TORONTO – This is all we need to know about this year’s elemental rock fest: the folks running the gold rush are no longer the carpetbaggers.
Instead, the mining industry’s power brokers are turning out to be the scuffed men (and a few women) who always have believed rock beats paper. At long last, investors are staring to snub the promoters and value the gangs out there in the fields of Quebec/South Africa/Mexico/Nevada/Mongolia/Saskatchewan.
PDAC, the prospector’s trade group for the mining industry, traditionally has enrolled grubby geologists and their sun-burnt teams amid a spectacle of banquets, free liquor and trinkets galore.
My tinny connecting flight to Toronto held approximately 48 guys en route from South America and Africa and just three or four women.
There was more dandruff and bad breath on that plane than a teen-ager’s bedroom. But this year, whilst the bankers and promoters dined at Toronto’s power-locus spots, the grubby geologists at their trade booths and in technical presentations were making their cases for copper, nickel, gold, silver, lithium and uranium.
The real people’s parties, like the one Rob McEwen (that is his picture just below) of Red Lake’s Gold Corp. (NYSE: GG, Stock Forum) staged at 1 King West, were the messy yet charged affairs with hooting, cheering and saloon-style sawdust on the floor.
These are my best lines from the yearly Toronto trade show, be they the geologists who drive the bus or the executives and bankers who ride the stretch limos:
CEO John Macken of Ivanhoe Mines (TSX: T.IVN, Stock Forum), which is near a new pact with Mongolia's mining officials: “If you have a project or a proposal, please come to see us. We’re very open to that right now.”
Craig Williams, CEO of Equinox Minerals, which mines copper in Zambia: "We are one of the top 20 copper producers in the world this year," Mr. Williams said as he pointed to a chart of the copper leaders. "And don't look too closely at that graph as the names are changing."
Sean Roosen of Quebec’s Osisko Mining (TSX: T.OSK, Stock Forum), developing what looks like a world-class mine in Quebec: “Management has always said, ‘We are building a mine,’ and if we get taken out (purchased by a major gold producer), they will be buying a mine, not a resource.” (Entire story: Osisko ‘all in’)
David Mason of Toronto’s small merchant bank, Augen Capital (TSX: V.AUG, Stock Forum): "The last time I bought bank stocks was 1992, but now they're starting to look interesting again." (David is the Dad of Sean Mason, who writes and edits for Stockhouse in Toronto.)
R. Edward Flood, a London, England-based managing director of Haywood Securities and himself a Nevada-trained geologist: “Too many companies still around. They are burning up dollars on overhead for projects that are so far out of the money they will have to be mined by aliens in the next century.”
Rick Rule of Global Resource Investments: “Bullish to the point of being delusional.”
Ike Pastroumas, an individual investor and part of the team of Ike & Mike, two regular guys who shared a cup of coffee with me on the convention floor: “I would characterize the show as cautious optimism from the junior gold camp and a bit of anxiety on the part of the base metal companies. I came away with the sense that the gold companies have the same long-term outlook as most gold bulls, but they're cautious due to the lack of share price appreciation.”
Tom MacNeill of 49 North Resource Fund in out there in Saskatchewan: “I think folks now realize Canada has a good shot at producing the world’s next major discovery of precious metal, so I can tell you with a wink and a nod, Saskatchewan has more than just potash.”
Peter M. Aitken of Toronto’s Union Securities Ltd: “Not sure what I enjoyed more, actually getting a reservation this week at One on Yorkville … or being seated at a table next to Robert Friedland, whom I had not seen in years.” (That’s a photo just above that I snapped of Mr. Friedland -- at his home last summer in California. Look closely and you can see me in the sunglasses.) Peter added, “More importantly, my dear boy, you must try the chestnut ravioli with raisins there (at One), simply marvelous.”
And finally, my friend Adrian Day of Adrian Day Asset Management in Maryland: “Many of the exploration companies I spoke with were pleasantly surprised at the positive interest in joint ventures. Oh, and Bymark is a great restaurant. Senses has great chocolates ... and boy was it cold!”
My “summary” take on it all: 1. I am more convinced than ever that silver miners in Mexico and across South America will benefit from cheap, family-owned assets and favorable currency exchange. 2. Specialty metals such as lithium and molybdenum are worth a look-see right now. 3. Let’s put some of the planet’s far-fetched exploration companies out of their misery. And 4. Best value for money in Toronto: The Suites at 1 King West for sure.
That is all for now. (For more, please see:Country risk is everywhere at PDAC.)
Next week, I hope to deliver to paying subscribers of our Ticker Trax™ service a word or two from author Doug Casey of the classic self-help guide CRISIS INVESTING. I reached Mr. Casey via Skype at a residence in New Zealand. Please stay tuned.
Ticker Trax™ Update
Ticker Trax By Thom Calandra subscribers: Up next week -- some thoughts about a Mexico silver miner. I also will meet with a U.S.-based molybdenum explorer. (Please see www.tickertrax.com.)
THOM’S STORY:Thom Calandraduring 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. 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.
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