Resource World Magazine

d e c e m b e r / j a n u a r y 2 0 1 6 www.resourceworld.com 9 • Permitted state-of-the-art heap leach processing facility • NI 43-101 compliant gold resource of 552,000 Measured and Indicated and 165,000 Inferred ounces of gold • Contiguous land package covering more than 25,000 acres PershingGold.com | PGLC FAST-TRACKED TO PRODUCTION The possibility of streaming deals between seniors and companies like franco-nevada Corp. [FNV-TSX, NYSE], royal Gold inc. [RGL-TSX; RGLD- NASDAQ] and silver Wheaton Corp. [SLW-TSX, NYSE] are also worth watching. For example, an agreement was announced on November 3 that Silver Wheaton will pay $900 million to secure future silver pro- duction from Glencore's Antamina Mine, in Peru. Considering this trend, Rule estimated between $5 billion and $10 billion worth of transactions beneficial to all parties might be agreed going forward. "And that's some- thing I've not seen before," he said. For an investor confident with more opaque markets, Rule speculated on norilsk nickel [MNOD-LSE; GMKN- MOEX], as well as the large Polish copper-silver miner KGhm Polska miedź sa [KGH-WSE]. At the junior level, the outlook was more mixed, with too many non-viable companies continuing to muddy the waters. "We need the juniors to start working well. Unfortunately, the junior landscape – not just in Canada but around the world – is polluted by 60-65% of those listed being non-viable. They need to go to company heaven," Rule said. Fortunately, there are plenty of com- panies who have been weathering the conditions while making noteworthy progress. Preston noted the October per- formances of Lakeshore Gold Corp. [LSG-TSX]; Klondex Ltd. [KDX-TSX; KLDX-NYSE MKT]; Tahoe resources inc. [THO-TSX]; and, albeit still in the earlier-stages, Kaminak Gold Corp. [KAM-TSXV]. She also highlighted B2Gold Corp. [BTO-TSX; BTG NYSE MKT] and new Gold inc. [NGD-TSX, NYSE MKT]. Other top-tier juniors are realizing that they must also move forward or risk redundancy. For some, this will mean raising cash on terms they might have blanched at just a few years ago. However, decisions like these at a collec- tive level will hopefully build momentum for the sector. "And it's the big picture that matters," Preston said. "So you're looking for con- trolled costs; money in the bank; great management; an investment plan that makes sense; and, where applicable, a ris- ing production profile over the next few years." Beyond base and precious metals, she was also interested in lithium, not- ing supply shortages and technologies set to bring down production costs on top of demand factors that look significant. She also noted that it could appeal to those investors keen to invest in clean technolo- gies and renewables. In the meantime, leadership and a determination to succeed among juniors remains essential, Rule noted. "It's time for the best of the best to say: 'We're build- ers and understand that we don't generate cash, but that we can't save our way to prosperity. We have to issue equity on terms that clear the market and we have to grow'." This patience, determination and, indeed courage, are virtues investors will have to adopt as well; the road might be long and winding, but rewards can be found at journey's end. n

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