Nevtah Capital Management (NTAH.PK)

Dear Bottarelli Research Member,

Before I get into today’s pick, I want to go over some information on our uranium play with Yellowcake Mining (YCKM.OB) because if you have yet to own this one, it’s time to add shares to your portfolio now.

I don’t know if you’re aware of this, but the Nymex (for the first time ever) has now started trading uranium futures. To me, this is a clear example that uranium is becoming a major player in the commodity sector, and the ability to trade it on the Nymex will now expand investor’s appetite for uranium on a much larger scale — attracting everyone from hedge funds to gold bugs and even folks like you and me. As more investors recognize the tremendous investment potential of uranium, you could see a “trickle down” effect that benefits small-cap uranium plays like YCKM.

In addition to the Nymex catalyst, YCKM and their joint venture partner Strathmore Minerals have obtained approval from the Wyoming Department of Environmental Quality to conduct drilling at its Jeep Project in Freemont County, Wyoming. As I mentioned before, we already know that there is uranium there — it’s just a matter of how much. With Yellowcake/Strathmore ready to begin drilling 40 new holes in July to expand their reserve, we’ll get a much better picture of just how much uranium YCKM is sitting on. When it comes to situations like this, I always like buying small caps in advance of such activities — because this puts you in a great position to ride the upside momentum caused by any promising exploration results. Keep in mind that YCKM has every intention of becoming a uranium producer very quickly, and with the help of their joint partnership and their new exploration approval, you can bet things will go fast. As a result, I recommend buying YCKM if we’re lucky enough to get any kind of dip. And for those of you who have not already done so, YCKM is a stock that you want to buy now. (For my full YCKM write-up, please refer to the Alert Archive in the Members Area of the Web site, and view the small-cap alert dated Friday, March 16, 2007.)

I would also urge you to buy Canetic Resources Trust (CNE – NYSE) on any dips. This one is right on track to hit $17.50 by the end of the year. Combine that upside forecast with a 15% dividend (which is partially tax free) and you have a “cash generator” that hands you income for investment in our new picks. (For my full CNE write-up, please view the small-cap alert dated Friday, February 16, 2007.)

I’d also like to quickly comment on Raptor Networks (RPTN.OB), because if there was ever an ideal time to buy this stock, or add to your position, now is that time. The market is handing us a second opportunity to own this stock for incredibly cheap valuations — so I recommend that you add to your position anywhere under $1.35 per share.

With that, let’s get on to this week’s newest small-cap pick…

I originally discovered this little company over a year ago at much higher prices. I decided to stay away from investing in it because their technology was not yet in place, nor was it even proven to work. But now that has all changed. Not only will you be picking up this company near the lows of the year, but now that their “closed loop extraction process” has been proven to work, you’re looking at one of the most advanced oil sands plays that I know of.

For the last two years, this company has been working hard to refine its oil sands technology — and they are now ready to apply this proven technology to the sands-rich Utinian Basin in Utah. They expect to be producing 2,000 bbl a day by the end of July.

Using their special closed-loop extraction process, they’ve discovered a non-toxic, solvent-based system that is scaleable, portable, flexible, low-cost, low-energy, low-manpower, low-emission, earth-friendly, and easy-to-operate. Best of all, it leaves a small footprint and offers investors like you a rapid payout.

What’s even more interesting is that a Korean-based firm (called KTI) just invested $29 million to fast-track the implementation of this oil sands extraction technology.

When discussions with KTI began several months ago, their original investment was going to be around $10 million. But after extensive due diligence, KTI started to kick around the idea of doubling their investment to around $19 million.

Then, after a favorable independent engineering study, KTI realized that this technology is able to produce oil from oil sands between $11.00 and $13.00 per barrel — and they decided to increase their investment up to the $29 million level. This represents the second largest participation of a Korean company in any North American oil sands project, so you better believe there’s potential for a really big hit on this one.

And when it comes to oil sands, crude prices above $60 create a very lucrative business environment. According to my research, this company expects to produce up to 12,000 bbl per day by year’s end — with projected increases every year afterwards, and potentially topping out over 50,000 bbl off the projects currently in play.

Here’s the kicker: This company holds a total of 11,535 leased acres in three different areas of Utah, they have proven that their new technology works, and they have worked out refining agreements with a nearby Salt Lake City refiner. In short, all the pieces are in place and the time to act is now.

The company is Nevtah Capital Management (NTAH.PK) and I urge you to pick some up shares under $1.50 while you still can.

There is every indication it will be soon trading at or above its recent highs of $2.50, perhaps even more if their oil sands reserves exceed their output expectations.

I really think that we got lucky since this stock has pulled back from the cash infusion they got from KTI. I want you to own this company today — before they announce any oil production and the mainstream investment herd picks up on it.

Let me now turn things over to Bryan, as I’m sure he has some additional information to share with you. In the meantime, I’m researching a handful of exciting new companies that could deliver some truly fantastic returns. So until next week, enjoy your weekend and stay tuned!

Sincerely,

Nevtah’s Unique System is Now Ready for
Commercial Application, with Payouts Similar to
Conventional Oil Drilling

What I like about Mark and his small-cap selection methodology is that he has an extensive list of companies that he rigorously researches every week, and he comes out with picks like Nevtah Capital Management Corp. (NTAH.PK) at the perfect moment.

Owning shares of NTAH today will position you in this small-cap play two months ahead of the implementation of their oil sands extraction technology — allowing you to quietly enter this play well ahead of the crowd.

I’ll get more into NTAH in a moment, but first I’d like to briefly comment on the current status of the major market averages. You see, I’m convinced that the markets have moved up too far, too fast. We will probably see a correction sometime soon — and I want everyone to be prepared for the moment this happens. You see, small-cap stocks don’t trade like mid-cap or large-cap stocks, so any market weakness will give us a strong re-entry opportunity in some of our top small-cap positions. In other words, I’d like to use any weakness to add to our positions. I’ll get more specific on this tactic in the months that follow, but for now let’s get back into Nevtah Capital Management (NTAH.PK).

Looking at the “big oil picture,” I’m sure you know that there has been no major oil discovery in North America since 1978’s Gulf of Mexico discovery — yet we continue to guzzle oil at an alarming and unrelenting rate.

There is plenty of talk these days about solving the U.S.’s future energy requirements by developing alternative energy sources. That’ll certainly be a big help, but in my view, we have a massive and economically viable resource solution available right now in our own backyard. It could represent a windfall source of energy for years to come, but nobody seems to recognize its true potential. That untapped resource is oil sands, and I have reason to believe that you’ll be hearing a lot more about this starting in July. Consider these facts:

According to the U.S. Geological Survey, there are 2.722 trillion barrels of tar sand oil available on a worldwide scale. Of this 2.722 trillion barrels, 2.573 trillion are located in Canada and the United States. A whopping 94% of the world’s available oil sands lie here in North America! The state of Utah alone holds over 32 billion barrels of tar sands oil — and that’s why NTAH holds such tremendous promise.

A little background: Tar sands (also referred to as oil sands or bituminous sands) are a combination of clay, sand, water, and bitumen. On average, the breakdown contains 83.2% carbon, 10.4% hydrogen, 4.8% sulphur, 0.94% oxygen, and 0.36% nitrogen.

Bitumen is neither oil nor tar, but rather it’s a semisolid and degraded form of oil that does not flow at normal temperatures and pressures. That’s why it has historically been so difficult and expensive to extract. If tar sands can be mined to extract the oil-like bitumen, it can then be converted into synthetic crude oil or refined directly into petroleum by specialized refineries. That’s why oil sands are gaining investor attention once again. With oil prices now holding strong above $60 a barrel, the cost analysis for tar sand extraction has never been better — especially when extraction and processing costs are only $12 per barrel!

Let’s get specific: The tar sand deposits in Uintah County, Utah, contain an estimated 15 billion barrels of bitumen and heavy oil with estimated potential reserves of 4.7 to 7.3 billion barrels. Prior to Nevtah’s special closed-loop production process, no technology has demonstrated the ability to efficiently (and in an environmentally-friendly way) extract the oil contained in these shallow tar sand reserves. In fact, the petroleum industry has not yet been able to develop an economic, cost-effective method of extracting oil from oil sands without the extensive use of water (which is a tremendous energy burden). That’s where Nevtah Capital Management (NTAH.PK) comes into play.

Here’s how their process works: Oil sands are dissolved in an enclosed container at 100 degrees Fahrenheit (or higher). As it dissolves, it is passed through to a wash chamber where oil is removed. The oil-free sand is then desolventized with heat, which converts the liquid solvent to a gas. The solvent oil mixture is then pumped into a critical unit which allows the removal of asphalt through heating and cooling — and this oil-depleted solvent is then returned to dissolve additional oil sand. I admit, it sounds confusing for anyone other than an oil engineer — so here’s what you really need to know:

This new closed-loop production process boasts an amazing 99.9% oil recovery efficiency — all for a cost less than $ 12.50 per barrel.

What’s more, the U.S. Department of Energy issued a report that concluded that “The program’s objectives were met and the project successfully demonstrated that the process is economically and environmentally safe.”

So what you have is an oil extraction process that is economical, gentle, and efficient. Over 99% of the solvent is recyclable. And since the process does not use water to recover the oil, much less energy is required. In fact, the solvent acts more quickly and efficiently than water to remove the oil, and the footprint does not create an environmental mess to clean up afterwards.

The technology is also proven, scalable, highly mobile, and earth-friendly. The continuous flow system is totally closed-loop, emits minimal greenhouse gases, and returns sand to the environment in better-than-original condition. The ending result is dry sand, environmentally suitable for mine backfill as per Utah EPA standards. Plus, the system does not require water and works efficiently on a wide range of oil and sediment types. When you put all the benefits together, you have all the makings for a big time winner.

But that’s not all, because there are advantages to operating in Utah as well. You see, typical crude oil is full of salts and minerals which make it difficult to process. But the oil sands contained in Utah are free of such impurities, making it easier to transport and especially attractive to refiners who cannot process heavier crude. What’s more, because most of the Utah oil sand deposits are from the surface to 250 feet deep, it can be mined using conventional surface equipment (no special deep land machines are needed). The image below shows that the shallow oil sometimes even seeps up to the surface!

And like Mark said above, the process is scaleable, portable, flexible, low-cost, low-energy, low-manpower, low-emission, earth-friendly, easy-to-operate, leaves a small footprint, and has a rapid payout.And when I say “rapid payout,” I’m talking payouts similar to that of conventional oil drilling.

Best of all, this unique system is now ready for commercial application, and it all starts in July. The business model forecasts production of a 2,000 bbl/day by the end of July, followed with a production ramp-up hitting over 50,000 bbl/day by the end of 2009.

From everything presented, it seems quite clear that the time to own shares of Nevtah Capital Management (NTAH.PK) is now.

PLAY: Buy shares of Nevtah Capital Management (NTAH.PK) at or under $1.50, good for the week.

Sincerely,