Resource World Magazine

D E C E M B E R / J A N U A R Y 2 0 1 7 www.resourceworld.com 5 e d i t o r ' s c o m m e n t s Ellsworth Dickson Ellsworth Dickson, Editor-in-Chief email: editor@resourceworld.com t: 604 484 3800 | 1 877 484 3800 H ere in Canada, it was blanket news coverage of the US election and Donald Trump's victory. Since approx- imately 72% of Canada's trade is with the US and employs some 2.5 million workers, people in the Canadian mining industry are interested in what the Trump administration will mean for this important sector. After all, there are 230 listed mining companies on the TSX and almost a thousand on the TSX Venture Exchange, accounting for over half of the world's mining-related financings. This question was addressed at the recent Metals Investment Forum in Vancouver where resource market gurus offered their views. In his presentation, California-based, John Kaiser, (kaiserresearch.com), one of the best resource stock analysts out there, said, "If Trump doesn't screw up, he could be good for the resource sector." His big infrastructure plans will need a great deal of copper, iron ore and other commodities; plus he is pro-oil pipeline. With the recent drop in the price of gold and gold stocks, now is the time to "kick the tires," said Kaiser. He noted a number of fundamentals that could be bullish for gold, including various flash points around the world like North Korea, the Middle East, and even Brexit. He also mentioned that China's environmental awakening has and will further result in a decline in cheaply produced products from small, environ- mentally-damaging mining operations as the government shuts them down. For example, 40% of the world's zinc supply comes from small polluting mines in China. As events unfold, Kaiser sees us heading into a long-term zinc bull market. Kaiser also noted that Chilean copper mines are getting long in the tooth and the Philippines have been shutting down some nickel operations. Meanwhile, the supply of cobalt is insecure as 50% comes from the Democratic Republic of Congo. Other supply disruptions that could bode well for more environmentally responsible mining operations are in the uranium, rare earths and tungsten sectors. For gold, Kaiser sees that fundamen- tals are in place for gold prices to rise to US $1,500/oz or higher in the next three or four years. "The resource sector could go ballistic!" In all the years that I have known John Kaiser, I have never heard him say anything like that. In his talk at the Metals Investor Forum, Joe Mazumdar, an Economic Geologist/ Analyst at Exploration Insights, remarked that some junior explorers are benefitting due to senior miners acquiring their proj- ects, forming joint ventures or acquiring the companies themselves. This is because with seniors gutting their grass roots explo- ration programs, they need to find high quality projects somewhere – and they are hard to find. Marginal projects are out but "brownfield" projects can be attractive. This situation is resulting in a growing interest in high quality juniors – espe- cially at a time of gradually declining gold production and not many big discoveries. Mazumdar said seniors like district-scale land packages which could develop into large operations. On the money side of things, Jordan Roy-Byrne, editor and publisher of TheDailyGold, said in his presentation that the spreading of negative interest rates is bullish for gold, not to mention the US $20 trillion American debt. He thinks the four-year bear market in resource stocks is ending and he can see the mining stock rally, which has been hesitating, resuming its upward trajectory. n Commodity prices improving; junior miners optimistic

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