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This Month's Tiny Gems - October 2010
CEL-SCI Corp. (NYSE AMEX: CVM)
Golden Star Resources (NYSE AMEX: GSS)
North American Palladium Ltd. (NYSE AMEX: PAL)
CEL-SCI Corp. (NYSE AMEX: CVM)
CEL-SCI Corp. (NYSE AMEX: CVM) is a biopharmaceutical company dedicated to improving the treatment of cancer and other infectious diseases by unleashing the power of the body's immune system. The company's flagship product is Multikine, the first immunotherapeutic agent being developed as a standard of care treatment for cancer.
The company's Multikine has been designated as an orphan drug by the US Food and Drug Administration (FDA) and has recently begun a global Phase III trial in advanced primary head and neck cancer patients. In earlier trials, the drug was shown to kill approximately 50 percent of tumor cells before standard treatments start. Multikine also renders residual cancer cells that survive treatment more susceptible to radiation and chemotherapy.
Multikine has several novel characteristics that will differentiate it from the present generation of cancer vaccines: 1) The drug can be used off-the-shelf, making large-scale manufacturing possible; 2) It offers both active and passive immunity, indicating that no outside antigen is needed; 3) The drug is administered to cancer patients when the immune system is strongest (before surgery, radiation or chemotherapy), which CEL-SCI has found to be the optimal time.
It is believed that Multikine may have the potential to be a billion-dollar blockbuster drug, but the company also has other drugs in the pipeline. CEL-SCI's other products are currently in various stages of pre-clinical development. CEL-2000 has shown promise as a therapeutic vaccine for rheumatoid arthritis. Initial tests in animals have shown that it may be more effective than Enbrel. CEL-1000, on the other hand, may be particularly suitable for development as a bio-defense agent.
Golden Star Resources (NYSE AMEX: GSS)
Golden Star Resources (NYSE AMEX: GSS) is a mid-tier, unhedged gold mining company which over its 25-year history has produced in excess of 2 million ounces of gold. The company has two operating gold mines in western Africa situated along the prolific Ashanti Gold Belt in Ghana. In 2009, production totaled nearly 410,000 ounces of gold from these two mines.
The company's goal is to grow its business in Ghana and other selected countries such as the Ivory Coast in western Africa. This is a wise choice and not only because of the richness of the Ashanti gold fields. Western Africa is one the most stable areas in Africa and suitable for business. Ghana is one of the most stable countries, politically and economically, in all of Africa.
Golden Star Resources' current strategy is to focus on exploration and expansion activities at the two mines – Bogoso/Prestea and Wassa/HBB. Its 2010 exploration budget has been raised to $23 million, which is more than double the budget for 2009. The company is well-funded, so it will have no problem carrying out the exploration program.
Most analysts forecast that Golden Star Resources will have double digit increases in both sales and earnings going out for at least 5 years. Estimates are that gold sales from the company will increase about 16% this year and more than 11% next year. Analysts' earnings projections are for an increase of 143% this year and 58% next year. Earnings are expected to continue at a 5 year annual compounded growth rate of at least 10%.
North American Palladium Ltd. (NYSE AMEX: PAL)
North American Palladium Ltd. (NYSE AMEX: PAL) is a Canadian precious metals company focused on growing its production of palladium and gold. The company's flagship Lac de Iles mine is one of only two primary palladium mines in the world and has been producing the metal since 1993. To date, the company has invested $500 million in infrastructure and mineral rights for the mine.
The Lac de Iles mine consists of an open pit mine and an underground mine. The company restarted mine operations in April 2010. It had mothballed operations temporarily due to low palladium prices. However, now there increased demand for palladium globally from industries such as the auto industry. Increasing auto sales in countries such as China and India has a lot to do with that. Palladium is used in many catalytic converters.
In addition, there have supply problems from the world's two biggest producers of palladium – Russia and South Africa. In particular, the world's largest producer – Russia's Norilsk – has had problems. This has given North American Palladium an opportunity to cash in on the higher palladium prices. The company plans to expand operations at the Lac de Iles mine with the goal of becoming a very low cost palladium producer.
The company is well-positioned to do so. North American Palladium has a strong balance sheet with $150 million cash and no long-term debt. The latest quarterly results showed that it produced nearly 28,000 ounces of palladium at a cost of just over $300 an ounce. This is well below the current market price of palladium at $550 an ounce.