Friday 21st September 2018

Resource Clips


The VRIC verdict

A bull market’s coming but this one differs from its predecessors, the Vancouver Resource Investment Conference hears

by Greg Klein

The bull’s coming but this market differs from its predecessors, the Vancouver conference hears

Overflow crowds paid rapt attention to keynote speakers, panels and debates.

 

Okay, so over 8,000 people attended this year’s event, where over 300 companies set up shop on a sold-out exhibit floor and speakers drew SRO audiences. But how best to describe the enthusiasm? In a sector where bull or bear often depends on mood, any ursine trespassing on this event risked getting horns-gored into raw and bloody shredded beef. If anything, that would have marked an appropriate finale for the January 21 to 22 Vancouver Resource Investment Conference 2018.

But if the bull’s back, it’s not necessarily a repeat performance. These are unprecedented times, according to some speakers.

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Marin Katusa, Rick Rule, Joe Martin, Doug Casey and
Frank Holmes exchange barbs during a panel discussion.

“For the first time in my lifetime, the gold mining industry has actually decided to become an industry rather than a floating abstraction,” declared Rick Rule. “The insanity of the industry, the stupidity of the industry has meant that the opportunities for attractive capital deployment are better than they have ever been.” He now sees an industry focused on economic results. That, combined with investors’ performance expectation, “which is nil, is going to yield surprise after surprise after surprise in 2018, damned near all of those surprises being good.”

Commodities, he said, “are unloved, under-owned, undervalued and in an uptrend.” But he attributes price recovery not so much to renewed demand as to “damaged supply” during the bear market. The time lag to build new mines means “price response in the market can be very messy, and the consequence of that can be very pleasant.”

With majors and intermediates facing a “really threadbare” development pipeline, Rule expects a five-year exploration boom and a busy M&A cycle that’s “more rational than in the past.”

He suggests investors size up companies’ people before scrutinizing the assets. Looking back on his own exploration investments, he credited project generators for an outsize proportion of success.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Animated crowds expressed keen interest, optimism and excitement.

“I’m not saying to ignore successful efforts in sole-risk exploration. What I am saying is to participate in the boom that is coming in exploration in the next five years by constructing a portfolio of prospect generators.”

Gold price discussion also drew observations of unprecedented circs.

Kitco Metals’ Peter Hug noted a break from a consistent 40-year trend. “Retail tends to sell at the bottom and buy at the top. What we’ve noticed in the last year, though, is a phenomenon that I have not seen, and that is retail is selling into strength.”

He sees $1,365 as a barrier to breach. “If we break through that resistance level, we’ll see $1,425 this year.”

For Rule, “gold did what I asked it to do in 2017, which is preserve my purchasing power, and interestingly it preserved my purchasing power at a time when confidence in the overall economy was fairly high. Gold stocks did not do what I asked them to do in 2017 and I suspect gold stocks will pick up pace in 2018.”

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

With 56 seconds to go, a director readies participants to close the TSX.

As for 2018 prices, “I wouldn’t be surprised to see gold at $1,500, but I wouldn’t be disappointed to see it stay at $1,350.”

Author/economist/lawyer James Rickards said we’re at “the beginning of the third great bull market in my lifetime,” following 1971 to 1980 and 1999 to 2011. He sees $1,400 gold possible this year. Even if that doesn’t happen, “I expect this to be a multi-year bull market that could go five, six, seven years and eventually go to $10,000 an ounce.”

He sees unprecedented actions among the Fed, which “is not just raising rates, they’re destroying money. They’re reducing their balance sheets. When you reduce your balance sheet, you make money go away. This is the opposite of QE. We call it QT, quantitative tightening.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

With just one second to go, the crowd’s excitement builds.

“And by the way, this has never happened before…. We’re in an unprecedented experiment. We’re all guinea pigs in this experiment.”

He added that the world holds enough gold to back a gold standard. “It’s just a matter of price.”

Cryptocurrencies placed high on VRIC’s agenda, maybe at the expense of energy and critical minerals. But a debate between gold bug Rickards, crypto bug Teeka Tiwari and crypto-hater Peter Schiff largely became an argument between Tiwari and Schiff, the latter sounding angry enough to bust an aneurysm.

Investment opportunities weren’t VRIC’s sole excitement. A near-stampede broke out with the announcement that free booze was available in the four corners of the Speakers Hall. But the tumult was quelled just as suddenly by the next announcement—Joe Martin’s induction into the Resource Hall of Fame.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Jay Martin looks on as Joe Martin accepts
the 2018 Resource Hall of Fame honour.

The tribute followed more than 20 years of successful conferences staged by the Cambridge House International founder. Yet it wasn’t the first time he’s won an award that he created himself, pointed out his son, Cambridge House president Jay Martin. “If you think that’s weird,” Jay emphasized, “Joe Martin does not give a shit what we think about Joe Martin.”

Even if he did, he needn’t have worried about the heartfelt remarks that pre-empted a proper roasting by panel members. An appreciative audience heard about Martin giving the mining industry a forum through good times and bad, helping to educate investors, building a community within the industry and, outside of business, putting his fundraising acumen to work for charities.

Cambridge House heads to Toronto for the Cantech Investment Conference 2018 on January 31, then returns to Vancouver to host the International Metal Writers Conference 2018 from May 15 to 16, billed as the “largest gathering of investment newsletter writers from around the world.”

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Overlapping with VRIC, the Association for Mineral Exploration
Roundup 2018
took place right next door. Native music proved
to be an Exhibit Hall attention-grabber.

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

At Roundup’s MineralsEd exhibit, teacher/writer Patty Kiloh sold copies
of Never Rest on Your Ores. Proceeds from Norman B. Keevil’s
history of Teck help MineralsEd encourage tomorrow’s expertise.

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

A Yukon Dan team member imparts some
traditional but still-practical skills at Roundup.

 

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Prior to next year’s VRIC, Cambridge House presents Vancouver’s
International Metal Writers Conference 2018 on May 15 and 16.


Comments are closed.

Share | rss feed

View All: Feature Articles