Yearly Archives: 2012

Graphite Stocks Gaining Investor Interest In Tough Markets

Graphite Stocks Gaining Investor Interest In Tough Markets
Check out my recent quote in Mining Weekly's article on Graphite. It would seem as if there is a new darling in the minerals market, as investor interest in graphite was seen rocketing over the past year. From a total of about four listed companies making it their business to supply hungry markets with the carbon allotrope in 2011, the number of listed firms had increased to about 30, with most listings taking place since the beginning of the year. Analyst Jeb Handwerger said that during the year, graphite had performed strongly, outpacing the generally depressed market.
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Why This Alaska Heavy Rare Earth Mine Is Unique

Why This Alaska Heavy Rare Earth Mine Is Unique
Recent headlines inform us that the Obama Administration has finally decided to increase pressures on China in the rare earth quandary by joining Japan and the EU in the case before the World Trade Organization. This may be a move motivated by the upcoming national elections as well as the pressures placed upon the President to say something or anything in response to Romney’s support of Bokan Mountain (Ucore) where he wrote an open letter to Alaskans emphasizing that their state is in the vanguard of America reclaiming rare earth independence.
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Mining Giants Are Looking To Lockup Long Term Supply Of Uranium and Rare Earths

Mining Giants Are Looking To Lockup Long Term Supply Of Uranium and Rare Earths
Global miner Rio Tinto announced that there were increasing risks of a supply shortfall in strategic metals. The majors are dealing with the rise of resource nationalism and rising permitting difficulties for new mines. Countries such as China, Indonesia, Namibia and Argentina among others have already expressed that they want a bigger slice of the pie adding export taxes and forex requirements. Recently one of our recent rare earth/uranium recommendations Pele Mountain announced an Updated PEA for its 100% owned Eco Ridge Mine Rare Earths and Uranium Project. The numbers are very compelling especially considering its dual advantage of potentially producing rare earths and uranium at a time where we may witness a supply shortfall in these metals. Already there are uranium mines operating at much lower grades than Eco Ridge's. With the growing rise of resource nationalism and the supply shortfall in critical rare earths and uranium, Pele's Eco Ridge seems to be a logical choice for majors desperate for new, economic, long life supplies of uranium and critical rare earths. The Ontario Province may see Elliot Lake as a strategic supplier of critical metals and uranium required for cheap and clean energy.
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Pullback In Graphite Stocks Presents Buying Opportunity

Pullback In Graphite Stocks Presents Buying Opportunity
Graphite is gaining investor’s interest as it is one of the few sectors in the natural resource space which has been outperforming the S&P 500. The S&P 500 has been hitting new highs while the Canadian Venture Index is hitting new lows. In 2012, graphite has been one of the exceptions rising in a down market. Graphite stocks have hit new highs and have recently pulled back, while gold and silver miners have hit 2 year lows. This demonstrates excellent relative strength in an overall weak natural resource equity environment. Why are graphite stocks outperforming?
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Will Biggest Reduction In Interest Rates In Three Years Increase Gold and Silver Demand?

Will Biggest Reduction In Interest Rates In Three Years Increase Gold and Silver Demand?
Treasuries are rallying on fears of a slowing economy in the U.S. after weak economic data was released recently and as geopolitical uncertainty increases in the Eurozone. France has an election May 6th, where we may see a possible changing of the regime. Sarkozy has been one of the central players in this debt crisis. European leaders have been unable to manage debt loads. Austerity measures are failing. The U.S. is in an election year as well. It seems doubtful that European governments and Central Bankers will allow conditions to worsen without stimulative interventions. We may see further moves before the U.S. election which could keep interest rates low and at the same time stimulate growth. The tool at their disposal is extension of Operation Twist or a new QE or a new LTRO by June should the economy weaken or should unemployment rise. Spain is experiencing their second recession since 2009. We are seeing failed austerity measures. GDP decreasing and debt loads increasing will force the ECB to form another round of LTRO to refinance troubled banks. Spain may also consider fast tracking some precious metal assets to provide jobs and revenue to the country. Spain has around a 25% unemployment rate. We have been looking at precious metals and commodity assets specifically in Spain as we are observing a positive change for mining to boost jobs and the economy. There is a strong interconnection between US banks and European Banks ergo we have a rising fear of debt contagion which could put pressure on the U.S. Economy. Bernanke is well aware of this and changed his tune at the last meeting where he stated that Central Bankers stand ready to add stimulus should the economy demand it. This was definitely a hint at QE3 where the Fed prints dollars to buy bonds keeping interest rates artificially low so the government can pay down its rising debts, stimulate growth, and devalue the currency to punish savers.
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This Gold Miner Is Trading At A Significant Discount To Bullion

This Gold Miner Is Trading At A Significant Discount To Bullion
Wall St. tends to attract investors to stocks that the crowd is bidding up, while ignoring companies that are trading at significant undervaluations to their peers and to the overall market. This gold miner is developing one of the largest mother-lodes of gold (20+ million ounces) right here in the United States in the mining friendly area of Fairbanks, Alaska.
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Gold Price Will Continue Higher as Rate Of New Discoveries Decreases

Gold Price Will Continue Higher as Rate Of New Discoveries Decreases
Junior mining stocks are at record oversold levels, rarely presented to investors. This may be representing a historic bargain basement buying opportunity. Long term mining investors are aware that the rate of new gold discoveries is decreasing despite record exploration expenditures from the majors. Enter center stage, a rising project generator, who uncovers new greenfield exploration targets...
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Bottom Forming In Precious Metals and Miners

Bottom Forming In Precious Metals and Miners
This is an ideal time to make this move, the U.S. dollar appears to be stronger for the time being, U.S. bonds are selling at relatively record low yields, unemployment remains high, commodities/precious metals have significantly corrected and the risk of inflation has abated. In fact, they may be already printing LTRO 2 to staunch the Eurozone collapse. Just as QE2 was used by the Federal Reserve Board to staunch the bleeding of the Eurozone in 2010, it is entirely possible that they will institute the latest version of can kicking down the road. Let us hope they “follow the yellow brick road” and we may witness a rotation from overbought equities into tangible assets, commodities and mining equities.
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Why This Gold Miner Has Considerably Outperformed The Sector Since 2008

Why This Gold Miner Has Considerably Outperformed The Sector Since 2008
China is easing financial and fiscal policies for at least the first 6 months of this year. This action is letting the world financial markets know that carefully chosen mining equities are the place to be. China has flipped the “risk on”switch for precious metal equities. Inflationary forces, possibly gut wrenching are in the cards. The losers may well be the possessors of dollars and purportedly safe treasuries. This will be the impetus to move capital out of cash,treasuries and overvalued banks into mining equities and commodities.
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