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Resource World - Dec-Jan 2020- Vol 18 Issue 1

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D E C E M B E R / J A N U A R Y 2 0 2 0 www.resourceworld.com 7 Editor's Comments Ellsworth Dickson Ellsworth Dickson, Editor-in-Chief Email: editor@resourceworld.com T: 604 484 3800 | 1 877 484 3800 T hose who have checked out the TSX Venture Composite Index have no doubt winced at its poor performance over the past couple of years barring a few notable exceptions. Shares of precious metal producers did increase significantly in value when gold and silver prices rose in September; however, many junior explorers have had a hard time despite various fac- tors pointing to a possible rebound that hasn't yet arrived. For example, numerous mining analysts are of the view that a bull market in gold is just getting started but, unfortunately, the hoped-for trickle-down effect from producers to explorers hasn't taken place. One aspect I hadn't heard much about until mining stock ana- lyst, John Kaiser, gave a presentation at a recent Metals Investor Forum in Vancouver. He noted that, on Friday November 15, only $9.4 million worth of shares traded on the TSXV. He said that is an unsustainable amount for the Venture Exchange heavily weighted in junior miners Kaiser thinks the Venture Exchange needs more retail inves- tor participation. For years, it has been the Baby Boomers that have invested in junior mining stocks. "In 2020, there will be no Boomers left under the age of 55 and that's a bad thing," noted Kaiser. Time marches on and Boomers are dropping out due to the fact that high risk-high reward junior resource companies are not suitable for the elderly. Instead, some seniors go to online dis- count brokers while others have died. Kaiser believes that the answer is new blood in the form of Post-Boomer participation. The problem is that most Post-Boomers don't know anything about investing in the junior resource sector – thus, no participation. "The space is dying because the audience is not being regen- erated," said Kaiser. "[Something] needs to be done to bring the Post-Boomer generation into the resource sector, an important part of Canada, so it continues to thrive." Dwindling market participation has kept junior resource stock prices low, making it harder for junior explorers to complete decent financings. Kaiser commented that with the Post-Boomer generation focused on doing something about climate change, three metals that could catch their interest could be the $3 billion niobium market as well as scandium. Niobium makes steel stronger so less steel is needed to build things. Scandium does the same thing for aluminum; however, the market has not yet been developed. Then there is the cobalt sector with that metal used in electric vehicles. The EV market is set for huge growth that will be partly fuelled by Tesla's new electric pickup truck (and others coming) and Ford's electric Mustang crossover – vehicles that people have been craving. Kaiser thinks Post-Boomers should look at gold as a hedge against uncertainty going forward considering that gold fun- damentals are lining up for a significant price increase that will benefit not just producers but explorers and developers as well, by the process of leverage. "The Post-Boomers need to be shown how to do this," said Kaiser. While Post-Boomers love their cell phones, they might ask where the minerals came from to make their phone – a country with good environmental regulations or a country without strong environmental stewardship regulations. Post-Boomers are keen to be good environmental stewards and would logically be attracted to investing in companies on the positive side of environmental- ism. However, the trick is to find ways to make Post-Boomers aware of investment opportunities in junior mining stocks. Others have good ideas for helping the Venture Exchange to become healthier. Terry Lynch, CEO of Chilean Metals Inc. has launched Save Canadian Mining – an advocacy group created to give voice to the specific interests of Canada's junior mining sec- tor. Save Canadian Mining will work to raise awareness for this important segment of the country's economy and advocate for positive change on their behalf with government and regulatory agencies. The campaign will be lobbying for revisions to existing mar- ketplace rules and regulations that have created severe challenges for junior public companies in the sector. "The current rules in our equity markets have created an environment where predatory short selling practices to thrive, particularly on our vulnerable junior markets," said Lynch. "For smaller cap mining companies, short selling activity spooks true investors into selling prematurely, effectively stunting the growth of these businesses at critical early stages. Save Canadian Mining is dedicated to helping ensure Canada's capital markets remain viable for junior miners now and into the future." "As an active investor in the mining sector, I recognize the need to reinstate the 'tick' test rule. Save Canadian Mining is providing leadership for the junior mining community during an important time. Regulations need to change and this campaign is going to help achieve those changes," said Eric Sprott, CEO, Sprott Mining Ltd. n Two ideas for a healthier TSX Venture Exchange

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