Vancover Resource Show- optimism/cautiousness EXPLORATION
On junior market bottoms from VRIC 2014
There was much talk of market bottoms at the two-day Vancouver Resource Investment Conference in Vancouver.
Author: Kip Keen
Posted: Tuesday , 21 Jan 2014
Vancouver, BC (MINEWEB) -
Yesterday I noted the surprising optimism on the floor at the Cambridge House Vancouver Resource Investment Conference (VRIC). A collective fear, with us for a few years now, has dissipated. At least some.
I think Panoro Resource's Luquman Shaheen hit on something yesterday, describing the feeling here last year at this conference as scared caution. True of 2013 in general for the junior market. But this year he called it cautious optimism.
It fits.
Joe Martin, the Chairman of Cambridge House, said to me that he thought the better mood was pleasant surprise given incredibly low expectations.
That fits too.
There is a sense that perhaps the worst is behind the junior market. It's a new feeling. Looking at a chart of Venture Exchange over that past few years lends some hope. In recent months it looks as if the downward trajectory of the Venture index from around 2,500 three years ago to under 1,000 in early 2013 has slowed, or stopped, and maybe - my god - even reversed course a little. A very, very, very little. The Venture has been moving sideways since about mid-2013 and in recent weeks it has been on a nice run, up about a hundred points.
(See varying opinion from the floor on that here.)
Indeed, there have been some notable shareprice moves through late 2013 and into early 2014 on the Venture that suggests some caution - risk aversion - has been thrown to the wind. It caught my eye Friday when a junior, Excelsior Mining, tripled on the release of their prefeasibility study.
What struck me is that the PFS didn't make a revolution in Excelsior's Gunnison copper project. It bolstered and added detail to a similar 2011 preliminary economic assessment. But buyers reacted with force and pushed the stock - heavily off highs over the past few years - up dramatically. Perhaps this move, among others in some juniors around year end, suggest a return of some appetite to get (back) into the junior game.
A number of the usual suspects among VRIC speakers were of the view the bottom was "in." John Kaiser, Rick Rule, Lawrence Roulston and to some degree Brent Cook were among those espousing bottom or near bottom talk. As Rule put it during a panel on exploration stock, "I would suggest, overall, the best quartile or decile of the juniors have already put in a bottom." The caveat here was not to expect an adrenaline fueled run back up Venture Mountain.
But, that said, if there was a theme connecting, Kaiser, Rule, Roulston and Cook, it was that it was time - or time to consider - some selective stock picking in juniors. Rule was most forceful in making the case, suggesting that if you don't do some selective buying now you might miss the boat on market revaluations, whenever they might come. Because when they do, they would come quick.
Cook sounded more cautious. "I think it's a market you can wait a bit before stepping in," he said, also during the panel talk on exploration. It's a strategy he has deployed on several occasions in recent years. The market, in his view, was still somewhat slow to react to compelling exploration results. And dump them when they turned a little sour.
Juniors, by the way, especially the harder-up exploration companies, won't be slow to react to this sense of optimism, fleeting or not. Consider an offhand remark from Ian Foreman, the President of Alta Vista Ventures, a junior explorer with a ~C$500,000 marketcap. He put his view of the market - and the pursuit of cash - this way: "Maybe it's a dead-cat bounce. It doesn't matter to me," he said. "I'll take it and see what I can do with it."
He won't be alone. And it will be curious to see if markets pry open their wallets, long closed, to the junior explorers even if it is only ever so slightly. We'll check back on that point come PDAC in March. For in considering the matter of optimism now, the caveat descriptor cautious matters greatly.
Topics: Venture, Vancouver Resource Investment Conference, Cambridge House, gold, gold stock, mining equities, gold price