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March 6 musings ..
As promised I am reporting from PDAC again this year. As usual with PDAC the weather was awful. It seems to be one of the coldest weeks in Toronto every year. There was the usual froth and dollies as other years. I find the glitz is usually attached to poor projects and good companies fill their booths with geologists. One must be careful though as many women are entering the profession now and so there could be a good looking woman in the booth who is a geologist and not an IR dolly. As with many other professions, women have been flocking to the industry so it is only a matter of time until they climb to the executive ranks en masse. I was talking to an ex Queens Geology prof and she said that enrollment is now 50:50 in geology at that school. Of course this will present a challenge to the VPs of Exploration as they assign staff to projects. Not all the world views women as equals like we do in Canada and so deployment to some locales could be fraught with issues.
Attendance was down from the crazy years. It was quoted as 25,122 off from the record around 40,000 in the good years. What seems to be happens there is a large divide between the haves and the have nots. Juniors with good projects and cash in the bank are attracting M & A as well. The rest of the herd are still starving. I thought they would be dead by now but they keep finding enough money to keep the lights on. On the trade side the support services are still suffering big time as there is a minimum of mine development and exploration in the field. One junior I was talking to with exploration in West Africa had 6 offers for drilling services and the prices were down at least 50% per meter. A number of African countries who are normally present did not have booths this year, I guess the CIDA funding has dried up.
Last year the bone head award was to the Quebec Natural Resources Minister who told a room full of African delegations too increase their take from the miners in their jurisdictions. This year the bone head is awarded to the CEO of the gold company that presented at Franco Mining in English. He works in a French country but could not present in French. The audience was French and even though there was simultaneous translation it was still stupid. He should have got someone from his company who speaks French to do the presentation. This event was co-sponsored by the Government of Quebec and the Feds however the Feds were outdone. On the agenda both had equal billing however on the podium it looked as if Quebec was running the show and the only logo in site for all press photos and African delegations to see. Clearly the DFAIT takeover of CIDA still needs some tuning up for the aggressive battles of imagery that Quebec is used to. Also most people with Canadian passports on the podium were Bill 60 supporters in my humble opinion.
In this attendees mind, the cocktail of the show had to be the Norton Rose Fulbright event hosted in the new Toronto aquarium right beside the PDAC locale. What a beautiful aquarium. Seeing it at night was even better. The food and beverages were top notch although I found it ironic that one of the food favorites was fish and chips in an aquarium. I sure hope this facility is not following the lead of the Denmark zoo and their giraffe!
The investment gurus were doing their thing as usual however there seems to be a trend that more and more people are listening to them instead of doing their own due diligence by talking to the companies directly. This has the obvious dangerous implications. These people have developed a "god like" status to the masses. I predict that an upcoming scandal will be due to this evolution of the business. The lawyers will love it.
One of the most inspiring speeches I heard during the convention was from the Prime Minister of Namibia. Dr Hage Gottfried Geingob. He was mostly preaching to the converted although I found it interesting that he made all African representatives in the room stand up at one point. He was preaching fair taxation, good governance and working in partnership with mining companies to develop his country. The message was obvious to the Africans present at this "English" affair. Nothing like this was heard at the Franco meeting. I wonder if we could convince him to defect to the Conservative party in Canada before the next election. Wow; to see a straight shooter in politics! Refreshing. The number of success stories coming out of Namibia supports the talk.
So we finally have the announcement of an election by the Empress Pauline. At least the time frame is short so it will be over before we know it. Pauline is pumping Nationalism for a majority and not discussing the economy. It sucks! The Liberals have the right message but the wrong messenger. Charest get back in there! Foreigners must look at us as nut cases, every few years we bring up the same divisive internal battle in the country when at the end of the day everyone knows that it would be suicide for Quebec to separate. The difference I hear this time across the country is perhaps instead of bending over to keep Quebec in Canada, the rest of Canada may try to open the door for Pauline to leave. I suspect that this could be an election strategy for Harper going forward. If Canada is fed up with Quebec as many people say, then a hard line stance may get Conservatives back in a majority in 2015. For sure Trudeau will appeal to come together and we may see the Liberals sweep Quebec and die in the rest of Canada. So the fight would be over who gets the opposition home in Ottawa.
For sure all of this will scare mining investors away from Quebec. In a two year period Quebec dropped from 2nd favorite mining destination in the world to 12th. I bet it will drop more in this year's annual poll. As uranium will rise going forward, Quebec has already shot itself in the foot by banning uranium exploration in Quebec. That generated a law suit and hope Guy Hebert wins his case against the government. He wants to recoup the money he spent on exploration. I believe near $125 million. Strateco was able to negotiate a deal with the Cree but not the province. Crazy! From a province that has lived on natural resources for most of its history.
Interesting that the US National Guard is training in the Canadian Arctic with Canadians as assistants. I wonder if their war game exercise includes an invasion of Quebec from the north. The games are called "Guerrier Nordique". We all know the US has the south covered from their base in Watertown NY.
Well the annual mining love in is over for another year and most of us have survived. This event is like Christmas shopping for the restaurants and taxi drivers in Toronto. Back to kicking rocks! Until next time!
January 24 musings ..
Well I have been away for the past year trying to survive in a very bad mining market. Putting kids thru university is not a cheap proposition in Canada. So where are we ? Just back from the Cambridge Conference in Vancouver. I have good news. A rare species has been spotted again for the first time in three years. Booth babes. For the past three years no one could afford them. In the nineties they were made famous by Jim Dines, he had them from the outset of Viagra. They are still a rare species however a capital raising firm in Vancouver employ them to entice those poor miners looking for capital. Not only booth babes but, beer, pizza and championship football on big screen. What more could a poor miner want! It will be interesting to see if the booth babes migrate to Toronto for PDAC. Then we will know for sure we are headed back to a bull market for juniors.
So the past week Eastern Canada fell in to another polar vortex, people have to listen to the news as Rob Ford has tamed his show somewhat. In Vancouver they were sailing and driving convertibles. Torts even scripted a show for the miners. Half of the mining community was in the hockey rink in Vancouver. As soon as Torts realized that he put on a show for the City. The fourth line and a fight similar to junior hockey to go with the junior mining market. The boys loved it. Nothing this good for the mining community since Patrick Roy got into a fist fight in Junior with the Remparts. Torts is long junior miners! Also he knows not to compete for the booth babes. What is a selfie?
I listened to all the talking heads in Vancouver. The message was they have money and are looking for projects to invest in. The problem is that after a bad market for 3 years there are very few companies out there with projects worthy of investment. I think this is a sign of a turn in the market. I suspect this will be the metric that causes the algo trading shorting of the past three years to embarrass their owners.
The other change in the industry right now is the casual acceptance of the concept that the gold market is manipulated by the US government and their too-big-to-fail banks. Hell, even Bourque is posting articles about it. Joe Six-Pack in the USA knows nothing of the fact that China has taken all the physical gold from the market during the last couple years. Even the Indians are getting pissed off that marriages in India are down because the Chinese have taken all the dowry gold so the fair young maidens cannot get married. Seriously, when Chavez asked to repatriate his small amount of gold to Venezuela a couple of years ago who knew it would open up the floodgates. Next Germany asked for a small portion of its gold back from New York. Well that created a bind so Germany has to accept that their physical gold (15%) will only be repatriated over 7 years. Bottom line, the US banks sold it!
On another subject, apart from the Chinese buying all the gold in the world, they also now have their own conference in Vancouver that front-runs the Cambridge conference. They tend to get the best speakers in the industry as well. So I checked it out. Funny thing is the Chinese have lost as much as the rest of us in the markets of the past three years.
The perils of Pauline
Well what else can Pauline do? She is the first political leader in the world to unite Jews and Arabs. Against Bill 60 of course. That famous law in Quebec created to disguise from the fact that the PQ economy in Quebec sucks. I am sure Pauline will be up for a Nobel Prize for uniting the Jews and Arabs. Of course the Jews have been in Montreal for 100 years and are an integral part of Quebec society. The Arabs arrived recently from the Maghreb. A product of PQ attempt to reduce the Anglo influence in Quebec. There are currently hundreds of thousands of Arabs in Quebec thanks to the PQ policy. Both Air Algerie and Royal Air Maroc run daily flights to Montreal. So Bill 60 was an attempt to get Quebec to be a secular society. One that still will recognize Christmas and Easter though so not to turn the Catholic Church against the government. So they are pushing for a secular society where only Christian values are recognized. But they might remove the cross in the parliament of Quebec and will take exception to Christians wearing 5 foot high crucifixes around their necks at work. Real smart Pauline. If she had of listened to Sugar Sammi she would have been alright!
Quebec has done a great job of extracting funds from the rest of Canada for the past 30 years. Now, in order to get reelected, Harper will have to take the position of the majority in the ROC and that is to tell Quebec to take a hike. Of course the Cree are sitting back watching all this. If Quebec can separate then so can they. After all they have most of the mineral rights and almost all of the hydro power. I can see Matthew Coon Come becoming a father of confederation. Many Quebecers will support the move because the price of dairy and maple products will drop significantly!
She really is smart because she finally sold her house that was listed at $8 million. Not sure what it sold for however it was prime waterfront on expropriated land supposedly meant for a new highway. That raises the question how a politician in Quebec can afford an $8 million house but I am but a poor miner, I do not understand that stuff. One of the interesting things in Quebec today is that a lot of francophone are leaving the province as well. Seems it has to do with a certain tax situation. Plattsburgh and Rouse's Point are having immigration issues. So where is Lancaster?
Pauline has been prominent on the international scene as well. She went to Scotland to see about their separatist movement. Unfortunately the Scots are smart. They did not want to be seen with Pauline. They still hope to win a referendum. Then she went to Paris to meet Hollande and get a blessing for her francophone programs. Unfortunately she does not compare to the rest of the Hollande women and was shunted aside.
So Quebec did a good thing for the mining community. They approved a new mining code. Quebec has dropped from #2 mining spot in the world to #12 in 2 years. That was really hard to do. The PQ did it. Maybe it had something to do the Minister of Natural Resources telling all the African ministers at PDAC last year how to extract more royalties out of the rich miners that had something to do with it. The new mining code brought in a new level of bureaucracy, municipalities. We all know how they are not corrupt. The Liberals were going to build railroads and infrastructure across Northern Quebec. The PQ cancelled all that. It is evident by the current stock prices of all the juniors with iron or other metal plays in Northern Quebec. I am lucky I have been in mining for the past 40 years. I do not have to try to understand politics!
So where is the world taking us?
Will there be a Black Swan event. Maybe caused by Iran? Will gold be allowed to rise in price to reflect the devaluation of the US dollar and other fiat currencies? Will junior companies become the darlings of the stock exchange? My prediction, Obama will get jealous of the junior promoters and try to do a selfie with a booth babe. Michelle will get more pissed off and create her own black swan event and gold will then soar to over $2000. The banks will be focused on who will win the divorce dollars and they will ignore gold long enough for it to rise near its true value. Rand Paul will slip in because H Clinton will be deemed too old to last her term. Remember Reagan. Bill Clinton will continue to make a fortune with his forays in to the mining business with Frankie. Silver and uranium will follow in the footsteps of gold. Lead will rise as the major component of bullets becomes scarce as the US closes the last lead refinery in the US of A. That explains why the government bought over 1 billion bullets in the last year. We thought they wanted to control the population. Hell no, they just want to control the futures market! Copper will drop on Chinas realization that they cannot fill all the cities they are building. Recommendation:
Stay tuned. I promise to report back on the booth babe situation from PDAC. Buy good gold juniors before the Chinese snap them all up and delist them.
Until next time ..