Friday, February 29, 2008

Canadian ABCP Rescue Plan in Even More Disarray

The group that's trying to restructure the $33-billion in frozen asset-backed commercial paper confirmed that the plan will be delayed until the end of April, "as details of the plan, such as participation by Canadian banks, have yet to be nailed down amid crumbling credit markets.". BMO has reported that is it pulling out. CIBC keeps reporting bigger losses.

Nobody here is surprised. The deal is suffering the same fate as its even more troubled American counterpart Super Fund announced last year and never heard of again. The American plan also had comitted funds from the largest US banks, which we know, have no funds.

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Friday, February 8, 2008

Noront, Deal of a Lifetime

Noront spiked today, yet again.

McFauld's Lake, McNugget, it's all McEwen. Robert McEwen is is scooping up in shares and warrants in both Noront (NOT.v) and McDonalds (BMK.v). In the case of NOT, he gets shares at $4, plus warrants at $5.

After the BMK announcement was made last October, the shares jumped to over $1, to then drop to the current $0.60. Perhaps the same will happen with NOT, which spiked up today and made many here happy.

My approach with these is to keep a small core position and keep trading in and out to reduce the ACB. So far, so good, I have likely reduce ACB by about 50%. The stocks are highly speculative and you get many chances to get in and out. Other holdings in the area: FWR.V and FNC.V


Each unit was priced at $4.00 and consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of Noront at an exercise price of $5.00 for a period of two years from the date of issue.

Bought by Rosseau Asset Management; Pinetree Capital Ltd.; Robert McEwen, President, Evanachan Limited; Pierre Lassonde, Chairman, Franco-Nevada Corporation; Sprott Asset Management; and Northfield Capital Corporation


Gross proceeds of $10,000,000, through the sale of 25,000,000 units of the Company. A total of 15,625,000 units of the Company will be sold on a "hard dollar" basis (the "Hard Units") at a price of $0.40 per Hard Unit for gross proceeds of $6,250,000. A further 9,375,000 units of the Company will be sold on a flow-through basis (the "FT Units") at price of $0.40 per FT Unit for gross proceeds of $3,750,000. Each Hard Unit will consist of one common share and one common share purchase warrant (the "Hard Warrants"). Each FT Unit will consist of one flow-through common share and one-half of one non flow-through common share purchase warrant (each whole warrant an "FT Warrant" and collectively, with the Hard Warrants, the "Warrants"). Each Warrant will entitle the holder thereof to acquire one common share at a price of $0.50 for a period of 24 months from the date of issuance.

Bought by Sheldon Inwentash - Chairman & CEO, Pinetree Capital Ltd., Robert McEwen - Chairman & CEO, US Gold Corporation, Pierre Lassonde - Chairman, Franco-Nevada Corporation, and Randall Oliphant - Chairman, Western Gold Fields Inc.

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Monday, February 4, 2008

Food Inflation, More Packaging, Less Product: An Opportunity

When was the last time you bought ice-cream at a supermarket? The vast majority of ice-cream vendors have reduced their size from 2L to 1.65L, but have blatantly kept the same price. This is not just Nestle, it has happened with most brands. Most likely this is to cope with the rising cost of milk and inflation, which we have discussed here so many times.

So, who makes ice-cream packaging? There is someone who might be doing well in the future.

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Saturday, February 2, 2008

ABCP Woes: Coventree Shutting Down

With regards to the troubled $33B in frozen Canadian ABCP, Coventree lost a competition to administer the restructured non-bank asset backed commercial paper in Canada, and will likely have to wind up its operations as a result.

Coventree says its revenues are no longer expected to cover expenses, and its administration business is no longer viable: "the range of options that remain under consideration are limited and will likely involve, among other things, the orderly windup of the company's operations pending implementation of the restructuring plan".

Coventree ( was trading at $0.86 Friday.

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