Wednesday 13th December 2017

Resource Clips


February, 2013

Rating the risks

February 28th, 2013

A Fraser Institute survey shows how miners and explorers see the world they work in

by Greg Klein

Next Page 1 | 2

“Great mineral assets, highly corrupt government….” That’s sometimes the conundrum under which exploration and mining companies operate. And that was just one comment published by the Fraser Institute as it evaluated a world of challenges and opportunities in its annual Survey of Mining Companies released on February 28.

Between October 2012 and January 2013, 742 companies rated 96 jurisdictions which included countries and, in the case of Canada, Australia, the U.S. and Argentina, provinces, states and territories. Respondents considered 15 policy factors affecting investment decisions in those jurisdictions, for a possible maximum score of 100. Some factors included regulations, corruption, taxation, aboriginal land claims, infrastructure, the local workforce, political stability and physical security.

While the full report provides breakdowns by category, here are the top 10 jurisdictions for overall scores. The 2011-to-2012 rankings are in parentheses.

A Fraser Institute survey shows how miners and explorers see the world they work in

The Fraser Institute’s annual survey rates jurisdictional risk
for a number of factors concerning mining and exploration.

1. Finland (New Brunswick)
2. Sweden (Finland)
3. Alberta (Alberta)
4. New Brunswick (Wyoming)
5. Wyoming (Quebec)
6. Ireland (Saskatchewan)
7. Nevada (Sweden)
8. Yukon (Nevada)
9. Utah (Ireland)
10. Norway (Yukon)

Last but least, here are the bottom 10:

87. Greece (Vietnam)
88. Philippines (Indonesia)
89. Guatemala (Ecuador)
90. Bolivia (Kyrgyzstan)
91. Zimbabwe (Philippines)
92. Kyrgyzstan (India)
93. Democratic Republic of the Congo (Venezuela)
94. Venezuela (Bolivia)
95. Vietnam (Guatemala)
96. Indonesia (Honduras)

Utah and Norway knocked Saskatchewan and Quebec out of the top 10. Greece was added to the survey for the first time, only to join Zimbabwe and the Democratic Republic of the Congo for their bottom 10 debut. Another first-timer, French Guiana placed 27th overall, a fairly impressive ranking for a newcomer and non-First-World country.

Crisis-torn South Africa dropped to 64th place overall compared to 54th last year, retaining its fourth-from-last spot for “labour regulations, employment agreements and labour militancy or work disruptions.”

Of Canadian jurisdictions, Nunavut ranked worst at number 37.

Some anonymous concerns listed under “horror stories” ranged from uncertainty about native rights in Ontario to potential corruption in Quebec. One response stated that “endless ‘community consultation’” in the Northwest Territories costs the company more than exploration. Others noted confiscation of mining rights in Indonesia and expropriation in Bolivia.

Next Page 1 | 2

February 28th, 2013

Value market in gold will work for patient investors: Jocelyn August by GoldSeek
Michael Berry’s new secret for finding winners—Optionality by the Gold Report
A test of strength for gold by VantageWire
Too soon to call time on gold’s bull market, economists say by the Financial Post
Gold and mining shares by the Grandich Report
Rick Rule: Gold companies regaining their lustre? by Equedia

February 27th, 2013

Michael Berry’s new secret for finding winners—Optionality by the Gold Report
A test of strength for gold by VantageWire
Why Casey Research believes precious metals will rise again by GoldSeek
Too soon to call time on gold’s bull market, economists say by the Financial Post
Gold and mining shares by the Grandich Report
Rick Rule: Gold companies regaining their lustre? by Equedia

PDAC 2013—But why?

February 27th, 2013

Despite shaky markets the industry’s biggest annual event remains as popular as ever

by Greg Klein

Next Page 1 | 2

Back again from March 3 to 6, it’s the exploration and mining world’s greatest annual event. Everyone who’s anyone in the industry knows that and the numbers prove it: Hordes of people, zillions of booths, masses of presentations, tons of exhibits, truckloads of events, lots and lots of courses, workshops and forums and a whole bunch of other stuff. (Those who need more precise info can click here.) But why, during these lean times especially, do people return to the Prospectors & Developers Association of Canada annual convention?

D & D Securities partner Bob Rose

Bob Rose

That’s a question that troubles Bob Rose. A partner in the Toronto-based brokerage firm D & D Securities who focuses on the juniors, Rose has spent “only 53 years” in the investment business. So he’s entitled to some skepticism.

“It costs how much for a booth, it costs how much to get here, how much to put yourself up in a hotel and feed yourself?” he asks. “And half the companies listed on the Venture stock exchange have got less than $500,000 in the till and half of those people have got less than $100,000.”

Yet still they come. “You’ll see hundreds and hundreds of them in about 35 or 40 aisles with 20 on either side of each aisle like last year and the year before and the year before that—all with their hand out looking for some money to punch a hole somewhere in the world. But very few of them have the ability to feed themselves and pay for their trip to Toronto. So that’s one hell of a question: Why are you doing it?”

A lot of them won’t even be around much longer, he says. “In the next year or so a lot of those companies are going by the boards.” That hardly bodes well for PDAC 2014. But Rose has seen it all before. “Shit, I can remember walking through PDAC just after Bre-X and you couldn’t find anybody with a search warrant.” Yet somehow the sector survived.

Last year’s PDAC convention drew over 30,000 people from 125 countries to the largest event of its kind

Last year’s PDAC convention drew over 30,000 people
from 125 countries to the largest event of its kind.

So is Rose entirely cynical about the event? “It’s a good party,” he concedes. “It’s a very good networking tool. A lot of people find a lot of new shareholders there…. It’s a matter of bringing people together and shooting your idea at the rest of the world. But it’s expensive.”

That might be true for the companies, but most of PDAC 2013 is free to the public.

More openly enthusiastic is Fatih Akarsu, corporate communications rep for Pasinex Resources CNSX:PSE. “It’s the biggest conference for the mineral exploration sector with about 35,000-plus people attending. It’s the greatest way to network with people and get your company’s name out.”

But isn’t it a challenge for a relatively new (March 2012), lesser-known company like Pasinex to get noticed among so many others? “There’s always a challenge with anything in the world,” Akarsu replies. “There are other companies that are better established, but everyone starts from somewhere.”

Pasinex focuses on precious and base metals exploration in Turkey. New regulations requiring exploration licence-holders to either use them or lose them could put about 30,000 licences on the market over the next few years, he says. “So that’s a great indication for the mineral exploration sector that Turkey is pro-business. It’s the world’s 16th-largest economy. In 2011 its GDP was 8.5%, second only to China.” An event like PDAC 2013 can bring the company and the country to greater prominence, Akarsu says. “We’ll be at Zimtu Capital’s [TSXV:ZC] booth 2819.”

Next Page 1 | 2

February 26th, 2013

A test of strength for gold by VantageWire
Why Casey Research believes precious metals will rise again by GoldSeek
Too soon to call time on gold’s bull market, economists say by the Financial Post
BMO adviser Coxe: “This is the worst trading situation I have ever seen” by the Gold Report
Gold and mining shares by the Grandich Report
Rick Rule: Gold companies regaining their lustre? by Equedia

Turnaround 2013

February 25th, 2013

Michael Kott sees better days ahead but warns juniors to expand their investor base

by Greg Klein

Next Page 1 | 2

Michael Kott

Michael Kott

Canadian juniors explore the world for resources. But they might not be looking far enough for investors. European and Asian capital can offer additional support during difficult times, says Michael Kott. While meeting with exploration companies in Vancouver on February 25, the CEO and founder of Munich-based CM-Equity took time to speak with ResourceClips.

His capital market company links Canadian and Australian resource companies with European institutional and private investors, helping companies with initial public offerings, private placements and dual listings. With plans to increase CM-Equity’s activities in Asia, Kott believes a diversified shareholder base has become increasingly necessary for the juniors.

Although he’ll abjure this year’s PDAC for “too much partying,” he’s been known to mix business with pleasure himself. But his company is better known for its own resource conferences in Germany, which will soon spread to Asia. “We’re a very international company, always have been,” he says.

The markets are now at a valuation that is completely ridiculous. I expect 2013 will be the big turnaround year and a couple of better years are ahead of us.—CM-Equity CEO Michael Kott

So how much international interest do the juniors have? “Investors are always interested in companies that have growth potential,” Kott says. “They’re interested in companies that can show they have growth in their resources, revenues, cash flows or dividends—any kind of growth companies. This is not limited to one industry. Generally investors don’t care if it’s natural resources or technology. They’re going where they can find growth and a good investment case.”

He adds, “There’s an appetite in Europe for good quality companies but the junior sector has not really had the best reputation over the last couple of years. Lots of stocks went south, companies had trouble with financings and ran low on money. By definition the exploration sector is made up of cash-burners. The industry is interesting, but when there’s a long way to get into production and generate cash flow, there’s a problem. People want to invest in real assets. Cash flow is the key and therefore I think it’s a very tough marketing problem for the juniors. But having said that, the markets are now at a valuation that is completely ridiculous. I expect 2013 will be the big turnaround year and a couple of better years are ahead of us.”

Next Page 1 | 2

February 25th, 2013

What drives the price of gold and silver? by GoldSeek
Too soon to call time on gold’s bull market, economists say by the Financial Post
BMO adviser Coxe: “This is the worst trading situation I have ever seen” by the Gold Report
Gold and mining shares by the Grandich Report
Rick Rule: Gold companies regaining their lustre? by Equedia
A new beginning for uranium by VantageWire

Week in review

February 22nd, 2013

A mining and exploration retrospect for February 16 to 22, 2013

by Greg Klein

Next Page 1 | 2

What’s behind the scenes for graphene?

Graphene may have sparked an explosion of patents but results of the boffins’ brainstorms “remain shrouded in secrecy,” according to Friday’s Industrial Minerals. CambridgeIP chairman Quentin Tannock told the journal, “Some companies will never publish their patents and … there are probably many very valuable ideas out there that haven’t been disclosed.”

A mining and exploration retrospect

Graphene’s unique properties suggest a host of possibilities,
but much recent research has focused on touch screen technology.

That could be the case even if only a small fraction of last year’s 5,000-plus patent applications pan out. On February 13 CambridgeIP, which encourages “development, deployment and dissemination of valuable technologies,” released its top 10 list of companies and agencies that filed patents for graphite’s wonder-derivative. A January CambridgeIP report prompted the BBC to speak of “an intensifying global contest to lead a potential industrial revolution.”

But regardless of whether some research stays secret, Focus Graphite TSXV:FMS president/CEO Gary Economo told IM, “We see 2013 as a breakout year.” Focus holds a 40% interest in Grafoid Inc, a company with its own top-secret graphene laboratory. IM said Economo “[predicted] the first raft of graphene-based consumer products will emerge on the market within months.”

Much of the research so far has been on touch screens and bio-sensors, Tannock added.

Rule of law lost in Canadian resource shakedowns

“What is the message being sent to the world” when “five or six disgruntled ex-employees … can shut down a business of 500 people at a cost of millions? That there is no law in northern Ontario?”

That’s how Wednesday’s Timmins Daily Press quoted Neal Smitheman, a lawyer representing De Beers, which faces a native blockade to its Victor diamond mine. The company has now lost nearly three weeks of an approximately 45-day season to transport heavy equipment and supplies over a winter ice road. This week only about half a dozen protestors were in place, apparently ex-employees who want to renegotiate an existing impact benefit agreement. Police refused to intervene, forcing the company to apply for a court injunction. On February 15 Judge Robert Riopelle issued an order that specifically “required” police to act. They still refused. De Beers went back to court on Wednesday.

If Smitheman sounded exasperated, a lawyer representing the Ontario Provincial Police seemed infinitely patient as he explained that the OPP takes a more “measured approach” towards natives than other people. Plus the weather was cold, he said.

Thursday’s Daily Press reported a plea to the demonstrators from two local politicians. “We have hundreds of families across James Bay and the Timmins region who rely on work at the Victor mine to pay their bills and save for their kids’ college education,” said MP Charlie Angus.

Next Page 1 | 2

February 22nd, 2013

BMO adviser Coxe: “This is the worst trading situation I have ever seen” by the Gold Report
The ‘end’ of QE—hype or tripe? by GoldSeek
Gold and mining shares by the Grandich Report
Fed may halt QE3 before job market heals by the Financial Post
Rick Rule: Gold companies regaining their lustre? by Equedia
A new beginning for uranium by VantageWire

February 21st, 2013

Gold and mining shares by the Grandich Report
Gold’s regular morning mugging by GoldSeek
Fed may halt QE3 before job market heals by the Financial Post
John Kaiser: Can the TSX Venture be saved? by the Gold Report
Rick Rule: Gold companies regaining their lustre? by Equedia
A new beginning for uranium by VantageWire