PROACTIVE CANADIAN NEWS SUMMARY: NovaGold Resources, Nexen, CNOOC, TransCanada Corp., CN Rail, Madalena Ventures, Rathdowney Resources and more
Toronto's main market was moderately higher Tuesday, amid a mixed batch of earnings reports and as traders took in the G-7 statement that said it would not target exchange rates as it attempted to ease worries of a worldwide “currency war”.
In metals and mining news, NovaGold Resources Inc. (TSE:NG) Tuesday posted net profit of $67.6 or about nine cents per share as it benefitted from the spinoff of its copper assets last year. The Vancouver-based company, which is in the development phase and not producing sales revenue, had $253 million in cash and equivalents as at its year end.
In the energy sector, Nexen (TSE:NXY) advanced 2.12% after it announced that it has cleared the last regulatory hurdle in a $15.1 billion takeover agreement with China’s CNOOC, as the Committee on Foreign Investment in the United States (CFIUS) has approved the deal.
Elsewhere in energy news, shares of Surge Energy (TSE:SGY) rose over 4% on Tuesday as the company said it saw a sharp rise in reserves last year, as well as 21% growth in production per share and a 31% jump in cash flow per share. The oil and gas company has interests primarily in Western Canada and the Northern United States.
Meanwhile, TransCanada Corp. (TSE:TRP), North America's largest natural gas shipper, Tuesday posted fourth-quarter results that missed estimates amid outages at its power plants and lower pipeline contributions, sending shares down almost 1.4% in Toronto.
Epsilon Energy (TSE:EPS) shares rose after it said its board has hired a financial advisor to lead the process of soliciting and evaluating offers to acquire the company. In November, the company announced the start of a strategic review process to maximize shareholder value.
In other Canadian corporate news, Canadian National Railway (TSE:CNR) (NYSE:CNI) Tuesday said it is suspending the feasibility study for its proposed rail line and terminal handling facility to serve the Quebec/Labrador iron ore range.
On the earnings front, traders will take in reports from resource giants including Talisman Energy (TSE:TLM),Cenovus Energy (TSE:CVE), gas giant EnCana Corp. (TSE:ECA) and Barrick Gold. Outside of the resource sector, Telus Corp. (TSE:T) and Rogers Communications (TSE:RCI.B) will also hand in results.
In analyst notes, Casimir Capital analyst Stuart McDougall Tuesday kept his speculative buy rating on Scorpio Gold (CVE:SGN), but lowered his price target, saying the gold miner provided "unexpectedly light guidance", necessitating a more conservative approach.
The gold company recently provided 2013 guidance for its 70 per cent owned Mineral Ridge heap-leach gold mine in Nevada, expecting to produce 32,000 to 35,000 ounces of gold - essentially unchanged from 2012. The forecast is also well shy of the 65,000 ounces Casimir had expected, reflecting "far less aggressive throughput assumptions", and to a less extent, lower than expected grades.
Madalena Ventures (CVE:MVN) has made Mackie Research's one of two top picks in the energy sector for 2013, with the broker saying the junior oil and gas producer has been oversold on political uncertainty in Argentina.
The junior oil and gas exploration and production company has an interest in three blocks covering 280,077 gross acres in the prolific Neuquén Basin in Argentina. In Canada, it has a large, focused, core area within the Greater Paddle River Area, with 153 net sections of land and a large inventory of horizontal development locations.
Analyst Bill Newman, who has a buy rating and a $2.15 target price for Madalena, says the company's stock has been severly impacted by the nationalistic policies enacted by the Argentina government in early 2012.
He notes, however, that by late 2012, the political environment began to improve, yet Argentina-focused Madalena's stock remains oversold.
Industrial Alliance Securities backed its speculative buy rating and raised its price target on Nemaska Lithium (CVE:NMX), after the company announced plans to build and operate a 500 tonnes per year lithium hydroxide phase 1 plant, separate from the Whabouchi project that is advancing through regulatory permits.
In other junior resource sector news, Rathdowney Resources (CVE:RTH) shares moved higher Tuesday as the zinc explorer starts to grab investors' attention, with more upside expected from the company's Olza project in Poland.
Its stock gained more than 6.5% to 49 cents on the TSX Venture Exchange this afternoon, up more than 11% in the last six months.
The Vancouver-based company was last month added to Dundee Securities' watch list for this year, with a buy rating and no set target price, citing further resource potential in Rathdowney's Polish properties.
Manitok Energy (CVE:MEI) on Tuesday issued 2013 guidance, saying it will spend $71 million in 2013 and expects to exit the year with about 5,300 to 5,500 barrels of oil per day (boe/d) at about 65 per cent oil and condensate.
Shares of Nouveau Monde Mining Enterprises (CVE:NOU) jumped Tuesday after the company said it acquired from a prospector six groups of claims in Quebec from where rock grab samples returned up to 19.25% carbon graphite during initial due diligence.
The claims are located within a 50 km radius in the Matawinie region, north of St-Michel-des-Saints.