Issue link: http://resourceworld.uberflip.com/i/294363
www.resourceworld.com 5 A P R I L / M A Y 2 0 1 4 E D I T O R ' S C O M M E N T S E l l s w o r t h D i c k s o n Ellsworth Dickson, Editor-in-Chief Email: editor@resourceworld.com T: 604 484 3800 | 1 877 484 3800 It is gratifying to see some mining stocks have already started their recovery, including companies we have recently covered such as MAG Silver, Sandspring Resources, Newstrike Capital, Fission Uranium, Primero Mining, and Probe Mines, to name a few, and it appears that now is an opportune time to pick up shares in undervalued, quality companies. Aside from the sometimes volatile action in gold prices due to geo - political events, there are underlying reasons why the price of gold – and gold stocks – could increase in value. In this issue we interview Ian Gordon, founder and Chairman of the Longwave Group, an economic and market analysis organization. He explains how the Kondratieff Cycle can be used to predict where we heading in the economic cycle. The Kondratieff Cycle tracks the waves of high and low economic growth. With regards to gold, one of the future drivers of higher gold prices will be the increasing unsustainable debt of the United States. The value of the US dollar can't help but decrease in relation to gold. A rise in the price of gold will immediately benefit gold producers and trickle down to those companies with significant ounces in the ground. Leonard Melman, in his Speculations column, as well as Eric and Dennis Hoesgen in their Insights & Investments column, add some more thoughts on gold and gold stocks. Lately, the price of uranium has been trading for about US $35/ lb. As with gold, there are events taking place that could generate an uptrend in uranium prices and shares of uranium companies. In an interview, Alexander Molyneux, a director of several mining com - panies involved in a uranium M&A project, said there will be an increase in the demand for uranium with Japan re-starting some of its nuclear power plants. He noted that the new mayor of Tokyo "stood on a platform of re-starting nuclear power plants. In spite of some opposition, there is a pro-nuclear campaign under way." In addition, he sees higher uranium prices simply because of increasing demand from China which is building more nuclear power plants. "The world needs to mine 50% more uranium by the end of this decade than is currently mined. At today's prices, half of the cur - rent supply is not profitable, so to expand by another 50% is going to require prices of about US $80/lb," Molyneaux said. "We have no choice. The world will need the material and we need to have a price that allows the expansion on the supply side." Tying in nicely with our feature Exploration & Mining in British Columbia, the recent Fraser Institute Annual Survey of Mining Companies indicated that BC is more appealing to explorers and mine developers. As far as mineral potential is concerned, BC came in fifth out of 112 global mining jurisdictions. However, the province came in 32nd when it came to mining policy. Here, there is room for improvement when it comes to questions regarding which areas will be off limits to exploration as well as clarity of obligations to First Nations. In my opinion, it seems unfair that mineral explorers should have to come up with First Nations agreements that the BC govern - ment should have dealt with decades ago. Another important current BC resource topic is the new LNG industry which Bruce Lantz covers in his feature. n Are resource stocks in a recovery phase? By Ellsworth Dickson