Resource World Magazine

AT T H E M A R K E T Ro d B la ke Recovery Bound T here is no denying that the resource markets have been sick for some time now. Yes, very sick for nearly three years. They first caught a cold in April 2011 when that disastrous tsunami hit the coast of Japan and caused the price of uranium to begin its rapid descent from US $105/lb to just above US $35 today. And just like someone who first catches a cold, investors first ignored this initial setback as a one-off as the rest of the resources, especially gold bullion, were still doing extremely well. But the cold turned into a full blown flu when the price of gold broke from its record high of US $1,923/oz in September of the same year. The flu got worse when base metal and petroleum prices also moved lower and eventually most resource investors were buried, huddled on their couches and feeling sorry for themselves. Finally, they couldn't stand the look of their portfolios anymore "The worst of this resource sickness is over" and when the price of gold bullion fell to US $1,179/oz in late June of this year, they sold their holdings into the market as they drove the TSX Composite Index down to 11,759 and TSX Venture Exchange down to a multi-year low of 859. 30 www.resourceworld.com RW December 2013.indd 30 From these deep lows, the resource markets slowly began to recover, and just like someone recovering from a bad flu, the recovery was tentative at best, and even though the resource market started to feel better, there was still one last relapse yet to come. This began in September with a series of negative reports from Gabriel Resources Ltd. (permitting issues), Augusta Resource Corp. (false press coverage), Pretium Resources Inc. (resignation of consultant), and Detour Gold Corp. (resignation of CEO ), among others, that resulted in some culminating selling in late November. And that's where I think the resource markets are today. Almost all of the bad news from companies to resource pricing is behind us. Those who really wanted out left in June to November. With the possible exception of year-end tax loss selling, I just can't see from where much more selling will come. The worst of this resource sickness is over and, as we enter 2014, I'm thinking that this near three-year bear market has run its course and soon these issues will begin to feel better once again. And, just like someone finally getting up off the couch after a prolonged flu, once you start to feel better, it's amazing how much brighter your outlook becomes. You watch. The market, just like recovering people, will once again focus on the good instead of the bad. More chicken soup anyone? Rodney Blake is an Investment Advisor with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp., Member Canadian Investor Protection Fund. The information contained in this article is drawn from sources belivied to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp., or its subsidiaries, or affiliated companies, assume any liability. This information is current as the date appearing in this article, we do not accept assume any obligation to update the information or advise on further developments relating to these securities. This article should not be considered personal investment advice or solicitation to buy or sell securities. Canaccord Genuity or holdings of its respective directors, officers and employees and their associations, from time to time, may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord Genuity Corp. Rodney Blake can be reached at 604643-7567 or rod.blake@canaccord.com n DECEMBER/JANUARY 2014 12/11/2013 6:12 PM 13A-SV-7

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