Issue link: http://resourceworld.uberflip.com/i/685011
24 www.resourceworld.com J U N E / J U L Y 2 0 1 6 in supplies has led to lower global oil and gas prices and more competitive pressure on the uranium space. The same factors that drive copper prices will ultimately drive uranium. From my point of view, it will not be from demand creation that drives the uranium market in the next five years. Like copper, it will be supply destruction. We are actually seeing decent inter- est in uranium stocks – two in particular – NexGen Energy and Fission Uranium – but the excitement that we are seeing there is more of a discovery excitement than a general uranium excitement. If you had the same in-situ values of copper or gold that you have with NexGen or Fission, they would still be commanding attention. Those are discovery stocks, not uranium stocks. A uranium recovery will take place because of supply destruction; that sec- tor's productive capability is diminished so that when the price begins to rise, the producers won't be able to increase supply to meet market demand. That's why you get spikes like we saw at the beginning of the last decade when uranium prices went from US $8 to US $130 per pound. I am not predicting that kind of price spike; I am just suspecting that the price of uranium ultimately will substantially outstrip the total production costs, which exceed US $60, including cost of capital on a global basis. RW: Instead of the overpowering nega- tive investor sentiment we have been experiencing in mining stocks, can good mining stocks now be judged on their fundamentals? RR: I think they have to be judged on their fundamentals. My suspicion is that in the next two or three years, at least for the precious metals miners, that manage- ment's memories of their mistakes they made in the last cycle will keep them from doing stupid things with investor funds. I think you will see less ill-conceived acqui- sitions and less marginal projects put into production. I hope that the increase we see in gold prices and margins and the decreases we see in the cost of capital will mean that for the next two or three years investors will be sheltered from stupid management decisions that punished them so severely in the last bull market cycle. I see a real virtuous cycle right now where rising commodity prices and margins are not wasted by dumb management decisions. RW: What would be a good current investing strategy for the average mining stock investor? RR: I don't know if there is an aver- age mining stock investor. I think that people must remember the fundamentals. If you believe that the gold price will go up, the first thing you do is to buy gold, not gold mining stocks. You can either buy the physical form or, if you want a IBK Capital Corp. This announcement appears as a matter of record only. $4,000,000 Units of Common Shares and Warrants The Undersigned Acted as Agent to Minera Alamos Inc. May 2016 Private Placement