Late November and December is a buyer’s market for small stocks. 

You can also see where junior resource stock portfolios (for the average retail investor) would be down 20% since the first of October and 40% from the start of 2012.

This would compare to the best of the TSX Venture down 7% since October 1^st and approx. 17% from the start of 2012.

…..read more HERE

Welcome to East Africa—home of a potential 28 billion barrels of recoverable oil, 440 trillion cubic feet of gas and 14 billion barrels of natural gas liquids.

Recent success by Africa Oil (AOI-TSX; AQIFF-PINK)—the stock went from $2-$11 in just two months in the spring of 2012 on just one drill hole – has made East Africa the most exciting exploration play in the world right now.

But that excitement is tempered with some political instability, social conflict and a lack of energy infrastructure.

Still, this vastly untapped region is the fast-rising favorite for Canadian juniors. The obvious question is: Why?

The potential prize is too big to ignore:

 ~5 billion in proven reserves in the Sudans and major discoveries elsewhere, with only a fraction of the potential explored

Enough gas has been discovered in Mozambique to supply half of Western Europe for nearly a decade and a half—still, the country has barely been explored.

Recent offshore discoveries of some 33 trillion cubic feet of gas put Tanzania on the map, and the risk here is relatively low. Tanzania has a natural gas processing plant on Songo Songo Island, with a 70 million cubic feet/day capacity. It is also planning an LNG terminal.

Uganda discovered more than 2.5 billion barrels of oil in the last decade. This year alone, it discovered more than 1 billion barrels.

The risks fall into three categories:

1.    A lack of infrastructure—pipelines, processing plants and refineries.  You can make a big discovery, but how do you get it to market and monetize it?

2.    Government greed.

3.    Social/tribal tensions.

Sudan is a good example.  Blessed with an abundant oil supplies, authorities recently announced that the country would double production in the next 2-3 years. However, it will miss its 2012 production target of 180,000 bpd due to social conflict.

Still, Canadian juniors like Calgary-based Emperor Oil (TSX-V: EM) and Statesman Resources Ltd (TSX-V:SRR) remain optimistic in Sudan.

Emperor Oil was a pioneer in Sudan, and recently signed an MOU to acquire 85% of a 50% interest in the 10,000 sq km concession Block 7 in Sudan. The other 50% is owned by the state’s National Oil Company, Sudapet.

“East Africa wants oil development,” says Emperor CEO Andrew McCarthy. “Infrastructure is an issue, though Sudan is in much better shape than most here.”

Infrastructure in this part of East Africa should improve in the coming years, with the big project being the $24.7 billion Lamu Port-South Sudan-Ethiopia Transit corridor (LAPSSET). LAPSSET includes a massive pipeline that would carry South Sudanese oil for refining in Ethiopia and Kenya and give the entire region another oil outlet.

Is it feasible? Yes, but capital is always difficult for this area, and McCarthy points out that the capacity of the Sudan-South Sudan pipeline could go to 1 million bopd at a fraction of the costs.  The good news—competition creates lower costs for everyone.

McCarthy added that the new wealth being created by energy companies is a strong incentive for the different ethnic groups in East Africa to work together.  He points to Sudan and South Sudan breaking apart peacefully, and any skirmishes after the fact have been stopped quickly once the oil—and hence the money—stopped flowing.

“Rather than fight over existing production they have chosen to expand their resource development so that there is a larger pie to share.”

Infrastructure is also the issue farther south in East Africa. Major energy producers are eyeing 130 trillion cubic feet of gas in the Rovuma basin offshore Mozambique, discovered by Andarko (US) and Eni (Italy). The government estimates there may be another 150 trillion cubic feet left to discover. Shell, ExxonMobil and Chevron are eyeing this as well.

But for now, there is no way to bring extracted gas onshore, no facilities to liquefy it and no infrastructure for export.

We’re talking about $20 billion in investment to build the necessary infrastructure.

And ironically, the phenomenal success of the some of the pioneering juniors causes another problem: the governments start changing terms.

Several years ago East African countries were luring foreign oil companies onto their territory with desperately attractive deals. This trend is changing. Recent reserve discoveries have empowered these nations to ask for more.

There is pressure on juniors to foot the bill for ambitious infrastructure projects. East African states want the juniors to speed up their plans—drill more wells; build pipelines—get the money flowing! It can put the juniors with limited resources in a difficult spot.

But again, The Prize is big enough that several juniors have been able to attract major oil companies into their play.

For its next licensing round in oil and gas, Kenya is planning to switch to bidding for exploration blocks, rather than its usual one-on-one negotiations. While more transparent, which is good for business, this also reflects the new impatience. Kenya is also planning to rewrite its energy policy to reflect its greater negotiating power as a result of recent discoveries.

In Uganda, potential is vast and exploration just getting underway, but regulatory challenges are mounting.

Uganda wanted its oil and gas investors to pitch in for a massive refinery in the western area of Hoima. For investors, it was an unnecessary project with unnecessary expenses. Foreign oil companies would rather see Uganda’s oil refined elsewhere, more cheaply.

With new exploration technology (FTG, 3D seismic) being used on relatively virgin reservoirs, there’s a lot of potential for big new discoveries. But there are definitely challenges for energy producers looking to move into this are.

However, the Size of The Prize trumps all—the huge capital gains enjoyed by shareholders of Africa Oil, and before them Heritage Oil (HOC-TSX), attest to that.

Investors should be watching this area to see who’s next.

– Keith Schaefer
Publisher Oil and Gas Investments Bulletin (click HERE or on the image below to read more)

P.S.  I’m almost ready to release the research on my newest play — and if you’re at all interested in capital gains plus dividends, you’ll find what I’ve uncovered extremely intriguing. In fact you may not believe the new dividend payout until you see it for yourself.  I’ll show you what I mean as soon as I’m finished my research, this week.

There are only a few people who get it: the era of cheap food is over.

Global net population growth creates over 200,000 new mouths to feed ever single day. Yet supply of available farmland is diminishing each year due to development, loss of topsoil, peak production yields, and reduction in freshwater supply.

Then there’s bonehead government policy decisions to contend with… like converting valuable grains into inefficient biofuel for automobiles. Paying farmers to NOT plant. Banning exports. Etc.

Of course, the most destructive is monetary policy. The unmitigated expansion of the money supply has led to substantial inflation of agriculture commodities prices.

These fundamentals overwhelmingly point to a simple trend: food prices will continue rising. And that’s the best case. The worst case is severe shortages. This is a trend that thinking, creative people ought to be aware of and do something about.

One solution is to buying farmland overseas. It provides an excellent hedge against inflation, plus it’s one of the best (and most private) ways to move money abroad, out of the jurisdiction of your home government.

In a way, overseas farmland is like storing gold abroad. But unlike gold, it produces a yield, ensures that you have a steady food supply, and even provides a place to stay in case you ever need to leave your home country.

So where are the best places to buy?

After travel to over 100 countries, looking at more properties than I can count, and investing in quite a few of them, I’ve come up with a few top picks that meet the following criteria:

• cheap land costs
• low operating costs
• highly productive soil
• low political risk (confiscation, regulation, market interference)
• foreigner-friendly ownership rules
• clear water rights
• climatic stability

Believe it or not, these simple requirements eliminate most of the world. Much of central and Eastern Europe is too politically risky. Western Europe and the US tend to be cost prohibitive. Most of Asia disallows foreign ownership of farmland. Etc.

But there are still several places that remain. I’ll share two of them:

1. Chile. No surprises, Chile ticks all the boxes. Land costs are very reasonable, and operating costs are low. The soil in regions 6, 7, and 8, is some of the most productive on the planet. And best of all, Chile has some of the clearest, most marketable water rights in the world.

Another great thing about Chile is its location; it’s counter-seasonal to the northern hemisphere, so Chilean harvests tend to come at a time of tighter global supplies, pushing up prices.

As an example, we’re currently harvesting blueberries at our farm in Chile’s 7th region. Global blueberry supply is tight in November, so the price we receive is 35% higher than if we were in the northern hemisphere.

See www.chile-farmland.com for more information, it’s a fantastic resource.

2. Georgia. This may be shocking to some, but Georgia is a stable, growing country that’s definitely worth betting on.

Putting boots on the ground there, it’s clear that Georgia is on an upward trajectory with a bright future, much like Singapore was decades ago. Taxes are low, and the country is open to foreigners.

In fact, the government realized that they have tremendously high quality farmland, yet limited expertise in farming. So while most nations shut their doors to foreigners owning strategic farmland, Georgia went abroad actively seeking foreigners to come to their country.

They hit the jackpot in South Africa, offering land, financial incentives, and even citizenship opportunities to South Africans who would move to Georgia and work the land.

Land costs in Georgia are very low; top quality crop land costs about $3,000 per acre, compared to $10,445 in Iowa, or $12,000 in California. Yet simultaneously, yields are very high for everything from corn to wine gapes to peanuts, on par with both of those states.

It’s definitely a contrarian agricultural investment worth considering.

Speaking of Chile…….

You won’t believe the opportunities here

The Chilean economy is booming right now. Full stop. From agriculture to retail to construction to mining. Everywhere you look, it’s happening.

This isn’t pretend economic growth, conjured out of thin air by central bankers who drop freshly printed currency from helicopters. It’s the real kind, brought about by increased production, greater exports, technological development, and fiscal discipline.

So far this year, for example, the Chilean government has posted a budget surplus of 1.7% of GDP, up from 1.4% last year. Unsurprising, Chile’s gross debt level is a paltry 11.3% of GDP, putting it in the same category as countries like Saudi Arabia and Estonia.

…read more HERE

There are few mining sectors where chemistry, metallurgy and the supply chain meet in such a complex yet potentially profitable way as rare earths. Companies must keep an eye perpetually toward the future, making prescient judgments about end-user demands and constantly evolving technologies. In this interview with The Critical Metals Report, Gareth Hatch, founding principal of Technology Metals Research and president and director of Innovation Metals Corp., gives an update about which projects are closest to production and which have the right recipe to entice customers.

The Critical Metals Report: Gareth, many investors have abandoned rare earth element (REE) equities either because equity prices have fallen dramatically or the path to profits is moGare complicated than other equities in the mining space. Why should investors remain here?

Gareth Hatch: The answer to that question lies in understanding the cycle that we are in, with respect to the ongoing development of exploration plays and their transformation into nascent mining operations within the next two or three years. Clearly, the vast majority of companies in this sector are not going to follow that path, as is true in every mining sector. Some of their projects will go into production; the vast majority will not, at least not anytime soon; and investors need to do their due diligence.

This is no longer a sector where investors should be looking for a five- or tenbagger. Investors have already sunk a lot of money into these stocks. In the long term, investors should focus on the technical side and follow the companies that are doing the right things. If investors are here and want to stick around, they should look for the companies that are going to go into full-blown mining and processing, the companies that are going to actually make metals and oxides and sell such material through offtakes and the like.

TCMR: What about this sector still remains unclear to many investors?

GH: Few investors have a real appreciation of the complexity of developing processes that turn attractive geological deposits into actual commercial-grade materials that can be sold. It is interesting to me that four or five years after the interest in this sector underwent a major uptick, people are still not really aware of just what it takes and the questions that they should be asking to determine the probability that projects will go forward. There’s a lot of fuzziness and uncertainty.

TCMR: What are some of those questions that investors should be asking?

GH: First, do you understand exactly what type of minerals make up the deposit? That will tell an investor the approaches that the company will need to take to recover, process and develop the metallurgy, the chemical engineering required for those minerals.

Second, investors need to understand exactly where companies are at in their development. What is the status of a company’s resource development work, its mine design and its environmental permitting plans for building infrastructure? Investors need to dig into the reports – the preliminary economic assessment (PEA), the prefeasibility study (PFS) and any other information that is published to assess how a company is addressing each of these areas.

Another critical question concerns the handling of radioactive materials that can occur in REE deposits. Companies need to address the issues of handling radioactive substances, regardless of how low the levels may be, instead of, in some cases, just brushing this off. Sometimes that only starts to get focus and attention as a company moves into the prefeasibility stage.

TCMR: What are some companies that have done a good job of communicating the answers to these questions?

GH: I think it is less about the individual companies and more about where they are listed. Canada has guidelines that require companies to put out high-quality, independently developed information, for example, into the public domain. For such companies, there really are no excuses for investors to not review this information, if it exists. And if it doesn’t, depending on where particular companies are at in the development cycle, investors should be asking themselves whysuch companies have not yet put out such reports.

Investors can look at companies that are much further along in development and that have put out a PFS or who are working on one –  Avalon Rare Metals Inc. (AVL:TSX; AVL:NYSE; AVARF:OTCQX), Quest Rare Minerals Ltd. (QRM:TSX; QRM:NYSE.MKT) or Frontier Rare Earths Ltd. (FRO:TSX), for example.

Companies like Matamec Explorations Inc. (MAT:TSX.V; MRHEF:OTCQX) and Tasman Metals Ltd. (TSM:TSX.V; TAS:NYSE.MKT; TASXF:OTCPK; T61:FSE) have done a good job of outlining the information at the PEA stage. They are not the only ones.

….to read page 2 click on the image below or HERE