in North America, more and more exploration funds are being directed towards unconventional oil and gas exploration and production activities.

Now in the process of morphing from an explorer to a producer, which will provide valuable cash flow, the Company's strategy is to find new projects and obtain high working interests, rather than joint-venture, and bring them from resource to producing reserves.

Despite its almost $75 million market cap, the Company currently has a low investor profile and relatively thin trading volume. As it builds its cash flow base and demonstrates its acumen with the drill bit during its forth-coming aggressive drilling program, the shares should respond positively. As such, the stock represents an intriguing capital gains opportunity at present levels.

We recommend the shares of Stealth Ventures to risk-tolerant investors as a Speculative Buy with a 12-month Target Price of $1.80.

See www.eresearch.ca for this and other reports.

eResearch Blog: FinMetals Mining Ltd.

2007-08-21T12:39:00.000-04:00

Just the Start, Not the Finish

The stock price of FinMetal Mining is tied primarily to the price of nickel. After nickel’s meteoric rise during 2006 until May 2007, it has plummeted about 50%. Likewise, FinMetal Mining’s shares since May are down about 75%. In our opinion, the worst is over, for the metal and the stock. However, we do not foresee an instant return to the former highs. Rather, the recovery is likely to be slow and deliberate.

FinMetal is a mining exploration company based in Finland, and traded on the OTCBB exchange in the United States. Currently, the Company is active only in Finland, with its primary focus being brown-field nickel exploration; it is also involved, to a lesser extent, in gold exploration. The Company has 17 exploration projects it is working on, 14 nickel and 3 gold. Its key property is the past-producing Hälväla Nickel Mine.

Positive factors include: (1) nickel prices are expected to recover and remain historically high pending increased production; (2) gold prices are anticipated to continue rising backed by increasing demand/decreasing supply; and (3)Finland is under-explored, with highly favourable geological potential.

Challenges include: (1) that this is a early-stage exploration company with a long lead time to feasibility; and (2)the Company has low investor awareness and low share trading volumes.

We recommend the shares of FinMetal Mining as a Speculative Buy. Our 12-month Target Price is $0.70.

This and other reports are available at http://www.eresearch.ca/

eResearch Blog: Western Goldfields

2007-08-13T17:02:00.000-04:00

Is Gold Where It’s At?

Western Goldfields Inc. - TSX:WGI; and OTCBB: WGDFF
TSX Price (August 10): $2.70
52-Week High-Low: $3.50 - $1.40
Initiating Report Price: $1.50 (November 22/06)
Initiating Report Target Price: $2.45
Update Report Price: $2.75 (August 8/07)
Update Report Target Price: $4.20

eResearch recently issued an Update Report on Western Goldfields Inc. Since the Company is approaching the start-up of production at its Mesquite Mine, scheduled for January 2008 and three months ahead of original expectations, we anticipate that there will be increasing investor interest in the stock with the growing realization that the Company will soon be generating cash flow. Consequently, we have raised our Target Price, for the 12 months ending next August, to $4.20 per share.

Last week, Western Goldfields’ stock performed relatively well, notwithstanding the severe carnage going on all around it. If this can be maintained, it is a strong indication that the stock should perform well after the market has found a bottom and begins to build a base for the next upward move.

The stock Recommendation remains a “Speculative Buy”, and it is considered suitable primarily for higher-risk investors.

These and other reports by eResearch can be accessed at www.eresearch.ca

eResearch Blog: Volatility Part 2

2007-08-13T16:52:00.000-04:00

WEEKLY COMMENT for August 13, 2007

Last Thursday and Friday, Stephen Whiteside of The UpTrend.com, our contributing partner for technical analysis, in his eResearch-sponsored “Daily Market Outlook” talked at length about the volatility taking place in the markets.

He honed in on the “VIX”.

The VIX is the CBOE Volatility Index® (VIX®) and represents a primary indicator of market expectations of near-term volatility, as conveyed by option prices on the S&P 500 stock index. Introduced in 1993, the VIX is considered to be the market’s premier barometer of investor sentiment and market volatility.

The VIX is an excellent measure of fear in the marketplace, and the index is at four-year highs. However, in 2001-2003, the index was more than twice as high than it is now.

Typically, as the VIX rises, the market declines. But how high is “high”? Just because the index is well above its last four-year averages does not mean that it cannot go higher, and just because the market is low does not mean that it cannot go lower.

As we said last week, “Expect further volatility to come. The market needs to find a bottom and build a base before it can be expected to resume upwards. This will take some time.”

As an add-on, we are not likely at the bottom yet so, if you have cash to invest, keep your powder dry for now.

If you are interested in hearing Stephen’s presentations, click on the following link, or paste them into your browser: http://www.theuptrend.com/20070809/dailymarketoutlook20070809.html for last Thursday and http://www.theuptrend.com/20070810/dailymarketoutlook20070810.html for Friday.

We highly recommend a subscription to Stephen’s technical service. For further information, go to www.uptrend.com or e-mail Stephen at stephen@theuptrend.com.

For access to eResearch for reports and investment articles, go to www.eresearch.ca

eResearch Blog: Cease Trade Order - Negative Connotations

2007-08-09T13:24:00.000-04:00

Andean American Mining Corp. Subject to Cease Trade Order

UPFRONT

As described below, the shares of Andean American Mining Corp. (“Andean” or the “Company”) are under a cease-trade order. Until the situation has been resolved, our Recommendation and Target Price are being placed “Under Review”. In our opinion, the connotations for the share price when trading resumes are negative.

BACKGROUND

On August 3, 2007, the British Columbia Securities Commission (BCSC) took issue with representations made in Andean’s technical reporting and issued a cease trade order on the Company’s shares until it has re-filed the 2006 NI 43-101 technical report on its Invicta gold-silver-copper property located in Peru. Andean’s shares are listed on the TSX-Venture Exchange as well as the Frankfurt Exchange.

Specifically identified are issues surrounding the report containing a historical resource estimate, and that it has higher grades than the report that Andean put out.

In addition to the NI 43-101 report itself, there are also technical reports that were not filed on time by Andean. In its press release dated April 5, 2007, Andean announced an economic evaluation of its Invicta property.

Further, in its press release of June 14, 2007, Andean announced a material change in the mineral resource estimate on its Invicta property, by announcing an increase of 31% in the gold grade, 82% in the silver grade, and 51% in the copper grade.

Under NI 43-101, Andean was required to file pertinent technical reports supporting the April 5th and June 14th disclosures within 45 days of their announcement but had not done so.

In early July 2007, Andean had been prompted by the BCSC to issue a retraction on a press release in which it reviewed a series of objectives and production targets, as well as projections of mine life at Invicta. It gave geological potential tonnage estimates of certain drill targets, all contrary to NI 43-101 guidelines, without noting in disclaimers that there is no certainty that projections will be achieved, nor that any proposed operation will be economically viable.

COMMENT

In a telephone conversation with management, we were told that Company officials are working with the BCSC and the Qualified Person of the 2006 NI 43-101 report to correct the disclosure issues and file the required reports. Management anticipates the issues raised will be rectified in a relatively short time. Until then, our assessment of the stock is held in abeyance.

eResearch Blog: Stock of the Week

2007-08-09T11:04:00.000-04:00

Divcom Lighting Inc. (TSX: DVQ)

Lights! Camera! Action: Buy!

Current Price: $0.215
52-Week High-Low: $0.50 - $0.215
Initiating Report Price: $0.28 (July 4/07)
Initiating Report Target Price: $0.60
Hi-Lo since Initiating Report: $0.275 - $0.215

Divcom Lighting Inc. is a North American manufacturer of architecturally-designed energy-efficient lighting products for retail and commercial markets across Canada and the United States.

Approximately 44% of revenue is generated in Canada and 56% in the United States. Retail revenue constitutes about 80% and the industrial segment 20%.

The shares are down 23% since our Initiating Report of July 5, 2007. They have fallen from $0.28 to a 52-week low of $0.215.

We cautioned in our report, “The substantial softness of the new housing market in the U.S. may affect revenue growth in the short term.”

The Company said it best when they reported in their July 13th MD&A, “The looming construction and housing start slow-down in the United States has contributed to the decline of U.S. retail sales. Divcom also witnessed changes in the buying patterns of “big box” stores in the United States which has negatively affected the timing of U.S. order activity and, consequently, revenues.”

However, Divcom’s order backlog as at May 31, 2007 stood at $1.7 million, which compares to $1.2 million at the end of February. This should provide a strong platform for growth in third quarter revenues.

While fall-out sentiment from the sub-prime mortgage industry debacle will likely have some effect on all related industries and, therefore, companies, in our opinion, there is no change in Divcom’s positive fundamentals.

Although we are mindful of “being tarred with the same brush”, if we liked the stock at $0.28 in early July, we like it even more at $0.215 in early August, and look for buying opportunities on continued weakness.

eResearch Blog: Volatility

2007-08-09T10:52:00.000-04:00

WEEKLY COMMENT for August 7, 2007

When the market is gyrating all over the place, sometimes it is best just to sit on the sidelines. We have been warning for weeks that a downturn was coming and that it would be prudent to “go to cash” and “take some profits off the table”.

In the past two weeks, the S&P/TSX is down 7.0%. Both Energy and Health were off 7.2%; Telecommunications fell 6.9%; Materials (mines and metals) declined 6.6%; and Financials were off 6.4%.

In comparison, the last two weeks of trading saw the DJIA fall 4.8%, and both the S&P 500 and the NASDAQ 6.6%.

The Dow Jones 30 Industrials exhibited considerable volatility. Over the last ten trading days, each day saw the index swing, from its highest to its lowest, more than 200 points, and 8 of the 10 trading days had closings (3 up and 5 down) that exceeded 100 points.

Expect further volatility to come. The market needs to find a bottom and build a base before it can be expected to resume upwards. This will take some time.

eResearch Blog: Bellhaven Target Price Raised

2007-08-03T14:00:00.000-04:00

Favourable Drill Results

With the release of highly encouraging drill results, the shares of Bellhaven Copper & Gold Inc. (“Bellhaven”) have exceeded our Target Price. Based on the information currently available, we are raising our share price objective with a view to refining it after the release, expected later this year, by the Company of a revised mineral resource estimate.

Bellhaven announced its first results from its 3,300 meter drill program being conducted at its copper, gold, and silver Cerro Chorcha porphyry deposit in Panama with joint venture partner Empire Minerals Corp. (OTC: EMPL).

The copper results were highly attractive. In a telephone conversation with management, we learned that these are the best results (both in terms of thickness and grade) thus far at Cerro Chorcho. Bellhaven encountered mineralization from surface to 239 meters depth of 1.2% copper, 0.23 g/t gold, and 6.1 g/t silver. This included 38 meters of copper grading 2.88%.

Mineral Resource Estimate

This property contains a NI 43-101 mineral resource estimate of 135 million tonnes grading 0.48% copper. The ongoing diamond drilling program, with three holes completed to date and nine holes planned, will test the mineralization at Cerro Chorcha, a 1 km by at least 600 meter surface expression.

Diamond Drilling Program

The current diamond drilling program is expected to be completed by the end of September 2007. We expect that Bellhaven will follow this up with a new mineral resource estimate for Cerro Chorcha soon after.

In 2008, we expect Bellhaven will have a highly active year, with four drilling programs under way at the following properties with its joint venture partners: Cerro Chorcha (Empire Minerals), Rio Liri, Los Hatillos (Golden Cross) and Viento Frio (Western Troy).

Market Performance

At the time of our Initiating Report of April 16, 2007, Bellhaven shares were trading at $0.53, and have had a great run. (This Initiating Report is available on our website at www.eResearch.ca.)

Bellhaven’s share price has moved sharply higher in recent weeks, in advance of, and following the release of the results from this first drill hole. Consequently, the eResearch original Target Price of $1.10 has been exceeded.

We will wait until later in the year for the release of the revised mineral resource estimate before recalculating our net asset value estimate for Bellhaven. However, reflecting the increased expectations for this huge copper project in Panama, eResearch is increasing its Target Price for Bellhaven from our original objective of $1.10 to a range of $1.40-$1.50. This share price revision also considers possible exploration upside from the additional drilling programs slated for 2008.

eResearch Blog: Time to Sell the Canadian Banks?

2007-08-02T10:16:00.000-04:00

Market Sensitivity of Major Canadian Banks

Market-Sensitive Businesses Represent 25% of Revenues; Up 32% Over The Last Five Years
……………………………….
Bank Investors Should Take Fair Warning That A Significant Credit Tightening Could Negatively
Impact Bank Earnings To A Higher Degree Than In Previous Cycles

Conclusion: Market-Sensitivity Could Rival Loan Losses In A Credit Crunch

The major Canadian banks have increased the proportion of revenue derived from market-sensitive businesses from 19% of total revenue in 2002 to 25% currently, a 32% increase over the last five years. This may come as no big surprise to investors, but it will be a very key factor if a major market correction, driven by a significant credit tightening, were to occur, as previously the impact would have been largely geared to higher loan losses.

Observation 1: Not so going forward. With increased revenue dependency on market-sensitive businesses which includes (i) trading revenues, (ii) retail brokerage commissions, (iii) investment banking fees and (iv) merchant banking, venture capital and security gains, the major Canadian banks could see a revenue contraction in these market-sensitive businesses that could exasperate the negative impact on earnings of a down cycle.

Individual bank market-sensitivities as we see it are:
(a) National Bank is the most sensitive by a substantial margin with a high 44% sensitivity. This is the highest in North America that we can determine.
(b) Scotiabank appears the least sensitive at 17%.
(c) RBC, BMO, TD and CIBC fall in a sensitivity range of 22% to 29%.

Observation 2: Market-sensitivity impact on net operating income is even higher. Although representing an average of 25% of total revenues, market-sensitive businesses are estimated to contribute over 30% of the total bank net operating income, as profit margins on these businesses tend to be much higher than traditional banking margins.

Observation 3: Market-sensitivity to rival the negative impact of higher loan losses. Loan losses have declined from 13% of revenue in fiscal 2002 (the last bad year) to 3% in the fiscal YTD 2007 (one of the best periods in recent history). The impact on net operating income is over twice this figure. Consider then:
(a) A doubling of loan losses (not at all inconceivable given the historically low levels) could lower net operating income by 8% annually; and
(b) A 25% drop in market-sensitive revenues could lower net operating income by a further 8%.

Observation 4: In combination, a 16% reduction in bank net operating income. The result of a significant credit tightening on the Canadian banks is material and would be expected to result in a freezing of dividend increases and a probable share price correction in the order of 20%.

eResearch Blog: Before The Gold Rush

2007-08-01T14:40:00.001-04:00

Don’t Catch The Falling Knife!

Well, it finally happened. Last week saw what we have been warning about for months. The S&P/TSX dropped 834 points, or 5.7%; the DJIA fell 586, or 4.2%; the S&P 500 75 points, or 4.9%; and the NASDAQ 125, or 4.7%.

Witness the following quotes from our previous Weekly Comment topics:

(1) March 26: “Which way from here? An investor should be nervous when there is not a pause in the relentless upward movement in stock prices. The further up and the longer the upward time-frame, the more likely a crash will occur. … Investors may want to ponder in these next few weeks whether the market can continue to out-perform. In our view, a pull-back would be healthy.”

(2) May 7: “How much longer is this bull market going to run? … The market needs a correction. That would be healthy. Many stocks are over-heated, over-valued, and over-the-moon. … Now would be a good time to sell those under-performing stocks, go to cash, and be ready for the inevitable correction. It’s coming. Just don’t know when.”

(3) June 11: “We have written here many times in the recent past about our concerns for the near-term performance of our stock markets. Despite indexes reaching historic highs, our fears continue. We highly recommend investors cull their portfolios of their more risky positions. … While timing in the stock market is everything, it is better to be safe than sorry. If you are going to continue riding this bull market, and it is difficult to argue with the higher levels being achieved almost daily, then you had best be nimble when the pull-back comes. For we think the drop could be swift and sharp, although perhaps not for long. Having a cash horde to put into over-sold stocks when the markets bottom out is the best way to be a real winner in the stock market.”

(4) July 23: “This is an ideal time to review the sentiment stages of a bull market because this bull is likely to shift stages soon.”

So? Now where? Is it over? Will the market recover from here? Or, will we get a “dead cat” bounce?

More likely is that the market is heading lower for a while. It needs to find a bottom and build a base before beginning the next up-leg. Despite some negatives, there are still many positive factors at work in the global economies that bode well for those to choose to sit tight and wait it out.

In conclusion, we quote from last week’s newsletter: “Is there a safe haven? If there is, we think it is gold.”

Other research is available on our web-site: www.eresearch.ca

eResearch Blog: Back in Town

2007-08-01T14:37:00.001-04:00

The Return of Eike Batista

It was not without considerable interest to read last week about the listing of MMX Mineracao e Metalicos SA ("MMX") on the TSX. This iron ore company is led by Eike Batista. The Financial Post headline reads: "TSX Lures Brazilian Magnate" "Iron Ore Firm on TSX" "Infrastructure assets next up, CEO Batista says".

This is the same Eike Batista of TVX Gold fame. TVX Gold was a star performer in the 1990s on the TSE 300. But in October 1998, an Ontario Court ruled that a major part of TVX's prized property, the Kassandra gold property in Greece, was rightfully owned by a partnership known as the Alpha Group. This ruling was the start of the down-fall of Mr. Batista, but not before a considerable number of individuals, groups, companies, shareholders, and investors became, how can we say it, "disenchanted" with TVX Gold CEO Mr. Batista. Eventually, Mr. Batista lost control of TVX Gold and it was later purchased by Kinross Gold Corporation.

Mr. Batista has also run foul of authorities in other countries, including in his own Brazil, where, in early 2006, he was involved in a scandal concerning a Brazilian thermoelectric power plant that obtained an "unscrupulous contract" with the former president of Brazil, Mr. Fernando Cardoso.

Earlier in 2006, Mr. Batista was expelled from Bolivia for failure to comply with the necessary environmental licensing required for the construction of a power plant that was illegally built.

And here he is back in Toronto, to which he first came in 1983. As well, that infrastructure asset referred to earlier ...? The Ontario Teachers' Pension Plan is reported to have taken a 15% interest in LLX Logistica SA, a Brazilian port company. And that was after Teachers' became the second largest investor in MMX.

Talk about caveat emptor. And the "Teachers" have not learned the " history lesson".

For reports and other research insight, see our web-site: www.eresearch.ca

eResearch Blog: Diamond Play

2007-08-01T14:34:00.000-04:00

A Polished and Promising Joint Venture

Diamonds seem to be the forgotten sector of the mining industry. But investor interest should increase with the opening of two new diamond mines next year.

In the meantime, Indicator Minerals has hooked up with Teck Cominco on its Darby property. This is Teck’s first venture into diamonds. If it likes what it sees, longer term, that hook-up could be solidified.

Indicator Minerals is engaged in exploration for diamonds on more than 4 million acres in the Territory of Nunavut, Canada. The Company is involved in three projects: Darby; Barrow; and Grail, all of which are 80%-owned.

We recommend the shares of Indicator Minerals, a pure Canadian diamond exploration play, as a Speculative Buy for risk-tolerant investors. Our 12-month Target Price is $0.65 per share.

This, and other reports are posted on our web-site: www.eresearch.ca

eResearch Blog: Exploration Voyager

2007-07-26T17:58:00.001-04:00

Radisson Mining Resources Inc.

Radisson Mining Resources Inc. is a Quebec-based mineral exploration company, with an office in Toronto.

The Company is focused on the exploration of gold, molybdenum, and base metals at its properties in the prolific Abitibi-Témiscamingue region of northwestern Quebec and in northwestern Ontario near Dryden. Radisson's current exploration efforts are focused on the former O’Brien Mine Property, the highest grade gold producer in the Noranda-Val d’Or mining camp from the early 1930s to the mid 1950s. A recent NI 43-101 Technical Report for Zone 36 East on the O’Brien Property establishes a mineral resource and indicates excellent potential for expansion of the resource in several areas.

Radisson’s molybdenum properties in northwestern Ontario provide attractive exploration potential and commodity diversity.

Challenges include the necessity for significant funding to undertake the next stage of exploration at Zone 36 East and other prospective properties, and the lack of investor awareness of the Company and its potential, although this presents an opportunity for new investors.

We recommend the shares of Radisson Mining Resources Inc. as a Speculative Buy, with a 12-month Target Price of $0.45 per share, giving a potential upside return of 50% from the current share price.

This report and others are found on our web-site: www.eresearch.ca

eResearch Blog: Sego Resources Update

2007-07-25T14:17:00.000-04:00

Sego Resources Doubles Its Property Portfolio With New Property Acquisition

Sego Resources Inc. has announced it has acquired a porphyry copper/gold/palladium property near
Princeton, British Columbia, entitled the Miner Mountain Project. The property lies in the prolific porphyry copper camp that runs from Copper Mountain along the Allison Fault to Aspen Grove, B.C. The Miner Mountain Project is approximately 15 km northeast of the former producing Copper Mountain Mine (approx. 50 years of open pit production).

The Qualifi ed Person stated “the claims are essentially drift covered and offer good exploration potential due to the fact that they both border known mineralization.”

The agreement includes staged payments of a total of $165,000 and 300,000 shares with a further 300,000 shares due upon preparation of a positive feasibility study on the property. The agreement is subject to regulatory approval.

COMMENT: eResearch views this as a favourable development that provides Sego with increased exploration
upside, greater property diversity, and exposure to new commodities. Financially, this deal is manageable for Sego. Adding another property helps offset one of the challenges eResearch identified in our Initiating Report on Sego, dated May 7, 2007 – the property concentration.

Our Target Price for Sego Resources remains unchanged at $0.55.

Visit our web-site: www.eresearch.ca

eResearch Blog: This Bull Market

2007-07-25T14:04:00.000-04:00

Is This Bull Market Done?

This is an ideal time to review the sentiment stages of a bull market because this bull is likely to shift stages soon.

Generally, there are four stages to any market rally:
(1) disgust (normally when stocks make a long-term bottom);
(2) disbelief (when investors doubt a market rally);
(3) acceptance (the point at which investors begin to "believe" in a rally); and
(4) euphoria (when investors think nothing can go wrong with a rally).

It is important to know where we are within these stages to get an idea of how much longer this bull market can run. For instance, when the market hits the euphoric stage it is usually best to shorten long positions because, if everyone is euphoric, it could mean that the majority of cash has been allocated to the market, and that there is little catalyst left for stock prices to go higher. This also means that there is more selling potential priced into stocks, as negative news tends to spook investors into selling.

The current market appears to be in the euphoric stage. The Dow Jones Industrials, the S&P500, the NASDAQ, and the S&P/TSX are all at all-time highs. In large part, this euphoria is being fed by the private equity funds (see The eResearch Clarion of July 16, 2007) and their insatiable appetite for takeovers, particularly for lumbering large-cap companies.

There are considerable warning signs:
(1) unbridled global economic growth, but particularly in some emerging countries;
(2) high energy prices (oil is back to its all-time high around US$75.00/bbl);
(3) high commodity prices;
(4) global currency oversupply;
(5) depreciating U.S. dollar;
(6) rising interest rates; and
(7) inflations concerns.

Is there a safe haven? If there is, we think it is gold. Gold prices have been moribund for the past five months vacillating between US$640/oz. and US$685/oz. Gold prices have not kept pace with the price increases of other precious metals, such as platinum or palladium, or of many base metals, example, uranium, molybdenum, copper, and zinc.

Gold stocks have perked up recently. This could be a harbinger for the metal.

For other reports by eResearch, go to www.eresearch.ca

eResearch Blog: Subdued Oracle is Stirring

2007-07-25T14:00:00.000-04:00

The Oracle is Still Subdued, but Stirring!

Oracle Energy Corp. has gone through a challenging time since we published our Initiating Report in February 2006. However, in our opinion, the Company’s future now seems somewhat brighter. Although we are maintaining our “Speculative Buy” Recommendation, we are lowering our 12-month Target Price to $0.45 per share from the $0.80 per share set forth in our initial report. An investment in the shares of Oracle are considered to be suitable only for risk-tolerant accounts.

Our renewed enthusiam stems from the Company's at-long-last imminent start-up of production from one of its key properties in Romania, which will provide it with valuable cash flow. Its long-delayed drill program in Italy also has been given the "green light" and should commence shortly. The disappointing write-off of its investment in Yemen is behind it, and the Company has diversified its exposure with the acquisition of a 18.75% interest in an oil & gas lease in Texas.

Range-bound for eight months, any good news should give upward impetus to the share price. Although risky, Oracle is well worth a look at current prices.

All eResearch Initiating Reports are posted on www.eresearch.ca

eResearch Blog: Positive Caber Toss!

2007-07-18T15:59:00.000-04:00

Metco Resources Inc. (TSX-V: MKO $0.13) Announces Results of Prefeasibility Study for its Caber Deposits

The engineering firm, GENIVAR Limited Partnership (“Genivar”), of Quebec City, has concluded that the Caber project is technically feasible and is also economically viable.

Genivar concluded the following regarding the Caber Project:
• Positive net cash fl ow of $19.9 million before taxes.
• Cash fl ow net present value discounted at 8%: $12.3 million.
• 10% increase in metal prices results in NPV of $20.8 million.
• 10% decrease in metal prices results in NPV of $3.8 million.
• Internal rate of return: 30.3%.
• Payback period 30 months, on total project timeframe of 40.5 months.
• Capital required and ongoing investments: $35.2 million including a 14.1% contingency.
• Overall operating cost of $81.07 per tonne milled, including transportation.
• Metal recoveries used: Zinc-93%, Copper-84%, Silver-34%, Gold-35%.

Based on the indicated mineral resources alone, Genivar determined that the Caber deposit contains probable mineral reserves of 589,000 tonnes grading 8.58% zinc, 0.84% copper, 8.89 g/t silver and 0.13 g/t gold.

Genivar’s plan includes an underground mine with the deposit accessed via a ramp. Ore is milled at Breakwater’s near-by Langlois Mill at Lebel-sur-Quévillon.

Metal price assumptions Zinc: US$1.12/lb; Copper: US$2.55/lb; Silver: US$12.00/oz; and Gold: US$600/oz.

COMMENT: This is a positive development for Metco. Going forward, the Company will
have several strategic options regarding the development of the Caber deposit, but it will
also have to consider the forthcoming prefeasibility study on its Orphée property, which is
expected in August following further drilling. These properties together form the core value
of the Company, and developing them together could add to the economics of the projects.

Conclusion: eResearch continues to believe that, at current share prices, the shares of Metco Resources offer good value for investors. We maintain our Target Price of $0.25, and our Speculative Buy Recommendation.

For this and other research reports, visit our web-site: www.eresearch.ca

eResearch Blog: Blazing Saddles

2007-07-18T12:49:00.000-04:00

Analyst Article

eResearch is pleased to provide an article written by Edmond G. Eberts of RAPPORT Capital Formation Strategists Inc.

The final sentence in Mr. Eberts’ article states: “Maybe one would be better off not being filthy rich and famous, and risk being tossed from a blazing saddle!”

The theme of this latest article is the pros and cons of being rich and famous, and the pitfalls that come with it. Some of the interesting thoughts Mr. Eberts promulgates are quoted below:

“Relative freedom and an unfettered market system have never guaranteed affluence, but they have given an extraordinary large number of gifted people a shot at being prosperous.”

“The really rich simply cannot spend all their money. However, their great achievement does enable philanthropy.”

“Today’s legions of under-forty year olds seem to be seized by the culture of entitlement. They have so far made little effort to assume the mantle from their baby-boomer parents, and done practically nothing save being idle or go shopping.” (Love it, Ed, if perhaps a bit too harsh!)

“Canada is too easy for these insentient youngsters. It is too healthy and wealthy and cushioned. It is typecast for breeding of inertia. Turned off politics by corruption, fully three-quarters choose not to vote. Outrage is in short supply. There are few protest songs these days and journalists are tame and pro-system.”

“Children brought up never asked to do chores, or required to earn their pocket money, are
out of touch with reality. As are those whose university tuition is provided for, rather than
having to take on a summer job and repay student loans upon graduation.”

“Whereas those who have earned their keep and are justifiably proud of their achievement tend to be relatively quiet and self-assured, those born with a silver spoon in their mouth and given everything they could possibly ask for, often have a nasty habit of trying to dominate a conversation.”

Mr. Eberts is interesting to read, thought-provoking, challenging, and always entertaining.

We hope you enjoy the article.

To access the article, click on www.eresearch.ca/_report/BlazingSaddles_071807.pdf

To aaccess eResearch: www.eresearch.ca

eResearch Blog: Private Equity Funds

2007-07-16T13:33:00.000-04:00

The Impact of the PEFs

Bubble! Bubble! Toil and trouble!

Except that the S&P/TSX, the Dow Jones 30 Industrials, and the S&P 500 are all selling at a p/e multiple of only 18 times earnings! Stock market gurus, economic pundits, dooms-day soothsayers, and au fait investors have all been calling for a market correction, for months. And now the indexes have broken out last week on the up-side after a two-month consolidation.

In our opinion, the main factor that is driving the markets ever higher is the participation of the Private Equity Funds (“PEFs”) and their unquenchable penchant to gobble up almost anything in sight. Size of the takeover candidate is not a deterrent.

The strategy of the PEFs in their acquisitions is to put up as little equity as possible, primarily financing the buy-out through the use of debt. After three or four years of a little surgical doctoring, which could involve changes to management, closing down or selling divisions, or realigning operations and strategy, the revamped company is gussied up and refloated on the market at a considerable profit (the PEFs hope).

Over the past twelve months there have been numerous PEF acquisitions. This activity has driven equity markets to their recent all-time highs. Stocks have reached price levels that would not have occurred without the bids.

This PEF activity is not something new. The last PEF boom ended with the collapse of the technology sector in 2000. Could a melt-down happen again? Of course it could, and it is highly likely it will.
There are already warning signs. Many of the recent acquisitions have been incredibly expensive, since deals have been done at higher and higher stock prices as the markets churn upwards. In Canada, the PEFs were falling all over themselves to acquire BCE Inc. with the winning bid being at a price 30% higher than the stock had been for the past five years, and back to the levels reached in 2000-2001 when there was so much hope and expectation for the reconstituted BCE at that time.

Another sign: the PEFs themselves are going public. The owners are cashing out. If they are so smart, that is, if they are astute at recognizing enterprise value, surely they can recognize the worth of their own entity, and if they want to sell their own company’s stock, should we not believe that the market is near a top?

Perhaps the most important signal been given that the PEF party may be in for rougher times ahead is that some of the bond deals used to finance these eye-popping buy-outs are starting to run into trouble as many money mangers are reluctant to take on increasing risk. Couple that with rising interest rates, which makes alternative debt issues, i.e., government bonds, more attractive and there should be a decline in the rate of acquisition activity.

Thus, are the vast pools of money that have spawned and accelerated these fantastic takeovers starting to dry up?

If so, stock market volatility is likely to increase. There is also likely to be a shift in investor focus to investment grade bonds and large-cap stocks, particularly those in defensive sectors such as health care and consumer staples.

As we said in our Comment last April 30th, “This acquisition binge is also a bubble. One day it will burst.” We still hold to that. Beware!

eResearch Blog: Stock of the Week

2007-07-16T10:53:00.000-04:00

Royal Roads Corp. (TSX-V: RRO)

Making Us Look Good

Price (July 13): $0.51
52-Week High-Low: $0.68 - $0.15
Initiating Report Price: $0.41 (July 11/07
Initiating Report Target Price: $0.75
Hi-Lo since Initiating Report: $0.55 - $0.38

eResearch initiated coverage of Royal Roads Corp. on Wednesday, July 11, 2007. We heard the clarion call, and are now tooting our own horn. In the two trading days since we issued our report, the shares of Royal Roads reached an intra-day high of $0.55, a gain of 34% from our Report Price of $0.41. The stock closed Friday at $0.51.

Further, the trading volume escalated sharply. On Friday, the stock traded 420,200 shares. This compares with the last 20-day average of 34,300 and 150-day average of 36,800.

eResearch cannot prove that its report was the reason for the strong share price performance, but we believe that its issuance was a major contributor, being more than a mere co-incidence. However, there are always situations where there are persons who are privy to positive information about a company that is about to be made public.

Royal Roads is exploring for minerals in Newfoundland. Its principal property is 100%-owned Tulks North, which contains the Daniels Pond zinc-lead-silver deposit. Through its 34%-owned holding in Buchans River Ltd., Royal Roads has an interest in the Buchans Property that overlies the historic Buchans Mine, which produced from 1928 to 1984. It was one of Canada’s richest base metal mines, and the potential for discovery nearby is, in our opinion, above average.

We recommended the shares of Royal Roads as a Speculative Buy. Our 12-month Target Price is $0.75.

eResearch Blog: EXMIN Strategic Alliance

2007-07-12T16:56:00.000-04:00

EXMIN Resources Corp. (TSX-V:EXM)

ANNOUNCEMENT: EXMIN Resources Inc. executed a Letter of Agreement with the Hochschild Mining Group to enter into a Strategic Alliance in which Hochschild would be entitled to purchase up to US$4.5 million in EXMIN common stock at a discounted price of C$0.40 per share. In return, EXMIN would grant a First Right of Offer to Hochschild on any of its projects over an 18-month period.

Hochschild will purchase US$3 million in EXMIN common shares at C$0.40 per share as consideration for the Letter of Agreement and as an investment in EXMIN. These proceeds are designated for the Santa Maria de Moris Mine rehabilitation and operation costs, until positive cash flow is anticipated by late 2007.

In addition, EXMIN granted the right to Hochschild to convert the existing US$1.5 million line of credit into EXMIN common shares at C$0.40 per share. Hochschild also granted EXMIN a new US$1 million line of credit available immediately for use on any exploration project where the companies may be involved on a joint basis. This new line of credit would be paid down one year after draw-down from the cash flows generated at the Santa Maria de Moris Mine.

COMMENT: We consider the Strategic Alliance with Hochschild to be a positive development in which EXMIN will benefit from the infusion of equity and closer ties with the respected Hochschild. The Strategic Alliance would ensure that EXMIN will meet its obligations at the Moris Mine without having to access the capital markets. The Santa Maria de Moris Mine is 70% owned by Hochschild and 30% owned by EXMIN and is currently a major focus of the Company.

RECOMMENDATION: EXMIN shares closed at $0.54/share on July 11, 2007 after climbing to a 52-week high of $0.88 per share in late February 2007, just short of our $0.90 Target Price. On the basis of transactions such as this, we believe the stock has excellent potential to return to its recent high. Accordingly, we are confirming the 12-month Target Price of $0.90/share set out in our Initiating Report of December 15, 2006. We maintain our Speculative Buy rating for risk-tolerant investors.

eResearch Blog: Less W(h)ining

2007-07-12T16:51:00.000-04:00

First Venture Technologies Corp. (TSX-V: FEB) Announces Key Technical Appointments

First Venture has hired Dr. John Husnik as Senior Research Scientist, and Mr. Bryan Avila to the position of Technical Projects Leader with First Venture Yeast Products, Inc.

Dr. Husnik is a microbiologist and an expert in the area of wine yeast genetics. He was the technical lead on the development of the urea-degrading yeast technology at the University of British Columbia’s Wine Research Centre. Dr. Husnik’s recent publications in peer-reviewed journals demonstrate his unique expertise in the successful development of functionally-enhanced yeast strains.

Mr. Avila brings a progressive and innovative track record to the team, along with work experience and contacts with some of the top wineries and commercial laboratories in the California wine industry. He has a Bachelor of Science in Fermentation.

COMMENT: These new hires bring important technical knowledge to First Venture, as it expands its team of highly skilled yeast specialists in preparation for future commercial production of its proprietary yeast strains.

First Venture Announces Successful Commercial Trials in Chile

First Venture reported that its commercial trials of its urea-degrading wine yeasts produced positive results in Chile (a global top-ten wine producer) during their spring 2007 winemaking season. Independent analyses performed by a leading South American wine lab revealed Ethyl Carbamate (Urethane) reductions ranging as high as 76%-92%, when First Venture yeast strains were compared to control yeast strains.

COMMENT: The commercial trial results were as expected, and further demonstrate the co-operation and commitment of the global wine industry, now including Chile, to minimize the Ethyl Carbamate carcinogen in wine-based beverages.

See our web-site: http://www.eresearch.ca/ for our report and other commentaries on First Venture.

eResearch Blog: Giddy-Up Exploration

2007-07-12T16:46:00.000-04:00

Hi Ho Silver Resources Inc. (CNQ: HIHO)

Hi Ho Silver Resources Inc. announced it will commence exploration on a second property, its Silver Tip Silver Project. Silver Tip is located within the prolific Slocan/Nelson mining camp south central British Columbia.

According to the BC “MINFILE” database, the property contains five high-grade mineral showings containing silver, lead, and zinc, and gold is also present.

Hi Ho Silver owns a 51% interest in the Silver Tip Project, with an option to acquire the remaining 49% by paying $65,000 and issuing 300,000 shares of the Company by October 1, 2007.

COMMENT: It comes as no surprise that the Company is starting to explore the Silver Tip Silver Property, given the timing of its option to acquire the remaining 49% interest. We view the announcement as positive in that Silver Tip provides both asset diversification for Hi Ho Silver and commodity diversification, and appears to offer attractive high-grade exploration potential.

eResearch Blog: Road to Riches?

2007-07-12T08:08:00.000-04:00

Royal Roads Corp.

eResearch recommends the shares of Royal Roads Corp. as a Speculative Buy. Our 12-month Target Price is $0.75 per share, for an 83% increase from the current price.

Royal Roads Corp. is engaged in the exploration of mineral properties in south-central Newfoundland. It owns 100% of the Tulks North Property, hosting the Daniels Pond zinc-lead-silver deposit. In addition, Royal Roads owns 34% of Buchans River Ltd., which owns 100% of the Buchans Property, comprising 512 mineral claims at the renowned Buchans base metal camp in Newfoundland.

The current 12,500 metre drill program could upgrade Inferred Resources to Indicated Resources by early 2008 at the key Daniel's Pond deposit. There is considerable exploration activity in the area by other mining companies, including Aur Resources recently commencing production at its zinc-copper Duck Pond Mine.

Newfoundland is known as a "mining-friendly" province. Both Royal Roads and Buchans River are currently well-financed.

Challenges include: (1) low liquidity of the Company's stock; (2) a small market cap; (3) low investor awareness of the Company and its potential; and (4) the minority position in Buchans River is not ideal.

eResearch Blog: Stock of the Week

2007-07-09T15:03:00.000-04:00

Jet Gold Corp.

Price (July 6): $0.37
52-Week High-Low: $0.69 - $0.15
Initiating Report Price: $0.58 (May 24/07
Initiating Report Target Price: $0.77
Hi-Lo since Initiating Report: $0.58- $0.29

eResearch initiated coverage of Jet Gold Corp. on May 24, 2007 with a Speculative Buy Recommendation, and a 12-month Target Price of $0.77 per share.

Timing is everything. Two days before we issued our report, the stock spiked from $0.36 to a high of $0.69. This was sparked by the Company’s announcement that it had commenced diamond drilling on its Naskeena coal property located in northern British Columbia.

In the absence of news, the stock sold off over the ensuing month, only showing some revival activity near the end of June. Trading volumes are light, so it does not take much to move this stock up or down a few points.

Share price recovery, to a large extent, will depend upon not only the success with the drill bit, but also the timing (and contents) of the NI 43-101 Technical Report on Naskeena that is expected later this year. Historic (non-compliant) estimates of the property’s potential were 240 million tonnes of high carbon, low ash, low sulphur coal.

In the meanwhile, Jet Gold is continuing its early-stage gold exploration activities in both northern B.C. and in Myanmar. The Company also receives moderate revenue from its Texas oil and gas interests.

There has been some renewed interest in coal stocks recently. Any positive developments at the Company’s Naskeena initiative should react positively on the stock. In our opinion, the current share price weakness represents a (speculative) buying opportunity.

We are retaining our Speculative Buy Recommendation and our $0.77 Target Price.

eResearch Blog: Infrastructure

2007-07-09T14:46:00.000-04:00

A Burgeoning Investment Asset Class

Toll roads, bridges, tunnels, power plants, airports, sea-ports, rapid transit, utilities (gas, electric, water), telecom, prisons, hospitals, schools, etc: Infrastructure is the new buzz-word, and infrastructure assets are the “new” investment must-haves.

Growth in infrastructure is being fuelled, in part, by the need for governments to replace decaying assets. Since these replacements are extremely costly to finance, governments are increasingly looking to the private sector for partners.

Pension funds have “discovered” infrastructure, and are beginning to take sizable positions in the sector. Why?

(1) Infrastructure assets are a hedge against inflation since the revenues earned usually increase along with the cost of living.

(2) Infrastructure assets are less volatile, being rarely vulnerable to price swings in the economy or the stock market.

(3) Returns from infrastructure are predictable and long-term.

(4) Returns from infrastructure are attractive vis-à-vis alternative fixed income classes.

Retail investors are also becoming increasingly attracted to the infrastructure class.

To take advantage of the increasing investor interest, there have been quite a few new infrastructure funds established. In part, they could take the place of the dying income trust sector. Like the income trusts, infrastructure has fairly stable cash flows and, therefore, distribution payments which, in most cases, are paid on a monthly basis.

There are concerns with investing in infrastructure. This is a new investment arena with a short track record. There is the danger, in the repackaging of the product for the investment community that, in an effort to increase returns, there is too much debt added and not enough equity. This could make the infrastructure asset vulnerable to negative shifts in the economy or interest rates.

The under-investment in infrastructure assets provides an enormous opportunity for pension funds, large assets administrators, investment banks and, as an adjunct, retail investors to participate in a new and intriguing investment asset class.

eResearch Blog: Do You See the Light?

2007-07-05T16:24:00.000-04:00

We recommend the shares of Divcom Lighting Inc. to risk-tolerant investors as a Speculative Buy with a 12-month Target Price of $0.60 per share.

Divcom is a North American manufacturer of architecturally-designed energy-efficient lighting products for retail and commercial markets across Canada and the United States. The Company's products are used in residential, urban communities, roads and tunnels, and in lighting for public, commercial, industrial, hospitality and custom installations.

Divcom has demonstrated the ability to grow its revenues significantly through both acquisitions and organic growth over the last few years, in a market that is very large and fragmented.

Positive industry factors include recent government initiatives that encourage consumers and businesses to use more efficient lighting. With the Company's push into the United States, the rising value of the Canadian dollar could have an increasingly negative impact on the Company's business in the U.S.A.

For this and other research reports, visit our site: www.eresearch.ca

eResearch Blog: Stock of the Week

2007-07-03T15:05:00.000-04:00

Eloda Corporation

Headline: Unusual Activity

Price (June 29): $0.40
52-Week High-Low: $0.74 - $0.20
Initiating Report Price: $0.61 (March 2/07)
Initiating Report Target Price: $0.80
Hi-Lo since Initiating Report: $0.61- $0.35

Eloda Corporation has been trading only since mid-January. Other than a flurry of activity in mid-February when trading volumes exceeded 3 millions shares on one day and 1 million shares the next, trading volume has been very light, often not at all. Until Friday.

Share trading on Friday, June 29th was quite erratic. Opening at $0.38, the stock gyrated between $0.38 and $0.45, closing at $0.40. Share volume was 150,000. Not the 1 or 3 million of February, but the largest since then.

Eloda is an advertising monitoring company that provides business intelligence services to brand advertisers, ad agencies, and media companies. The Company is already established in Canada and is putting a big push on extending its recent launch into the United States. This is a highly-competitive business, but Eloda’s technology differs in that it allows advertisers to track not only their own TV ad occurrences but also those of their competitors.

Other than earnings announcements and a private placement financing, the Company has provided few corporate announcements over the past four months. We are looking for a break-through, and the unusual activity on Friday may (or may not) be an indication that one is close to hand.

We are retaining our Speculative Buy Recommendation and our $0.80 Target Price.

eResearch Blog: The Clarion Call

2007-07-03T14:58:00.000-04:00

Tooting One's Own Horn

The official name of our company is Independent Equity Research Corp., but we are better known under our operating name, eResearch. Founded in 2000, and modeled on the credit-rating industry, we were Canada’s first provider of unbiased independent equity research.

We are not affiliated with or owned by any financial institution, investment banker, brokerage firm, or investor-related organization. We are a private firm, 100%-owned by employees and private investors.

The italicized “e” in eResearch has two connotations: equity and electronic.

“Equity” because our sole mandate is providing equity research to the market. “Electronic” because that equity research is distributed electronically.

eResearch is a pure research organization. We are not involved in corporate finance, investment banking, or underwriting activities, nor are we engaged in institutional or retail sales. All we do is equity research.

We place our research material on our web-site, and also disseminate it through our extensive electronic distribution network, which includes, amongst others, Reuters, Thomson One, MorningStar Canada, FactSet, MSN Sympatico, Canoe.ca, and BayStreet.ca.

We have other distribution partners. eResearch is pleased to be one of only two Canadian providers of research to E*TRADE Canada. We also populate the web-site of Credential Securities and Credential Direct. And we are in on-going discussions with other investment services organizations.

eResearch offers the following research products and services:
● Annual Continuous Coverage
● Initiating Reports
● Update Reports
● Analyst Commentaries
● eResearch Bulletins
● Analyst Articles
● Weekly Newsletter: The eResearch Clarion
● Technical Analysis (through The UpTrend.com)
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Our in-depth research reports are of institutional quality and are written by highly-qualified contracted Analysts, many of whom are CFAs. Our Investment Committee ensures that our report Recommendations and stock Target Prices receive the maximum benefit of our collective wisdom and experience.

In summary, eResearch is Canada’s first and largest provider of independent equity research. Our electronic Distribution Platform is unparalleled. Our contracted Analysts are knowledgeable and experienced in their industries.

We invite you to peruse our user-friendly and highly-informative web-site, and we welcome any thoughts or comments you may have.

We encourage you always to do our own due diligence as part of your investment decision-making. An informed investor is more likely to be a successful investor.

Best of luck, and happy investing.

eResearch Blog: Coastal Contacts Report

2007-06-28T09:39:00.000-04:00

Coastal Contacts Inc. Initiating Report (TSX: COA)

Coastal Contacts is a direct-to-consumer marketer and distributor of replacement contact lenses and related vision care products and services. The Company has become one of the fastest growing and largest “etailers” of contact lenses, marketing its products primarily via its web-sites.

The report’s Highlights state the following:

► Large global provider of online replacement prescription contact lenses
► Strong presence in North America, Europe, and Asia
► Centralized distribution in its major markets
► Over 90% of orders processed directly through the Internet
► Repeat orders business provides increasing revenue
► Highly price competitive with convenient and rapid home/office delivery
► Ample cash resources available for acquisitions and expansion
► Potential for significant margin expansion
► Major opportunity to penetrate Asian market
► Supplementary products, supplies, and accessories diversify product mix
► Recent acquisitions strengthened product mix and increased market reach

eResearch Blog: Augusta Resource Corporation

2007-06-28T09:25:00.000-04:00

AUGUSTA RESOURCE CORPORATION (TSX/AMEX: AZC; FRANKFURT: A5R)

Recommendation: We continue to recommend the shares of Augusta Resource Corporation as a Speculative Buy for high risk-tolerant accounts. As explained below, we are raising our 12-month Target Price for the shares to $3.85.

Recent Significant Event: Sumitomo Corp. agreed to acquire 8.7% of Augusta in a $37.5 million financing. Sumitomo Corp. is one of the largest Japanese conglomerate corporations with a wide range of international business interests, including metals trading. We view Sumitomo’s investment in Augusta as highly significant:
• It is an initial step for having a relationship with Augusta to secure a steady
supply of copper, silver and molybdenum at competitive prices for their
trading purposes;
• There will likely be further investments in Augusta by Sumitomo as the
Rosemont project enters its bankable feasibility, permitting, and project
fi nancing stage;
• Sumitomo’s willingness to pay $3.50 per share at a time when the
Company’s shares were trading in the $2.50 range is a clear revaluation of
the Company.

Comment: Augusta continues to eliminate uncertainties that are generally associated with
development stage projects. Our revised 12 month Target Price is $3.85 per share, based on:
• Recent increase in reserves;
• Reduction of financing risk; and
• Sumitomo’s commitment.

eResearch Blog: Stock of the Week

2007-06-28T09:21:00.000-04:00

Stock of the Week for June 25, 2007

Western Goldfields, Inc. (TSX: WGI; and OTC: WGDF)

Headline: Ahead of Schedule

Price (June 22): $2.59
52-Week High-Low: $3.50 - $1.40
Initiating Report Price: $1.50 (November 22/06)
Initiating Report Target Price: $2.45
Hi-Lo since Initiating Report: $2.95- $1.40

Last week, Western Goldfields’ stock rose 17% after the Company announced that it expected to bring its Mesquite Mine into production well ahead of schedule, that being in January 2008 instead of April 2008 as originally expected.

The recent successful capital raise of US$108 million has facilitated the earlier opening.

The Company has also benefited from the higher average gold price that has prevailed recently, such that the expected mine life has been extended from 9.5 years to 12 years.

We remain bullish on the Company and its stock. However, with the move in the stock price beyond our 12-month Target Price of $2.45, we are placing the Company “Under Review”, and expect to update our outlook shortly.

eResearch Blog: New Potential at Canadian Drug Development Company

2007-06-19T15:41:00.000-04:00

Mistral Pharma is an oral drug delivery company with a focus on developing lead products based upon branded pharmaceuticals using its targeted controlled-delivery technologies. The Company has one product ready to be launched in Canada, two products with clinical data, one in clinical development, and two others in the formulation and conceptual stage.

We recommend Mistral Pharma Inc. as a Speculative Buy for high-risk accounts. If the Company is able to capitalize on its exclusive licensing discussions for UniminTM, further advance four products in the pipeline, and be successful with its sales and marketing initiatives for its recently-acquired pain-management product InstillagelTM, we believe the shares offer above-average capital gains potential. We are maintaining our Target Price, as determined in our Initiating Report of August 10, 2006, of $0.10 per share, which represents more than a double over current share levels.

eResearch Blog: Augusta Resource Corporation

2007-06-19T09:03:00.000-04:00

Sumitomo Takes Significant Interest

Current Price: $3.08
52-Week High-Low: $3.50 - $1.86
Initiating Report Price: $2.08 (November 16/06)
Initiating Report Target Price: $2.90
Hi-Lo since Initiating Report: $3.50 - $1.86

Augusta Resource Corporation is focused on the development of its Rosemount Property that is located in Arizona. This is a large late-exploration-stage copper and molybdenum open-pit deposit that has silver as a by-product. The property is currently subject to a feasibility study. The Company’s shares are quoted on the TSX, AMEX, and the Frankfurt exchanges.

Last week, Augusta announced a non-brokered private placement for the sale of 10.7 million shares at $3.50 each, for total proceeds of $37.5 million. The funds are to be used to acquire capital equipment and also fund working capital through to receiving project financing at the end of the permitting process.

The key importance of the financing is the participation by Sumitomo Corp., which purchased 71%, or 7.6 million shares, which gives it a 8.7% interest in the Company. Two funds managed by Harbinger Capital Partners took the rest of the financing.

The stock started moving up in March hitting a high of $2.80 in May. From $2.60 last Thursday, it spurted to $3.50 on the Sumitomo announcement and closed at $3.08 on Friday, and is unchanged in early trading today. Volume also accelerated.

We are placing Augusta “Under Review” pending further analysis of the Company’s developing status.

eResearch Blog: Corporate Tax Rates

2007-06-19T08:55:00.000-04:00

Globalization has created greater tax competition. Countries have been competing aggressively for capital and skilled labour, both of which are highly mobile, by lowering tax rates. Over the past ten years, global competition has resulted in a significant reduction in corporate tax rates. The highest rate used to be 60%. Now it is 40%. In this period, the average corporate tax rate has fallen to about 27% from about 38%.

Britain started the trend in the 1980s when the Iron Lady cut her country’s corporate tax rates from 52% to 35%. This opened the European floodgates.

1987: Denmark lowered from 50% to 30%. 1991: Sweden went from 60% to 28%. 1992: Norway followed, from 51% to 28%. 1993: Finland joined in, going from 43% to 25%.

Germany and France held out, until recently. In 2000, Germany’s corporate tax rate was reduced from 40% to 25%, although combined federal, regional, and local rates were still a hefty 40%. Now, Germany has announced that the combined rate will drop to 30%.

France, under its recently elected president, has vowed to cut its corporate rate to 33%. Spain says that it will do whatever France does.

And North America? The United States maintains one of the world’s highest rates at 39%. However, it has stated that it will cut its rate substantially, and will do so soon.

Canada has a corporate rate of 34%. The present Canadian government has pledged to cut the corporate tax rate, over the next five years, to 30%. BIG DEAL!

If Canada is interested in attracting investment capital and highly skilled workers from abroad (or, indeed, preventing our own capital and work-force from going abroad), it is going to have to do a heck of a lot better than this.

Canada has always attempted to keep its corporate tax rate just below that of the United States. The sizable reduction expected to occur in that country will place enormous pressure on the Canadian government to follow suit, or we risk becoming a corporate back-water.

eResearch Blog: Another Moly Play

2007-06-14T12:59:00.000-04:00

eResearch has initiated coverage of Pacific Comox Resources Ltd. with a Speculative Buy rating, and a share price target of $0.20, compared to the recent price of $0.11. The stock is recommended for higher risk investors. Pacific Comox is a junior mineral exploration and development company with a molybdenum-copper property (Ryan Lake) near Timmins, Ontario and a gold-silver property (Mabel) in Sonora, Mexico. Several drill-intersected high-grade mineralization zones on these properties give investors exploration potential and commodity diversity. Ryan Lake drill results reported on June 6, 2007, intersected 0.13% molybdenum and 0.17% copper over 68 feet, with further assays expected to be released shortly.

eResearch was commissioned by D&D Securities Company to prepare this research report and, in conformity with the policies of eResearch and its strict independence, the views, opinions, Target Price, and Recommendation expressed herein are solely those of eResearch.

Early-Stage Uranium Explorer Offers Significant Upside Potential

2007-06-12T10:35:00.000-04:00

eResearch has initiated coverage on Mesa Uranium Corp. with a Speculative Buy Recommendation for risk-tolerant investors, and a 12-month Target Price of $1.10 per share, a potential 62% capital gain from the current share price.

Mesa Uranium is a Canadian exploration company that is focused on exploring for uranium in the Colorado Plateau. Mesa Uranium has three wholly-owned properties: (1) the Lisbon Valley Project, Utah; (2) the Moonshine Springs Project, Arizona; and (3) the Breccia Pipe Project, Arizona.

Its large land position in the Lisbon Valley Mining District is in an area that has already produced 85 million pounds of high grade uranium - U308. An October 2005 NI 43-101 report on the Lisbon Valley Project concluded there was good potential for further discovery of deposits but no data was available to permit an estimation of resources.

The Moonshine Springs property is located 2 miles from Denison Mines' 2.5 million pound uranium deposit.

Although we remain bullish on the longer-term outlook for the uranium industry, investors are cautioned that irrational investor enthusiasm could lead to over-valuations for uranium stocks.

Commodity Trends

2007-06-11T14:35:00.000-04:00

Despite indexes reaching historic highs, we remain concerned about the trend in the stock market. We highly recommend investors cull their portfolios of their more risky positions.

While timing in the stock market is everything, it is better to be safe than sorry. If you are going to continue riding this bull market, and it is difficult to argue with the higher levels being achieved almost daily, then you had best be nimble when the pull-back comes. For we think the drop could be swift and sharp, although perhaps not for long. Having a cash horde to put into over-sold stocks when the markets bottom out is the best way to be a real winner in the stock market.

In Canada, our stellar performance has been led by the mining and metals sub-index, which is up about 25%, followed by the telecommunications and the industrials indexes, both up about 20%. Energy comes next, up about 9%. In contrast, the S&P/TSX global gold index is down about 16%.

The mining and metals group has been led by strong and rising commodity prices, with historic highs being realized in many of them. How much longer can this go on without a break? We think the start of that break has now occurred. We believe that there will be softness in many, but not all, commodities over the summer months. We are not looking for a collapse. There is just too much pent-up global demand. But some “to-and-fro” could occur. Example: In 2006, China bought considerable copper up to about mid-year, then stopped buying and accessed its sizable inventory for its needs. Copper plunged about 35% over the ensuing six months. It then staged a remarkable recovery over the next six months, almost back to its historic high, when Chinese buying resumed.

Let us take a closer look at what is happening in the metals’ markets. Over the past six months, the GFMS Limited’s base metal index, which is based on the official LME cash settlement prices of aluminum, copper, lead, nickel, tin, and zinc, fell from 345 to 278 (down 20%), then rose to 378 (up 36%), and closed last week at 372 (January 4, 2000 = 100). Pretty volatile!
Aluminum reached a high of US$1.32/lb in January and again in February 2007. Over the past 60 days, the metal rose from US$1.27 to US$1.30 and then declined fairly sharply to its current US$1.22/lb.

Copper reached an all-time high of about US$3.80/lb in May 2006 and, as stated above, then collapsed. Over the past 60 days, it rose from US$3.22 to US$3.75, then dropped quickly back to US$3.20/lb.

Lead. Lead has been on a tear. Its all-time high is US$1.065/lb in June 2007. Over the past 60 days, it rose from US$0.875 to its recent high. It last closed at US$1.04/lb. Still going strong.

Nickel was the star performer, until June 1st. In the past year, it rose from US$7.50/lb to reach a high of US$24.20/lb, a gain of 223%. Since June 1 it has fallen 13%, and the bottom is not in sight. After such a spectacular run-up, a sharp pull-back should not be surprising. But we do not foresee a collapse. Just a normal retrenchment. Healthy and necessary.

Zinc reached its high of US$2.10/lb twice in November 2006 and, after the double top, fell to US$1.40/lb before rallying to US$1.85/lb. Over the past 60 days, the price of zinc has been on a see-saw. Starting at US$1.54/lb, it rose to US$1.85/lb (up 20%), then dropped to US$1.58/lb (down 15%). Currently it is US$1.66/lb.

Historically, all of the metals are near their five-year highs. The point is that there is likely to be increasing volatility in commodity price movements, with any unforeseen scare-event impacting investor confidence sharply.

The other global factor that has not been an issue for many years is the fear of rising inflation. This now seems to becoming into increasing vogue. The fight against this insidious destroyer of fixed-income existence is manifest in the recent round of interest rate increases, especially in Europe.

On June 7, 2007, the European Central Bank raised rates to 4%, and there is scuttlebutt that they will rise to 4.5% - 4.75%.

On May 10, 2007, the Bank of England raised its rate to 5.5%, but left it unchanged at its June 7 sitting. Pundits believe 5.75% is inevitable.

The U.S. is at 5.25%, with the general consensus being that it will not be reduced any time soon.

In Canada, the rate is currently 4.25%. The lower rate than the American reflects our superior recent economic growth, spurred on by demand for those high-flying commodities previously discussed. If inflation starts to rise, we can expect higher interest rates.

None of this is particularly sanguine for the stock market. The one area where we think there could be a rally is in Gold. However, recently, gold has not acted normal, or what hitherto has been “normal”. It is supposed to go up when the U.S. dollar goes down. Lately, it hasn’t. One reason for the poor price performance in gold recently has been sales by the European Central Banks. But that now seems to be over. We continue to think that any major global issue that suddenly occurred would give the expected impetus to gold.

We will leave a full discussion of gold to a forth-coming article.

Bob Weir
Director of Research

Wallbridge Mining: Strategic Alignment!

2007-06-11T14:30:00.000-04:00

Wallbridge Mining Company Limited was set up in 1996 to explore for and develop nickel-copper-platinum (PGE) deposits, with its focus being on the footwall rocks surrounding the Sudbury Basin.

The Company also explores for base metals and precious metals in northeastern Ontario and Nova Scotia. It tends to joint venture its projects.

The big news recently was the announcement that Lonmin plc, one of the world’s largest mining companies, is prepared to take a significant 18.9% share ownership interest in Wallbridge. For the past five years, Wallbridge and Lonmin have been joint venture partners in exploration activities in the Sudbury Basin.

The majority of the net proceeds will be used to advance exploration of Wallbridge’s North Range properties, on which Lonmin has an option to enter into a JV on those properties after the initial exploration is complete. Lonmin will also have a right of first refusal for five years on the Company’s other Sudbury area properties.

Wallbridge’s other significant joint venture partner, Xstrata Nickel, announced that it has committed its proportionate share of the $1.4 million Frost Lake exploration program, which calls for 5,000 metres of diamond drilling in the area of the Amy Lake PGE-copper zone.

After trending between 35 cents and 25 cents for months, the stock broke out in November 2006 and rose to 55 cents, and eventually reached 62 cents in February 2007. It then drifted downwards again into the mid 40s. With the Lonmin announcement last week, the stock went up on good volume. We believe the shares have excellent long-term potential.

Technically Speaking: By Stephen Whiteside - Publisher - TheUpTrend.com

The story for Wallbridge Mining's stock recently changed, as it looks like the long term downtrend may finally be over. Wallbridge was making lower highs and lower lows for the last couple of years. But now it is making higher highs, and higher lows, and has broken out above the long term downtrend line.

There may be another test of the recent lows down @ 38 cents, but a better bet is for a breakout to the upside in the next month or two.

Premium Exploration: Target Price Raised on Divestiture

2007-06-06T16:17:00.000-04:00

Premium Exploration Inc. has announced it has reached an agreement with Beartooth Platinum Corporation to divest up to 80% of its Chrome Mountain PGM Project, located in the Stillwater Complex in Montana. Beartooth must spend on the Project US$3 million by the end of 2009 to gain a 50% interest and a further US$2 million by the end of 2010 for an additional 30%. Premium will receive a 1% NSR.

This transaction frees up capital for Premium to re-allocate towards its numerous exploration opportunities in Mexico where it is focusing its attention.

Our Target Price is raised 5 cents to $0.60. As set out in our Update Report of May 28, we maintain our Speculative Buy Recommendation.

This and other reports are available on our website at www.eResearch.ca.

Looking for More than a Two-Bagger!

2007-06-04T11:24:00.000-04:00

Analysts Nigel Heath, BBM (Accounting, Finance) and Bob Weir, B.Sc., B.Comm., CFA , have prepared an Analyst Commentary on Metco Resources Inc..

Metco Resources Inc. recently released several announcements:
(1) It has entered into a letter of intent to purchase the remaining 50% interest in the Galinee Property from IAMGOLD Corporation. Since Galinee is one of its largest, and lying contiguous to the Du Dome-Matagami property, this increased ownership allows Metco to consolidate its land position in the Matagami Mining Camp. We view this as a modest positive development for the Company overall.
(2) Metco also announced it fulfilled is obligation under its option agreement with SOQUEM Inc., and acquired a 50% interest in the mining claims of the B6-20 property , which further consolidate its land position in the attractive Matagami Mining Camp .
(3) Metco retired all of its remaining outstanding convertible debentures, with the issuance of 1,314,933 common shares at $0.1209 per share to the Solidarity Fund QFL (the holder of the convertible debentures).
(4) On May 31, 2007, Metco announced it began drilling on the Grevet A block of the Grevet-Mountain property. This property is held in a 50:50 joint venture with Breakwater Resources Ltd. in the Lebel-sur-Quevillon Mining Camp. Metco has commenced a 2,000 metre drill program consisting of ten holes.

eResearch released an Initiating Report on Metco on March 15, 2007, with a Speculative Buy Recommendation, and a Target Price of $0.25 over the next year. We maintain these goals as we continue to monitor the Company's development.

We are looking ahead to (a) the completion of two pre-feasibility studies towards the end of June, and (b) future results from Metco's active drilling programs before reassessing the stock and its potential.

This and other reports are available on our website at www.eResearch.ca.

Starbucks and Stock Prices

2007-06-01T09:53:00.000-04:00

STARBUCKS and STOCK PRICES

eResearch is pleased to provide an article written by Edmond G. Eberts of RAPPORT Capital Formation Strategists Inc.

The theme of Mr. Eberts latest epistle is that CEOs must be mindful that the stock market has a long memory and that they should learn from and avoid the mistakes of the past. “It is crucial that senior executives make the right moves, or they risk being put into the penalty box until long after the game is over.”

As Mr. Eberts says, “Investor confidence in the future would be greater if the shareholders had a respectable research analyst’s report in hand and/or occasion to meet with the CEO and confrères.”

“Although prudence and diligence are virtues, there is a high price to pay by investors and issuers alike by waiting for every last detail to fall into place before making a move. … This is especially true for companies lacking in research analyst sponsorship and news coverage, …”

We could not have said it better, Ed. So many times we have been told by companies that they do not want to initiate coverage until they have ‘got the contract signed’, or ‘received the results of the current drill program’, or ‘issued their quarterly results’, etc. Why would any investor buy shares of a company AFTER the news has been disseminated? They wouldn’t; in fact, if the news is so good and the shares are up dramatically, they would probably be a seller. Investors want to know about a company and its prospects BEFORE the news is made public.

As Mr. Eberts says, “Although many individuals are willing to respond on short notice, institutional investors have a habit of being relatively cautious before reacting.”

In his article, Mr. Eberts points out that Starbucks is an incredible marketing machine that “conjures and sells café romance to ever-growing hordes of people around the world, …” The company has a winning formula, and it exploits it effectively and continuously to achieve its boundless success. “Like Starbucks, CEOs should do whatever it takes to accelerate the process” of gaining investor confidence and satisfaction.

Mr. Eberts is interesting to read, thought-provoking, challenging, and always entertaining.

We hope you enjoy the article. You can access it by pasting the following into your browser: http://www.eresearch.ca/_report/Starbucks_053007-I.pdf

Ironhorse Oil & Gas Inc.

2007-05-28T17:24:00.000-04:00

Ironhorse Oil & Gas Inc. (TSX-V: IOG)

Current Price: $1.65
52-Week High-Low: $3.39 - $1.50
Initiating Report Price: $2.00 (Jan 16/07)
Initiating Report Target Price: $2.60
Hi-Lo since Initiating Report: $2.00 - $1.54

Ironhorse Oil & Gas is an exploration and production company operating in Alberta and Saskatchewan. The Company has producing properties in the prolific Pembina region, specifically in the Nisku Formation.

The Company issued its 1Q/07 results on May 25th. Regarding production, barrels oil equivalent (boe/d) of 421 increased 74% over 4Q/06 and 2000% over 1Q/06. Higher production reflected the bringing on of new wells from the Shackleton field. Price per boe was down 8% from 4Q/06, but the significantly increased production resulted in a 55% increase in revenue. The net loss for the quarter narrowed to $181,000 from $208,000 in 4Q/06.

For the year as a whole, we believe that production could reach 650-700 boe/d with an exit rate of 800 boe/d. Further significant increases are anticipated for 2008 with new wells expected to come on stream.

The stock has not performed well since the release of our Initiating Report on January 17, 2007. However, since the beginning of March, the shares have pretty much traded in a band between $1.60 and $1.70. This extensive base-building possibly bodes well for an extended recovery.

We are maintaining our Speculative Buy rating for risk-tolerant investors and our share price target of $2.60.

Global Brokerage Accounts

2007-05-28T17:10:00.000-04:00

Global Brokerage Accounts

It is becoming increasingly easier for an investor to open a brokerage account in other (foreign) markets. Around the world, both local banks and brokerage houses have been setting up the capability for on-line stock services to permit the buying and selling of stocks.

In the United States, American investors have watched enviously as many foreign bourses have significantly out-performed the U.S. indices. This trend has accelerated in 2007 as, to date, the Dow is up only 8%, the S&P 500 7%, the Nasdaq 6%, and the Russell 2000 5%. Meanwhile, Frankfurt is up 17%, Mexico 16%, Seoul 15%, Sydney 11%, and Paris 9%. The winner is Shanghai, up 56% year-to-date! No wonder Mr. Greenspan said such performance is “clearly unsustainable”.

Until recently, the only way U.S. investors were able to buy foreign stocks was via American Depositary Receipts (“ADRs”) that were quoted on a U.S. exchange. These tend to be, of course, the largest companies. Which denies the investor the opportunity to take advantage of the myriad of smaller-sized firms whose stock prices have, in may cases, significantly outperformed the bigger companies. The smaller companies also represent a purer play on the specific foreign economy.

Things have changed. Now, in Hong Kong, Boom Securities allows foreign investors trading access to every major market in Asia. In Cairo, EFG-Hermes provides on-line trading facilities, in English, in both Egypt and the United Arab Emirates. In Gibraltar, investorseurope provides investors with on-line access to many European markets.

The proliferation of internet services has made all of this possible. Since there are no regulatory rules on where a U.S. investor may open an account, only that income and capital gains be reported, increasing use of overseas accounts is opening up new investing opportunities (and commensurate risk).

Investing is fraught with risks, perhaps more so in foreign markets. There are currency risks, the likelihood of more government interference, less stringent accounting standards, and difficulty in getting timely and accurate information.

However, there is no denying that global brokerage activity is on the upswing. There are some U.S. firms that are focusing their efforts on expanding their clients’ access to foreign securities. E*TRADE Financial Corp., the parent of E*TRADE Canada, our distribution partner in Canada, intends to launch a new global-trading website later this year that will allow its U.S. clients to buy and sell stocks directly on six exchanges.

EverBank Financial Corp.’s EverTrade Direct Brokerage unit now offers telephone-based trading in approximately 20 markets for a flat US$50 per trade.

The increasing globalization of commerce and industry is now occurring in stock market trading. Caveat emptor.

Target Price on Premium Exploration Raised

2007-05-28T17:09:00.001-04:00

Toronto, May 28, 2007 – eResearch analysts, Nigel Heath BBM (Accounting/Finance), CFA and Bob Weir, B.Sc., B.Comm., CFA have written an Update Report on Premium Exploration Inc. (TSX-V: PEM). Premium Exploration is a junior Canadian precious metals exploration company with activities in Mexico and the United States.

The Analysts conclude: “eResearch continues to recommend the shares of Premium Exploration Inc. as a Speculative Buy. Our revised 12-month Target Price is $0.55 per share (previously $0.30 in our Initiating Report of October 3, 2006). ”

In the Report, the Analysts state, “Premium’s strategy as a prospect generator gives management the opportunity to evaluate a pipeline of “pre-qualified” projects in Mexico, and take ownership when appropriate. This approach provides investors with a greater exposure to viable exploration opportunities and, therefore, a greater potential for value creation.”

The Analysts go on to say, “This little-known junior mining exploration company has yet to prove itself. We believe it has considerable potential given the promising mineral properties in Mexico, and also in Montana.”

Premium Exploration Inc. paid eResearch a fee of C$17,500 + GST to conduct research on the Company, on an Annual Continuous Coverage basis.

eResearch, which prepared this Press Release, is Canada’s primary source for independent, quality, investment research, focused primarily on small- and mid-cap companies.

eResearch Issues Initiating Report on Jet Gold Corp.

2007-05-25T11:21:00.000-04:00

Toronto, May 24, 2007 – eResearch analysts, Beverly Brooks, MA (Economics), MBA, and Bob Leshchyshen, B.A., MBA, CFA have written an Initiating Report on Jet Gold Corp. (TSX-V: JAU). Jet Gold is a junior resource company with coal properties in northern British Columbia, gold properties in Canada and Myanmar, and oil and natural gas properties in Texas.

The report’s Highlights state the following:

· The Company’s main focus is its Naskeena coal project in northern B.C.
· A NI 43-101 resource estimate on Naskeena is expected later this year.
· The historic resource estimate on Naskeena is 240 million tonnes: high carbon; low ash; low sulphur.
· Production start-up at Naskeena has not yet been determined.
· Texas oil & gas interests now generate moderate revenue.
· Gold exploration activities in Canada and Myanmar are still at an early stage.

Independent Equity Research

2005-08-19T19:16:00.000-04:00

Who is eResearch?

eResearch is Canada’s primary source for independent, quality, investment research, focused primarily on small- and mid-cap companies. Our focus is on identifying interesting, under-valued, under-covered, and over-looked companies that have interesting prospects, sound management, and significant potential for share price appreciation. We provide the investment community with a consistent, quality source of information and analysis, which has the potential of reaching up to approximately 6 million global investors through our distribution networks. Clients include institutional and retail investors, investment dealers, limited market dealers, and corporations.

eResearch does not trade in the securities of the companies it covers, nor does it accept any stock related compensation for research services. eResearch does not engage in trading, retail or institutional sales, underwriting, or corporate finance activities, nor does it conduct investment banking or investor relations services for the companies covered. Our sole business is the provision of independent research.

At the present time, eResearch provides comprehensive research on more than 125 Client Companies. Through an arrangement, we provide technical and graphical information on an additional 120 large-cap companies and income trusts. We have 25 knowledgeable and experienced analysts available to cover almost any company in almost any industry. We are a complement and supplement to, rather than a replacement or displacement of, street-generated research.

To subscribe to our services, contact www.eresearch.ca