Resource Investor Article
'Don't Panic, Start Buying Now'
By Peter Caulfield
22 Jan 2008 at 12:51 AM GMT-05:00
VANCOUVER (ResourceInvestor.com ) -- There were somewhat fewer attendees on the second and final day of the 2008 Vancouver Resource Investment Conference (unlike in the U.S., Monday was a regular working day in Canada) and most of the people surfing the 17 aisles of exhibits were male and wearing suits, in contrast to Sunday's informally dressed crowd of old and young (and very young), men and women. But there was still a healthy attendance, which was quite an accomplishment considering there is a nasty flu bug on the loose in Vancouver now.
In one of Monday's mid-day speaker work shops, Greg McCoach, editor of The Mining Speculator, spoke for a brief 30 minutes on “Quality Opportunities in Junior Mining Shares.” Like almost all of the speakers at this year's conference, McCoach spoke to a standing-room-only crowd.
Distilled to its essence, McCoach's message was “Don't panic, weather the storm, junior mining companies will soon have their day in the sun.”
“I didn't expect things to get so bad so quickly,” McCoach said. “However, I don't think the downturn will last long. Some junior mining stocks will recover quickly, especially companies with great discoveries.”
McCoach advised the audience of about 125 to start buying now.
“Precious metal prices will start to go up and precious metal stocks will go up with them,” he said.
McCoach expects investment newcomers to invest in precious metal juniors, along with investors in the United States.
“U.S. investors are becoming more interested in and knowledgeable of Canadian exploration stocks,” he said. “I expect American investors to flood into the market and that will lift it up.”
But until happy days are here again, the markets will continue to be “quite scary,” McCoach said.
“There's major trouble brewing in the financial markets,” he said. “The Fed in the U.S. wants to bring interest rates down, to prevent a recession, but the European Union central bank wants interest rates to go up.”
Happily for investors in gold, however, the result of these conflicting monetary policies will be a rising gold price and junior stocks will follow the price of gold upward.
“It's a good time to buy junior stocks,” McCoach said, as he finished the formal part of his presentation. “Don't panic. We won't have to wait long. Companies that were trading higher in the past and that have good stories will recover fastest.”
Just before McCoach opened the floor to questions, he mentioned two companies he said were both “good bets” for the near future: Pediment Exploration Ltd. [TSX-V:PEZ] and Golden Predator (not yet trading).
During the brief question-and-answer period that followed his presentation, McCoach said that what had de-railed NovaGold Resources [TSX:NG; AMEX:NG] at Galore Creek was that the costs of the project went up faster than the prices of gold and copper.
“Once the prices of gold and copper start to go up again, and development costs start to fall, you're going to see Galore Creek go into development,” he said.
McCoach spoke enthusiastically about Duluth Metals [TSX:DM].
“They're one of the stronger companies now,” he said. “They've drilled 68 holes and hit mineralization on every one of them.”
He said Duluth is expected to release assay results soon.
Investors shouldn't ignore good uranium companies, either, McCoach said.
“Uranium markets are in a funk now, but they'll recover, like gold,” he said. “Invest in companies that have the nearest-term production potential.”
McCoach said Canadian Zinc [TSX:CZN] is a good speculative investment.
“Everything depends on their getting an environmental permit,” he said. “If they do, they could be in production in six months. It could be a $10-$20 stock.”
McCoach said Excellon Resources [TSX-V:EXN] has a much higher up-side than most silver companies.
“So far they've hit only the tail of the elephant,” he said. “They're hitting mineralization almost every time they drill. They're a top prospect.”
In reply to a question about a company with properties in Turkey, McCoach said, without elaborating, that he did not look favourably on companies with properties in that Middle Eastern country.
Bolivia is another country that is “not okay” with McCoach. South American countries that are “okay” are Ecuador, Argentina (especially northern Argentina), Chile and Uruguay.
McCoach also spoke favourably of a number of other junior mining companies, including Acadian Mining [TSX:ADA], Polymet Mining [TSX:POM; AMEX:PLM], Strathmore Minerals [TSX:STM], Silverstone Resources [TSX-V:SST] and Endeavour Silver [TSX:EDR; AMEX:EXK].