Resource World Magazine

A P R I L / M A Y 2 0 1 6 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 In thIs Issue Resource World interviews mining analyst, John Kaiser, a well- respected and popular speaker at resource stock investment conferences. While he usually focuses on exploration companies and their chance of developing economi- cally viable mining operations, this time he has turned his attention to the venue where the shares of most of those junior exploration companies trade. Kaiser believes that the TSX Venture Exchange could be doing more to help junior miners in light of four years of a downturn in junior mining stocks. See page 16. However, I also wanted to get some feedback from a successful junior explorer listed on the Venture Exchange. Thus, I sought out some comments from Bradley Kitchen, Chairman and CEO of secova Metals Corp. [SEK-TSXV]. Previously, he was President and CEO of Eagle Hill Exploration until it was taken over. He has also served as Vice President of CIBC World Markets. Brad Kitchen noted that for the past four years, many junior explorers have been suffering from low commodity prices and negative investor sentiment. "It is very difficult in these markets; however, we have been lucky to be one of the few companies that have been able to raise significant capital," said Kitchen. "The flow-through share market is attractive for junior explorers because we are not in need of the tax credit to offset profits. It's a far more attractive way for us to raise capital, on a less-dilutive basis, since flow- through shares can be issued at a premium over a non-flow-through offering. The challenge is working with funds that are willing to take the risk with juniors." Kitchen explained that in our slumping commodity market the biggest problem is investors that just want to stay away from junior explorers. "Our approach is to take a long-term view of our assets and create more value in the asset itself as opposed to worrying about short-term press releases, for example." He said that Secova takes a longer view and moves its projects for- ward by continuing to explore. His view is that by advancing projects they will be far in advance of other companies when the market turns around. "This is how we have been able to raise capital." Presently, gold and lithium appear to be gaining interest. I wondered what advice Kitchen would offer juniors as to focus- ing on those commodities or staying the course with their current projects? "I'm a strong believer in sticking with what you are good at," he said. "One can diversify too much. We want to stick to gold in Québec." With regards to potential improve- ments at the Venture Exchange, Kitchen thinks John Kaiser has some good points; however, his own experience with the Exchange has been positive. "It is expen- sive to maintain our listing and there are a lot of fees associated with financings, plus there are arduous reporting requirements," he remarked. "For the most part we have found the Venture Exchange does offer a fairly viable platform in which to access capital markets. I think these higher stan- dards can translate to more security for the investor, not only in these down times but also when the market is moving quickly. Are there things the Venture Exchange could do to help juniors? Absolutely." n Looking at the TSX Venture Exchange

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