Issue link: http://resourceworld.uberflip.com/i/423464
D E C E M B E R / J A N U A R Y 2 0 1 5 www.resourceworld.com 5 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 While there have been some winners in the junior mining sector during the past year, many investors have been disap- pointed and will be selling shares for tax loss reasons. the uGly Junior miners targeting most commodities have been suffering from falling mineral and metal prices, challenges in raising exploration funds, negative investor senti- ment and resulting low share prices. A few are now out of business while others have a severe cash shortage and an uncertain future. While people in the industry as well as resource stock investors realize that mining is a cyclical industry, the malaise in the junior miner sector must be about three years old now. When will the cycle turn positive? Are you ready to capitulate, sell everything at a loss and move on to other investment ideas? After all, a glance at the TSX Venture Exchange Index chart is not a pretty sight. the Bad The recent volatile behavior of gold prices has left many gold sector investors won- dering what the hell is going on. Just when things look hopeless, gold will sud- denly take off like a rocket and rise $50 in two days. What about oil stocks that have been hammered with a 20% drop in crude oil prices? Is this a buying opportunity or will the oil price and oil stocks go lower? the Good If one looks hard enough, there is actually some good news out there. For example, the price of uranium (U 3 O 8 ) has been going up since July when it was selling for about US $28/lb. It is now selling for over US $40/lb and may go higher with Japan re-starting two nuclear reactors. Battered uranium stocks such as Fission Uranium [FCU-TSXV] have reversed their downward plunge and are now gaining in value. The week of November 3-7 saw gold drop to US $1,130/oz then rise to US $1,180/oz. The low price prompted new buyers to acquire the yellow metal and I've heard that Canadian and US mints are now scrambling to produce enough coins. A surprising trigger for higher gold prices that week was Alan Greenspan, former Chairman of the Federal Reserve, saying that gold is the world's premier currency that no fiat currency can match, including the US dollar. Gold bugs, who have been rattled, have been saying that for years and it will be interesting to see if gold and gold stocks have finally bottomed. There is also good news in the oil and gas industry. The price of natural gas hit a low US $3.65 in early November and is now selling for about US $4.42. The recent win by Republicans, with their pro-business outlook, could mean that the Keystone pipeline will go ahead. Some analysts are of the view that Saudi Arabia can't sell their oil below US $75 a barrel as that price level is required to maintain their social infrastructure. This means that we may be near the low in oil prices and buying opportunities could be out there. Like other commodities, low oil prices can lead to cutbacks in production and a decrease in supply results in higher prices. As of this writing, the TSX Venture Exchange has stopped falling and is making modest gains. Let's hope it continues. n The ugly, the bad and the good