Issue link: http://resourceworld.uberflip.com/i/937377
22 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 8 1.888.994.4465 | monarquesgold.com To become the leading explorer and developer of GOLD properties in the Val-d'Or/Abitibi Camp. Measured and Indicated Resource of 2.6 Million Ounces of Gold on Wasamac. RW: Is it better for a mining stock investor to have a long-term outlook or be a short-trader – or both? EC: Both. I've got a lot of development- stage stocks on the list and by that I mean companies that already have a defined resource that I think they're going to grow. With those stocks you tend to have a slightly longer outlook because it takes time to work through the development phases. I'm generally only interested in com- panies where I look at their resources and I can see that at current prices there is a good margin. I'm not really an optionality guy. I would rather be betting on things where they make it at current prices. However, I also have a great fondness for early stage exploration plays. Those are also ones where you need to have a long term outlook. You've got to be able to look at it and say, "This could potentially be something big." At the same time, you need to be realistic about odds when you're trading exploration stocks. The odds are that it's not going to work the majority of the time. That's just how it is; so you've got to be smart about it. The short term trader tries to get in before the market recognizes the potential of a project or a company. If the market gives you a 100, 200 or 300% gain before there's any information that actually changes the odds – like before there's any drill results or something like that – you get your money back and more. That's how you have to play this stuff. Even if you take a long term view, you've got to be a short-term trader in the sense that you pay attention to risk and money management and use large price swings to your advantage. You've got to trade that way. RW: Can you give us a brief definition of the term optionality? EC: With optionality you are not bet- ting on the resource stock so much as you are betting on the underlying commodity. For example, if a company has a large but slightly uneconomic resource in, say, gold, a rise in the price of gold can generate a great price increase in the stock. Speaking for myself, I prefer resource stocks that make sense today at current prices. RW: Can you give us your view on gold? EC: As I mentioned earlier, I'm not a gold bug; however, I think gold is going to have a good year. Looking back, you could see the gold price increase late in the economic cycle which where we are now and inflation is starting to pick up. We are now starting to see the Consumer Price Index going up. Technical analysts are saying that US $1,360/oz is a big number. That's where it stalled out in the fall. If it gets through that, the chartists say it will go to US $1,450/oz fairly quickly. It's possible that we could see other commodities going up as well. There are, for example, supply constraints with zinc. One good strike could drive the price of copper higher. In fact, all the metals could move up in the next 18 months. n