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Friday, February 23, 2007


Roxmark Mines Temporary Sale

Roxmark Mines (RMKMF in the U.S. or RMKL on the CNQ exchange) has been hit by high-volume selling recently. News of a significant shareholder (92 years old and in poor health) selling up to 8.5 million shares for estate tax purposes on the advice of an estate planner explains this recent selling.

A press release from Roxmark Mines pointed out that “no director or officer (other than David Malouf in connection with his interest in Zinc Metal Corporation) intends to sell any of their Roxmark stock,” and “no directors or officers of Roxmark are permitted to purchase Roxmark shares until the above-referenced share sale has been completed.”

Late yesterday, this large shareholder put out a press release to verify that the sale of 8.6 million shares had been completed .

Now that that estate sale is out of the way, we believe the stock price will recover and Roxmark Mines will finally get the Toronto Venture exchange listing they’ve been waiting for. Considering that the chairman of the board and others exercised millions of warrants to buy shares at .17 over the past few months, this temporary sale has presented a rare opportunity for retail investors to get shares cheaper than the insiders.

The fundamentals of the company’s operations have not changed, and Roxmark’s home page has been updated with information on their ongoing programs:

Ongoing programs accelerate gold, moly development on two major fronts:

1. Up to 3,000 tons of moly were recently bulk sampled at Nortoba-Tyson and processed at the Company's Northern Empire mill for sale under contract to a European buyer. In 2007, Roxmark plans to implement an underground development program including drilling and bulk sampling (up to 6,000 tons) at Nortoba-Tyson as a precursor to preparing a feasibility study and development of the moly resource is expected to begin as early as Autumn 2007.

2. Systematic digitization of historic data of the Company’s other properties, including 3-D modelling of gold deposits in three major areas, is underway as the key element in prioritizing exploration program targets on these properties in 2007.

Despite this recent short-term setback in the stock price, we continue to believe in the long-term outlook for the company. "We believe Roxmark shares are likely to go much higher over the long run if things go as planned. We like the molybdenum giving them near-term revenue, the Toronto listing giving them more investors in coming months, and the huge upside with the gold properties."

Monday, February 12, 2007


Red Dog Temporary Zinc Surge Update

As we mentioned in December, "the world's biggest zinc mine, Teck Cominco's Red Dog in Alaska, had some delays in shipments in Q3, increasing their Q4 shipments significantly." We expected that "the effect of the Red Dog shipment spike will last into Q1."

Today, in their Q4 earnings report, Teck Cominco reported that 60,000 extra tonnes were sold from Red Dog in the 4th quarter vs. a year ago: "These sales volumes were 60,000 tonnes higher than the same period a year ago as poor weather at the port delayed loading in the third quarter, shifting some sales into the fourth quarter." "Sales of metal in concentrates are recognized in revenues when title transfers and the rights and obligations of ownership pass to the customer, which usually occurs upon shipment."

The 60,000 tonne one-time increase in Q4 (that had been shifted from Q3, which had a steeper than normal LME stocks downtrend) has been pretty well absorbed by the world zinc market the last few months, with only a slight blip up in LME stocks of about 15,000 tonnes during the longer term downtrend:

After factoring in the delay from the time Red Dog ships the concentrate to the time it gets refined sold into the market by the smelters, it seems the temporary surge from these delayed shipments should be nearing an end. Considering the effect of these delayed 60,000 tonnes, it appears clear that the underlying supply/demand deficit is still intact in the zinc market, despite what the zinc bears and the media may say.

As we stated last time regarding these Red Dog shipments and the temporary surge from the ending of Chinese export tax rebates, "After the short term surge in supply from these 2 temporary events is absorbed by the market, we expect zinc to remain very strong because of the dearth of sizable projects in the pipeline for the next few years combined with growing demand and depletion of reserves at existing mines. We believe the fears in the market that the recent short-term trend change in zinc LME inventories could indicate a permanent shift in the supply/demand situation are misguided, and we expect that to become apparent in coming months. If the downtrend resumes as we expect, we believe the only way the LME Zinc inventories will avoid complete depletion is with zinc prices increasing enough to curtail demand."


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