Wednesday, January 17, 2007

Crystallex: KRY Treading Water

Crystallex International Corp (KRY), is a small gold miner based in Canada with current interest in Venezuela. It has been holding permits to mine over 13 million ounces of gold in the Las Cristinas property. But these permits have been wilting in the midday sun.

This stock's future rests entirely on the fickle economic shoulders of Hugo Chavez. Crystallex has the initial permits but is still waiting and waiting and waiting on the environmental go ahead. The NAV has flat lined around 2.70-3.50 for over 3 months, kept there with nothing but hope.

The current political environment has made this stock a day trader's dream. The term, (rocking chair), a stock rocking +/- due to non-internal pressures, allows one to profit many times a day.

Should the environmental and Chavezamental permits be granted, Crystallex will definitely takeoff. But, environmental attitudes are presently in chaos down there. Changes in cabinet, pressure from locals, and generally unpredictable decision making, have stalled the ongoing process. But this stall has kept the stock where it is at and not significantly lower.

If Chavez grants the environmental permits and allows foreign economic interests to displace the local "cottage industry", ie squatters, displace hill sides, and water sheds, the NAV should shoot up 3-7 Dollars, (85% +), overnight.

But before the champagne dries from the shirts of leveraged investors and a few Fidelity fund managers, take your money and run. Why? Copper prices have sunk. This mining region requires copper to be sold to subsidize operations.

This is a very speculative holding and I would give it 2-3 months to play out. Make sure you have a stop-loss in place. I own this stock.

Note: The stock picks I review will include long or short positions as well as duration. I may not always update a position change if the time duration was accurate in the original review. Some of the stocks I review I own in my personal account and will always state such conditions. This site is not intended to replace one's own due diligence in researching stocks nor is it a substitute for advice from your financial planner.

No comments: