❝ This fall the best
Hi Ho Silver Resources Inc.
10% of [junior]
issuers will bottom
out and begin
to head up.
CNSX - HHS.
Frankfurt - H 9 T.
TOWARDS PRODUCTION
❞
GOLD-SILVER
world who would like to live, like us, with
energy-intensive lives, so uranium has to
be part of the energy mix."
As far as the general junior mining sector goes, Rule isn't expecting a turnaround
any time soon. "The excesses that were
bred into the sector in the 2002 to 2010
bull market were so extravagant that they
need to be wrung out of the system. It's
my belief that, on a worldwide basis, probably 70% of junior exploration companies
are valueless. I may be wrong, but I believe
that the market has already started to
bifurcate, or if it hasn't, will bifurcate this
fall where the best 10% of [junior] issuers
will bottom out and begin to head up. But
it won't feel like it because there is probably something like 2,500 junior explorers
worldwide that don't have any value.
Back in the 1990 to 1992 bear market,
there was a cleansing of the market that
was very healthy. When the diamond discoveries were made in 1993, the response
to the market, that was cleansed of the
lame companies, was spectacular." Rule
says that cleansing of the market can lead
to a spectacular and violent recovery. He
notes that investors must target companies
that not only have a good project, but good
fund raising ability.
"It probably takes a minimum of
$600,000 a year for general and administrative expenses to run a junior exploration
company," said Rule. "This means the
company must have the ability to raise
and intelligently allocate $2.5 to 3 million
a year to have a meaningful exploration
program. We need to cut the market back
to where it's viable. Investors need to carry
out qualitative differentiation [to seek out
the best companies in which to invest.]" n
JULY 2013
NEW National Instrument 43-101
Oliver, British Columbia
Fairview Property
GOLD
La Ronge, Saskatchewan
New Zone English Bay Property
Phone: +1(778).868.9424
Email: dennis@hihoresources.com
www.hihoresources.com
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