Archive for October, 2009

FREEWEST Update, Conversation with MAC 10/29/09

October 29, 2009

FREEWEST RESOURCES CANADA INC.

[Based on my discussion with Mac 10/29/09]
Freewest’s stock is outperforming Noront’s again this week .Considering Noront has
made an official 4::1 offer for Freewest. Of course with FWR.V trading at .51, and Noront at 1.91,
the market is skeptical of the offer and valuing FWR higher than NOT, and so the offer is passe. THAT WAS LAST WEEK.
This week FWR is trading at 49 and Noront at 1.65, so the discount off the offer is increasing.

Evaluating who owns what its clear that CLIFFS, FREEWEST Insiders, FREEWEST Institutional Holders plus the FREEWEST Rebels hold as Mac agreed, “way more than 51% of the stock.” I think that understanding makes the Noront offer a fools journey, with no more need being said of it.

Speaking of the relative land position of each [ Noront has 4X as much as FREEWEST ],
Mac reminded me that FREEWEST had its choice of what it was going to claim and passed up much of what Noront currently holds, picking the “GOOD STUFF”. This might explain why FREEWEST has
the Lion’s Share of the economic, strategic and logistically feasible, shipping tonnage in the RING of FIRE. He said at this point there is no other resource that anyone would build infrastructure to extract except that controlled by FREEWEST, at this time, in his opinion. Basically we both felt that this was an attempt by Noront to obtain by a sad offer what they failed to obtain by honest work on their own.

Basically he said, FREEWEST wants to explore and EXPLORE MORE and the Noront attempt at an offer is a short term distraction, save any other developments. While rumors abound concerning VALE, BHP, XSTRATA and RIO TINTO, soveign funds were not discussed today, but while FREEWEST is not pursuing other bids, they could still well be in play. I pointed out that
public comment said NO OTHER BIDS FOR FREEWEST were forthcoming was FALSE, since the market bids were considerably in excess of what Noront had to offer, reprsenting a 20% premium over Noront’s offer and far and above any backwards arbitrage differential. Further what tells the story is that Noront continues to trade at the days lows, and FREEWEST, at or near the day’s highs.

From a prospectors view, it was Mac’s opinion that the current Noront does not have what it takes to get development going in the RING of FIRE, as I added that Noront did not want to do anything involving their own cash..

While we discussed other issues, such as a takeover of Noront, they were not really relevant to what is happening now. What Mac did emphasize is the continining close coordination and partnership with CLIFFS, and CLIFFS aid and material assistance in both finance and logistics. I would infer here that CLIFS has no intention of letting anyone in what they must see as their “own backyard”.
DG.
Denaliguide & Associates, have long positions in FREEWEST.

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More Inspiration, this one is a show stopper

October 26, 2009

Show Stopper

If the bashers thought they were out of sorts before, I cannot imagine their reaction now !

I have no expectation of this today, tomorrow or next week, maybe even not next month, but it is POSSIBLE. The stock dynamic is creating the projected objectives, so what can I say !

Good Luck

Part 2, Tactical Update and Strategic Review – charts

October 26, 2009

Lets go back and review whom is in this deal. On the one side we have FREEWEST, CIBC and CLIFFS, whom I personally have
no questions or reservations about.
On the other side we have Noront, Rosseau Asset Management, Irwin Warren and ROTHSCHILD Inc., all of whom I have
the deepest and most serious reservations about, and questions that
cannot even begun to be asked, let alone answered.

Mac and crew at FREEWEST have brought stockholder value time after time.
Their integrity is unquestioned.

Sadly putting Noront’s crew in charge of FREEWEST’s assets would be tantamount in methaphor
as to putting Goldman Sachs in charge of the US Economy, IMO.

The ways and means Noront, Irwin Warren et al i.e. Rossea Asset Management Ltd, and ROTHSCHILDS Inc. have used to “attain value”
leave questions in my mind, as to what their basic skillset is besides financial manipulation. Richard Nemis, like him or not, is a miner.
So far, FREEWEST has all it needs and good financial management in addition to deep pockets on the part of CLIFFS.
Its clearly apparent Noront wants and NEEDS what FREEWEST has, and has more confidence
in FREEWEST’s assets than its own land position. So far Noront has only “commodity” finds that put it into competition
with many other mining companies rather than FREEWEST who has the
desired CHROMITE tonnage. Noront’s chromite tonnage and qualities do not compare well with FREEWEST despite their protests.

Reading all that is out there, its clear that the only ones with anything to lose here,
are the FREEWEST Stockholders that tender their stock for this offer. It wont be me.

The markets are giving FREEWEST a “thumbs up” and Noront a “Thumbs down” sign.

A number of comment concerned Mac’s options or lack of them. From my outsider’s viewpoint, he still has lots of
ways and means to enhance our stocks value. Take all the corporate tactical moves you have
ever heard of, and apply a few of them to this situation, and you will see that many possiblities are open now. I have left the specific’s I have in mind out of this post until we see what MAC has in mind by Wendesday’s response
FLAG FORMATION
Note the volume dropping in the FLAG formation, and also notice the Mid Bollinger Band at .425 cents

Now here is a differing view on the Point and Figure and notice that the reversal level is also 42 cents;
Different Point & Figure

You also note that this P & F chart carries an upside projection of 1.56, rather than 1.23, which is not terribly material, as the momentum is quite upbeat,and the retrench level seems to be not much lower than 42, rather than entering the gap as some have suggested. IMO, “Discovery Style Patterns” bounce off their gaps if there is a true discovery that will propel the stock skyward.
Again, IMO, this is the case here.

As interpreted in classical gap analysis, this stock has the 3 requirements for a BREAK-OUT WINNERS A/ Gap Breakout ; B/ Strong Upside Volume propelling advance; C/ News Forthcoming Supporting future value in the stock.

Rather than boring you with any more narrative, I’d say the stock is strong and tells us to hang tough and see more good stuff coming down the pike. Understand, this is what the smart money knows, and can be changed at any time by stupidity. Again, I am a shareholder so I do believe that FREEWEST is full of value, but also think I can clearly portray some facts and issues.
AS, IF, an WHEN I have more to share, I will make it available.

So far we have Noront’s word this is a good deal, and Mac’s word its a BAD Deal, take your choice

DG

Tactical Update, Strategic Review FWR vs. NOT

October 25, 2009

To start out on a even keel, as a FREEWEST shareholder, it would be normal to have some bias in their favor, since given all the investment choices, I choose them. I freely admit to that. HOWEVER, I think I can provide some clarity and that is what I hope to share in these updates.

Working from what we know, I include content from a poster on Stockhouse, paraphrasing it so to avoid issues. If said poster contacts me to disagree, I will delete this content.

HIS SHORT TAKE IS THAT ANYONE SELLING FREEWEST SHARES IS GETTING SCREWED.

“Resource Wars” reply on Stockhouse

Anyone can see why Noront made the bid

1. They want and like FREEWEST’s Properties

2. This property is better than theirs is, in their eyes or they would not spend their money on this attempt at an offer

3. This then tells that they see more value in spending dollars there than on their own extremely extensive holdings.

4. One explorer bidding for another explorer does it from a position of knowledge [since they are JV partners ] that what Freewest has found is extremely rare in the mineral world.

5. They sense the undervalue in their JV Partners property and are bidding for it.

6. Noront is knowledgable in this area and commodity and wants to secure the item before others get wise

7. No matter the % they get, they can then deliver it to the ultimate winner when such offer comes. Teck did . And HBM did.

8. If they can get YOUR shares at under the ultimate take out price, they benefit, not YOU.

9. Noront could easily laugh all the way to the bank with their FWR shares after a higher 3rd party bid. No downside for them here – only for FWR holders that accept this bid.

Thank you to the author for his insights, you can see the full post on Stockhouse.

This info is part of the Initial Review.

Now, lets see what we know.

Noront wants Freewest. Freewest does not need Noront, nor does it want to be part of them.
Same for each and every shareholder response I read.

FREEWEST is run by miners and engineers with outstanding discovery records.
FREEWEST’s discoveries in the Ring of FIRE speak for themselves.
FREEWEST has spun off and provided shareholder value during its entire history.
FREEWEST’s major supporter CLIFFS, has approximately a 17% holding in FWR
if it decides to get all the shares at its exclusive disposal.
I dont yet know the total of all insider shares held by FWR BoD or Mgmt, subject to
further investigation.
However, if CLIFFS has up to 17% NOW, then the next deal is that it would take No More than 16% to be held by FWR stockholders and management to keep the company out of NORONT’s hands for now. Actually it might be better if WE, FREEWEST owned enuf NOT to put someone on their board and start the ball rolling to neuter the negative influences there [ opinion, not fact.].

Since I have not talked to FREEWEST over the weekend, I can only think they are rejecting the offer in Wendesdays circular. There are may routes potentially available to Mac & Co, so I wont be surprised by anything we see at that time.

Thats a skeleton view of what we know fundamentally.

What follows is my Technical Opinion on what the stock is showing us.
There is a strong resemblance btwn Noront’s discovery chart pattern and FREEWEST’s developing Discovery Pattern. Noront jumped up from the 20’s and ran to 48. We have bested that. It then jumped to 64 where it went thru prolonged bashing, and finally jumped over a buck. The picture begins to look quite similar here, now. I’ll save FREEWEST’s charts for a later post, but I now have a reasonable projection of $1.20 + , for the short to intermediate term. Some have seen it but I will post it again.
Typically in a discovery pattern, some will be reluctant to bid after a stock appreciates and will wish for a drop down into the gap, however since so many people are waiting for the same thing, and the sellers are few, even one anxious buyer, getting stock as it drops, will send it back up at the upper margin of the gap and a deep reaction WILL NOT occur, if the stock is well thought of and sought after. So anyone hearing the chatter of how those PATIENTLY WAITING are going to buy stock at the bottom of the gap, might observe whether it actually happens that way.
TOO MUCH ANTICIPATION by TOO MANY PEOPLE =’s WONT Happen !!

Next post, particpants and plays.

Stockhouse Post

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Fun & Games in the Ring of Fire

October 24, 2009

Rothschild Inc. Rosseau Asset Management, Irwin Warren, Patrick Anderson.

Yes the first is a household name. Not mentioned anywhere in the Noront Circular of the offer for Freewest Resources Canada Inc., EXCEPT on P.38, Item #3, “Background to the Offer: Line #10 : “Noront engaged ROTHSCHILD Inc. as financial advisor………….”

Did that set off alarm bells in my head ? ! ? For sure. Its never just the camel’s nose under the tent. Noting that NM Rothschild Ltd quite visibly and vocally left the gold biz in london 2 yrs ago, and that again, they publicly have “withdrawn” from active management, say in Anglo, one wonders where they have gone ? ? ? Not to wonder.

Now, the roster is complete IMO miscreants and stalkers, and such who will throw stockholders under a bus for $2.00 or less. Lets see who is on the NOT BoD.
Patrick Anderson ? Ah yes Aurelian CEO, who IMO sold investors down the river for Kinross. Hmmm. I dont have to go on about Irwin Warren, his actions speak loudly enuf for you to get the message. Now go on and read who else is either on the board or works for NOT and make up your own mind. The thing I noticed in the Offer circular is that NOT wants it both ways, can buy or not buy and will try to place someone on FWR’s BoD if if fails, IMO, which BTW, I think the offer is doomed.
Last time that was executed, NOT was vampirized, IMO, by the proxies from Rosseau Asset Management Ltd, the vehicle of Irwin Warren.

Strategically, MAC told them not just no, IMO, but “HELL NO !” and I think tactically we have two choices: Stay or GO. It seems to me that it will you will suffer an adverse Financial Health reaction if NOT gets any real amount of shares.
When and IF another offer is forthcoming, it may be better or worse than this one on the table, but THE Market Says FWR is worth LOTS MORE, with multiple upside projections in my TA.
Rather than guess I can tell you that at this time, MAC is unalterably opposed to anything more than a JV with Noront, and from that determination I expect will spring an other option, although I cannot even guess what it might at this time.

I can say, that in my experience, stocks in this situation and pattern, are indicating that they are capable of excellent price appreciation as the situation develops, which is, of course, IMO, the value that NORONT wants to swipe, at the expense of FREEWEST Stockholders.

I think a reasonable fear of FREEWEST Stockholders is the way many management types treat companies as their private ATM’s to withdraw cash on demand, and deprive the company of the vigor and value it could have. I feel this fear myself looking at NORONT and would prefer to hold FREEWEST singularly, rather than a merged company

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Clear Inspiration

October 2, 2009

No matter how crazy some of the point and figure charting is, I think this one cuts thru all the fog of the ups and downs and clearly defines a trend.

considering the ebbing of liquidity while cash is clearly flowing into ISM, I’d consider a validation of the above chart and its projected target and trend.

CLEARinspiration