TORONTO –The ritual of PDAC arrives this week in a city so c’est dang cold, even Russian miners are wearing their fur caps.
As for merchant bankers, executives and mining promoters crawling 18,000-strong across the city, well, they are hot in the chase. They are raising money for the first time in 18 months.
The suits, scuttling between the city’s Royal York hotel and the convention center, are evolving their slide shows. In some cases, they are buying cocktails … and steak dinners.
Mostly, they are predicting the future of a) natural resources; b) merger transactions; c) mine lifespan; and d) bubble lifespan.
To be fair, using the term “bubble” for rising prices of platinum, gold, silver, lithium, uranium is baronial. A word one might expect to find in The Economist. At this minerals show, anyway.
One pretend PDAC poll (mine, actually) has 17,840 attendees predicting $2,000-and-higher gold, $3,000 platinum and $50 silver … and 149 folks, cynics and pragmatists mostly from Surrey, England, forecasting status quo or profit taking for precious and specialty metals. Eleven people here don’t care and instead of probing markets for lithium carbonate, molybdenum and other specialty metals.
“The best way to predict the future,” CEO Judy Baker of Canada Lithium (TSX: V.CLQ, Stock Forum) told me, “is by making it.” Ms. Baker’s microscopic company owns prospective lithium properties in Quebec and in Nevada.
In the toasty confines of Toronto’s Convention Center, amidst the endless aisles of mining company booths, observers, both professional and garage-loft investors, probably are best served by focusing not on precious metal prices but instead on currency exchange rates and prices of copper and nickel.
“We are benefiting enormously from the cheap peso,” CEO Bradford Cooke of Canada’s Endeavour Silver (TSX: T.EDR, Stock Forum) told me. “But we are also aware of how that can change in an instant.” Endeavour mines silver at two properties in Mexico and enjoys lower expenses today than it did a year ago, when the peso was almost 40% stronger against the U.S. and (to a lesser extent) Canadian dollar.
A rising copper price, as well as nickel and even silver, provides bottom-line bounce to gold and platinum miners, too. Byproduct metals (there are others – molybdenum, for one) are as welcome at the mill as bullion and factor into gold-equivalent, silver-equivalent and platinum-equivalent prices.
Just ask any of the several dozen fledgling and wanna-be mid-tier bullion producers at this PDAC Canadian scrum. Or better, the bankers courting these scruffy miners’ business.
Then and now
Stock-market valuations depend in part on those byproduct calculations. And for miners, everything comes down to stock price, even when they are raising money in death-spiral convertibles or tight-fisted flow-thru financings.
Just be on your guard, as one truthful mining chairman told me: “The only difference between golf and mining is in mining, you get to improve your lie.”
PDAC 12 years ago: Michael de Guzman. Busang. (See:Bre-X Minerals.) Lies. Helicopter denoument.
PDAC today: Transactions. Merchant banks. Financing pipes. Mexico, for one. The nation is wracked by drug runners, assassins and that plunging peso. But the Calderon administration has yet to tinker with the rapid permitting process that greets foreign-owned silver mines.
The next 10 mining mergers, property purchases or takeovers you read about will start evolving at this show or get signed at this freaky and freezing show (Fahrenheit 15). Some of them, such as Endeavour Silver, whose executives say they are “on the hunt” for family-owned or Canada-traded silver mines and resources in Mexico’s Sierra Madre, might result in majestic premiums. (We here at home own no Endeavour shares and receive no compensation from the company.)
In truth, these “deals,” some involving the world’s largest miners in their search for a resource boost and others linked to distressed miners with terrific field teams but little cash, are the transactions that were not reviewed over Tanqueray & tonics in balmy Florida last week. (See:BMO Capital Markets show.)
You see, BMO is the Queen Mother of money shows for producing miners. Like the statue the Queen of England just unveiled of her late mother, the Queen Mum, who passed away several years ago at age 101, the BMO is a big deal. Lots of poorly kept secrets. (Click here for last week’s BMO streams.)
From what I can glean at this PDAC, Latin America looks ripe for invaders, and that includes Mexico and Colombia, which used to be the southland’s largest gold producer many decades ago. Take it from me: margaritas are best served rimmed with tangerine-flavored salt.
As Clive Owen at the bar says in upcoming Julia Roberts flick DUPLICITY, “Well … that … sounds good.”
I’ll have more for free readers of ThomWatch™ on Stockhouse and for paying subscribers of Ticker Trax™ on Stockhouse later in the semana.)
No shows
Finally, of note are the honchos who elected to skip PDAC this year, among them Ross Beaty, best known as founder of Pan American Silver. Beaty tells me he is chasing geothermal properties in toasty Indonesia.
Others who are absent: James Turk of money service GoldMoney.com. James says his business, which stores gold grams in savings accounts for ordinary folks, is going gangbusters.
Robert M. Friedland, chairman of the Ivanhoe Capital cadre of metals and energy companies, at last word will not be at PDAC. But his Mongolia team will be, he tells me. (Mr. Friedland appeared at BMO in Florida.)
Bill Murphy and Chris Powell of GATA.org, the Gold Antitrust Action Committee, sadly were not here. “We’ve never been invited, not once in our 10 years,” Murphy, who is one of the mining world’s most colorful and generous souls, tells me. (Which begs the question: For all these two have done for making the case for “higher gold,” is it not time for PDAC organizers to put them on a hired plane to town?)
CEO Ferdi Dippenaar of Great Basin Gold (TSX: T.GBG, Stock Forum) decided to make the trip at the last second, after first beaming his South Africa and Nevada geologists and other team members into Toronto. (Ferdi also appeared at BMO. GBG is one of the three Ticker Trax planetary prospects upon which we are staking our personal capital. See: www.tickertrax.com.)
Which all begs the next question: Is it not time to stage just one PDAC somewhere sunny? Grenada would do.)
Finally, the late Mr. de Guzman is not at this metals bash, as he is quite dead.
Ticker Trax™
Ticker Trax By Thom Calandraexplores planet Earth for a handful of stakes and strategies that offer the prospect of excellent, in some cases cosmic, returns. The new service is for those who can cope with stratospheric levels of risk attached to a handful of planetary prospects. (Please see www.tickertrax.com.)
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THOM’S STORY:Thom Calandra during 27 years of road work has helped his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch, MarketWatch.com and FT MarketWatch in Europe. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom fancied $300-ounce gold before that metal became an investment rage. Thom visited bioscience companies, metals mines and energy companies in a search for reliable sources and fine planetary prospects. (He was imperfect in at least one regard, having settled a U.S. Securities & Exchange Commission complaint in 2004.) Thom's novel PABLO BY NUMBERS was completed in 2008.
HOLDINGS: Thom’s cosmos of holdings is listed for free Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. He and his family own recently minted gold coins. They own shares of Great Basin Gold. They have no interest in any publicly traded Ivanhoe company but do own shares of a privately held Ivanhoe company looking for opportunities in South Africa and The Congo (DRC).
For the free ThomWatch, please click here. For subscription service Ticker Trax, please visit www.TickerTrax.com. Thank you!
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