Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.
Vivian Lewis, editor of Global Investing, chose DryShips (NASDAQ: DRYS) as her favorite stock for 2007, which rose 126% as of 6/1/07. Here is her original recommendation on DRYS and her current opinion on the stock.
Now, she explains, "For a new pick for the second half of 2007, how about a copper company from Canada reviving an old mine in Baja California, Mexico?" Baja Mining (TSE: BAJ) is her current strong favorite.
"Baja Mining got a definitive feasibility study of its Boleo Project in Mexico, and it is lovely. Based on a presumed copper price of US$1.50/(metric) tonne, and cobalt at $15/pound and zinc sulphate at $1,200/tonne, the average cost of produced copper, net of byproducts, would be minus 7 cents/lb.
"Proven and probable reserves are sufficient for a 25-year mine life, with 275 million tonnes of measured and indicated resources grading 1.77% copper equivalent, and a further 250 million of inferred resourced grading 1.29% copper equivalent.
"These huge reserves mean that the project will have an after-tax indicated rate of return of 24.7%, or 46% at current market prices for the metals. The net project value at an 8% discount rate is $700 million, or $2.3 billion at current market prices.
"The project, on the east coast of Baja California Sur near the town of Santa Rosalia, contains seven mineralized stacked seams dipping east to the Sea of Cortez. It consists of about 11,000 hectares of mineral concessions and 7,000 hectares of surface occupancy rights, each assembled as a contiguous titled block.
"The project is in the 'buffer zone' of the El Vizcaino Biosphere, a Mexican National environmental reserve. An Environmental Impact Manifest was submitted in early 2006, and approved by the Mexican authorities in December. Baja also received authorization to commence development of the project within the biosphere.
"Geo-technical drilling and trenching is currently being conducted at the future sites of the process plant, the marine dock and tailings dam under the direction of Klohn Crippen Berger, Vancouver, BC. Strong support of the Boleo Project has come from the Bay Street financial elite, including project finance lenders and metal off-take parties.
"Baja's advisor, Endeavour Financial, prepared an Information Memorandum to be distributed to commercial banks and other potential lenders immediately. Offers of bridge financing received already will allow project development to go ahead without being delayed by the main financing process.
"Endeavour, Baja's financial advisor, commented, 'The DFS confirms the robust economics of the Boleo Project and supports considerable debt capacity. There has been very strong interest in the Project from the commercial debt market and metal off take sector, and we look forward to working with Baja in completing the financing of the project in the shortest timeframe possible.'"
See all 20 stocks the advisors picked for the second half of 2007.
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