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Anticipating opportunity

January 16th, 2014

Vancouver Resource Investment Conference 2014 puts the juniors’ plight in perspective

by Greg Klein

Through good times and bad the Vancouver Resource Investment Conference has been an annual institution for companies, commentators and investors alike. This year’s event, held January 19 and 20, takes place in a (so far) not-so-good year. In fact a godawful year, if it follows the pattern of the last two. Even so, VRIC plays a vital role in the investment community, says Chris Berry.

A mainstay of the conference, both as a featured speaker and panel moderator, the House Mountain Partners founder and Morning Notes co-editor attributes the event’s main benefit to access—“access to company management, access to their companies’ stories and of course access to the writers, speakers, thinkers and leaders of this industry, not just in the junior mining industry but the investment industry in general. You look at who is on the list of speakers and it’s a real powerhouse,” Berry says.

The list includes such figures as Rick Rule, Frank Holmes, Brent Cook, Frank Giustra, Michael Berry, John Kaiser, Danielle Park, Lawrence Roulston, Leonard Melman and Eric Coffin, to name just a few of the nearly 50 speakers. New names range from Zimtu Capital TSXV:ZC analyst Derek Hamill to Dundee Corp TSX:DC.A president/CEO and small-cap supporter Ned Goodman.

Vancouver Resource Investment Conference 2014 puts the juniors’ plight in perspective

Chris Berry: Energy, industrial and agricultural minerals “are ubiquitous throughout the global economy so if I see things like purchasing managers’ data starting to perk up, that suggests this might be the time to look at some of these minerals.”

Also new this year is the Yukon government’s participation in an expanded Yukon presence. Among the speakers will be Premier Darrell Pasloski, along with representatives of the Yukon Geological Survey and the Yukon First Nation Chamber of Commerce. Just outside the territory’s pavilion, Yukon companies will cluster in an area dubbed the Klondike Trail.

North of there the territory’s southern neighbour hosts its own series of presentations, in which British Columbia mines minister Bill Bennett joins some of the province’s companies to talk about B.C.’s emerging projects.

Overall this year’s VRIC hosts more than 300 exhibitors, nearly half of them Venture-listed miners and explorers. Their presence takes place during “a real contrarian opportunity,” says Berry.

“The most valuable benefit we have right now is time,” he adds. “It’s time to research the metals, the minerals and the companies themselves. I think the conference offers patient investors the chance to think about where they want to be over the next one, to three, to five years with respect to commodity investing.”

Berry’s own criteria for evaluating companies calls for both strong management and a strong balance sheet, “the ability to survive and weather this storm. We’re at a stage where a press release about drill results doesn’t excite the market like it used to. People want to know that the business model of a company is sustainable and can last over one, to two, to three years, if that’s how long it takes for this to turn.”

And turn it will, Berry maintains. His Sunday afternoon workshop will examine some positive indicators, despite what he maintains are deflationary forces that hurt commodities in general.

“That said, there are signs of hope,” he emphasizes. “I think the worst is behind us. I’m not sure we’ve turned yet but when you look at other economic metrics like Purchasing Managers Index data, on a global basis it’s strengthening. Interest rates are still very low, which means that the cost of money and the cost of doing business is still very cheap. When you look at what’s happening in China, their old way of doing business and of economic growth is collapsing. What is emerging now is a new, more sustainable focus on individuals and individual consumption, and cleaner and greener growth. These are just a few of the factors that I think bode well for the commodities space going forward.”

As usual several VRIC talks, workshops and corporate presentations will focus on precious metals. Berry, on the other hand, continues his fascination with energy metals, agricultural metals and industrial minerals. The challenge—which the conference also addresses—is to bring these potential opportunities to investors’ attention.

All those commodities “have their own narrative and their own supply and demand dynamic,” Berry points out. “Obviously precious metals are viewed as monetary metals, hedges against inflation and so on, and gold in particular is really viewed as a benchmark for the commodities industry, for better or worse. You can’t say the same thing about lithium or phosphate because they’re smaller markets and have much different uses. But these metals and minerals are ubiquitous throughout the global economy so if I see things like purchasing managers’ data starting to perk up, that suggests this might be the time to look at some of these minerals.”

Uranium, for example, despite faring poorly as a commodity has boosted some enterprising juniors, especially in northern Saskatchewan. Canadian Uranium Exploration and the Athabasca Basin will be the topic of Derek Hamill’s workshop, to be followed by presentations by companies including Lakeland Resources TSXV:LK.

Besides moderating two panel discussions, Berry presents a workshop entitled Finding Value Amongst the Wreckage in Energy Metals in 2014. “Our investment thesis is very straightforward,” he explains. “No middle class has ever grown or sustained itself throughout history without access to reliable and affordable energy.”

Speaking on the phone from New York while “furiously preparing for VRIC,” Berry adds, “I always look forward to coming over. I’ve been doing this for about four or five years and it’s a tough time right now, even the majors are having a tough time. But it obviously won’t always be this way. Opportunities to attend VRIC are potential indicators of where we go from here, so I’m looking forward to that.”

The Vancouver Resource Investment Conference 2014 takes place January 19 and 20, from 8:30 a.m. to 6 p.m., at the Vancouver Convention Centre West. Avoid the $20 cover charge by registering in advance for free admission.

Read more about Cambridge House conferences past, present and future.

Disclaimer: Zimtu Capital Corp and Lakeland Resources Inc are clients of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in those companies.

Dundee Corp president/CEO Ned Goodman discusses his strategic investment in the CNSX

October 15th, 2013

…Read More

Dundee Corp president/CEO Ned Goodman addresses a new advocacy group, the Venture Capital Markets Association

October 3rd, 2013

…Read More

Canada’s other exchange

October 1st, 2013

What will Ned Goodman’s involvement mean for the CNSX?

by Greg Klein | Revised October 1, 2013

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The amount and terms are confidential but Canada’s other stock exchange got a boost in stature September 30 as Dundee Corp TSX:DC.A closed a strategic investment in the CNSX. Dundee president/CEO Ned Goodman, a strong critic of the TSX Venture regulatory regimen, becomes CNSX deputy chairperson.

Addressing a September 12 panel discussion hosted by the Venture Capital Markets Association, Goodman called the Venture “a feeding source for the legal community.” He added, “You need two hands to lift [the TSXV’s] book of regulations and policies. It’s absolutely mind-boggling all the things you’re required to do to raise a half-million dollars—which means that half of that half-million will go to lawyers.”

The CNSX model, on the other hand, “reduces the time and expense companies face in going public, and in maintaining a listing, along with a high level of continuous disclosure,” Goodman said in a statement accompanying the September 30 announcement.

What will Ned Goodman’s participation mean for the CNSX?

Ned Goodman: Competing with the Venture is “not going to be easy.
But I’ve created a career by
doing things that aren’t easy.”

Speaking to on October 1, Goodman says, “I’ve been around the CNSX for quite a while, I even have a company listed there [Eurogas International CNSX:EI].”

Stating his opinion of the Venture indirectly, he adds, “I think the country needs an entrepreneur’s stock exchange. So I decided to help out.”

Although he describes issuers’ regulatory responsibilities as “a fact of life” largely originating with the securities commissions, he says the TSXV compounds those obligations. “I would say there’s tremendous difficulties, there’s things thrown in there that mean your legal fees to get listed or stay listed are punishing, and it’s almost like it was built for lawyers. You can’t do it on your own and entrepreneurs like to do things on their own.”

CNSX Markets CEO Richard Carleton sees two-fold significance in Dundee’s investment. “We look at it as a powerful endorsement of our services and our proposition from one of the major figures in junior capital finance in Canada,” Carleton tells “Secondly, it provides us with more resources to continue our program of supporting the work of junior capital issuers in Canada with better quality secondary markets through some work we’re doing with the dealers, and to build a market-making program that will ideally provide continuous two-sided quotes for all the issuers on CNSX. We’re also looking to build more bridges to the independent dealer community, and of course Ned is a very important figure there too. We want to help them reduce their cost of trading and do their corporate finance activities more effectively in a lower-cost environment.”

But rather than build up the alternative, a new advocacy group called the Venture Capital Markets Association wants to fix the Venture. Just prior to the official launch in early September, founder and Cambridge House International chairperson Joe Martin told that over-regulation imposes unnecessary burdens on already struggling companies. After the Vancouver, Calgary and Montreal exchanges merged with Toronto, he explained, juniors lost “infrastructure” that promoted venture capital.

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‘Crisis’ at the TSX Venture

September 16th, 2013

The Venture Capital Markets Association argues the juniors’ case for regulatory reform

by Ted Niles

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The Venture Capital Markets Association argues the juniors’ case for regulatory reform

Panellists Ron MacDonald, Don Mosher, Frank Holmes and Joe Martin discuss the juniors’ plight
at the Toronto Resource Investment Conference 2013.


These are indeed bad times for the junior resource sector. But can anything be done? The newly formed Venture Capital Markets Association believes part of the problem can be solved and it’s embarking on a plan of action.

There’s little doubt that some combination of macroeconomic forces and regulatory inefficiency has caused one of the worst downturns in memory. Few question the view that bear markets have the nasty habit of following bull markets. To the extent that the bears inevitably give way to the bulls again—leaner and meaner bulls, moreover, culled of those who preferred romancing cows to pulling ploughs—this is generally considered good.

There’s some dispute, however, regarding regulatory inefficiencies. One side believes that while the burden of regulation on venture capital companies can be onerous, it is necessary and manageable. But, the other side argues, what was manageable (if only just) at the height of the market is not so much slowing down a cyclical upturn as preventing one.

Speaking September 12 at Cambridge House International’s Toronto Resource Investment Conference 2013, the event’s founder and chairperson Joe Martin says: “For over 100 years Canada has been a world leader in providing venture capital for speculative investing and mineral exploration, mining, technology, life sciences and energy. Today, zealous over-regulation by a multitude of governing organizations is rapidly bringing venture funding to a halt. We’re not talking here about the regulation of trade, we’re talking about the regulation of money. Hundreds of thousands of jobs across Canada and around the world are going to be lost.”

You need two hands to lift [the TSXV’s] book of regulations and policies. It’s absolutely mind-boggling all the things you’re required to do to raise a half-million dollars—which means that half of that half-million will go to lawyers.—Ned Goodman

Two panels at the conference discussed problems specifically facing TSX Venture resource companies. While high-frequency algorithmic trading was touched upon—a particular concern of Kaiser Research Online editor John Kaiser—the priority issues were access to capital and regulatory overkill.

Ned Goodman, president/CEO of Dundee Corp TSX:DC.A, explains, “In raising money you’re always frustrated, but if you’re talking about the Venture exchange it’s more than frustration. I think the Venture exchange has forgotten why stock exchanges were put into existence. They were put into existence to allow people to invest money in ventures that can be built and grown and more money has to be raised. Instead it’s been nothing more than a feeding source for the legal community—and you end up spending legal fees in excess of the amount of money you can raise before you have to start all over again.”

Goodman continues, “You need two hands to lift [the TSXV’s] book of regulations and policies. It’s absolutely mind-boggling all the things you’re required to do to raise a half-million dollars—which means that half of that half-million will go to lawyers. The Vancouver exchange was one where you could raise money and it created an awful lot of nice companies. But the rules and regs [for the TSXV] are unbelievable and they’re not designed for junior companies. In most instances you’re so blocked you can’t even do your financing. Then, once you are on the exchange, the costs of staying there and doing business—you can’t buy something or sell something without having to deal with a bureaucrat [who has] no knowledge of the industry at all.”

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