Rarely does this column feature stocks traded on the Toronto Exchange, but Northern Orion Resources (NNO CN ) is an exception. The Vancouver-based copper and gold producer expects to list on the American Stock Exchange in early 2004, pending Securities & Exchange Commission approval. Meantime, its buy of a 12.5% stake in the Bajo de la Alumbrera mine in Argentina has already yielded benefits.
Frank Holmes, chief investment officer at U.S. Global Investors (GROW ), says Orion is adding $100,000 a day in revenues. U.S. Global owns 7% of Orion. Holmes figures Orion, which posted cash flow of 11 cents a share in the third quarter, will see 15 cents in the fourth due to a spike in commodity prices. It logged earnings of 2 cents a share in the third quarter, up from a 4 cents loss a year ago. Now at 3, the stock should hit 9 in six months, says Holmes. He expects earnings to soar 500% in the next three quarters, in part from still-new deposits yet to come onstream. By company estimates, its new Agua Rica mine near Alumbrera contains more than 10 million ounces of gold and 18 billion pounds of copper.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial