Tens of billions of dollars will be spent developing the vast natural-gas reserves of northern British
Columbia and Alberta. No one notices because the energy trade has been so hurt by politicians and

climate alarmists. But liquified natural gas is vewed as green and is acceptable to most native and environmental groups, as well as to politicians at both the
provincial and federal levels. Investors always end up going to where cash is being generated, and this is one area they will flock to.

Shell-led LNG Canada has already broken ground on its fully approved $40 billion liquified natural gas terminal in Kitimat on the B.C. coast and work has begun building the infrastructure to carry gas from the fields to the coast, notably the $6 billion Coastal
GasLink pipeline. Drillers, meanwhile, are ramping up activity as they aim to be ready to start producing as soon as the pipes are open, which means they’ll start drilling this year to build reserves.

The way to profit from this trade is to invest in the most promising “pickaxe and shovel” stocks, the smaller companies that will supply this gas rush.

Long-time subscribers will remember Athabasca Minerals (ABM.V). It was the second stock ever recommend in this newsletter, at 25 cents, a little more than eight years ago. The stock would go on to provide subscribers with a return of as much as 1,100%. A decline
in oil prices and some poor management decisions by the former team (now all gone and replaced by a top-level crew) led to the stock falling from more than $3 to 10 cents.

But it’s starting to rally, and we believe that the stock is about to create a great deal of wealth again. We expect significant near- and longer-term gains from the stock, and given the relatively low risks, the value proposition looks very attractive.                      …. read more


Colabor Group Inc. (GCL)

As if on cue, Colabor (GCL) last week announced the sale of part of its wholesale division right after we wrote our update (but just before we sent it). The sale of Décarie Meats was in part what we were hoping for.

Sale proceeds are $20 million cash, which will be applied to debt.

The company won’t disclose what Décarie produced in revenues and EBITDA for competitive reasons, which is not uncommon. There will be some interest savings, perhaps $800,000/year, which will flow to the EBITDA line. That improves the equity valuation modestly.

But the improved balance sheet goes much farther in increasing the value of the equity, even though the market barely blinked when the deal was announced (likely because of market turbulence).

Here is what CEO Lionel Ettedgui said: “This sale is aligned with our plan to refocus our activities on our growing core business in the Broadline Distribution market, where we have, in our opinion, significant competitive advantages and important growth opportunities.”

To put that in context, Colabor operates two segments: Distribution and Wholesale.

Here is the breakdown in sales from the two segments for last year:

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