Canadian Resource Companies

Canada offers a wealth of natural resource companies that offer excellent investment opportunities. Most trade on Canadian exchanges, but some have counterparts on the New York Stock Exchange or Amex. Examples include Silver Wheaton (SLW) for silver production, Silver Standard Resources (SSRI), Fording Canadian Coal (FDG), Pengrowth Energy Trust (PGH), Dennison Mines (DNN) for uranium, and International Royalty Corporation (ROY) with a mix of natural resource investments. It's difficult for US investors to invest directly on the Canadian exchanges - most brokerages can't accommodate you or charge large fees if they do. But if you are a US investors and want junior exploration companies in energy and metals, you can still often take part by buying shares available on the OTC (over the counter) market, including the pinksheets. For example, Minera Andes, the junior gold producer in Argentina, trades as MAI on the Vancouver exchange, but also has an active OTC counterpart: MNEAF.ob. That trades with an average volume of over 300,000 shares per day, almost three times as high as the volume of the Canadian mother stock. That's good - that means it will be easy to buy and sell. Other stocks over the counter may have low average volumes that will make it more difficult and more costly to sell (the spread between the bid and the ask price will tend to be greater, and manipulation is easier). You can find out the OTC versions of Canadian companies using finance.yahoo.com and using symbol lookup to find both Canadian and US listings. Be sure to check daily volume before you buy (generally it's good to have over 20,000 shares per day, in my opinion, but I've done OK with small amounts of more thinly traded stocks). And be sure to use a limit order - never use market orders or you will pay dearly.

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