Saturday, 15 December 2012

John Kaiser - Discovery Cycle Coming

Kaiser expounds on his thesis, detailed in recent links to his articles at this blog, that the trading culture on the TMX is killing the junior sector.

Kaiser emphasises that a resource discovery cycle is coming after a resource feasibility cycle.
Rick Rule has also suggested the shock  will be the discovery cycle to come.
It is the smallest juniors which will drive new discoveries.

BNN Interview HERE

The junior sector is about juniors with no cashflow and exploration companies with no defined resource and no hard numbers suggesting target valuations upon discovery

A trading culture is killing the TMX by sophisticated traders intercepting real outcome based investors, then selling and shorting the stocks, covering by the end of the day, never having to deliver the stock but covering their positions lower after inflows have slowed.

Suggests Aussie market not hooked up to algorithmic trading in the same way.

Canadian system of NI 43-101 etc is good.
Large high frequency traders are exaggerating the volatility and rigging the dice.

Retail investors fled after Bre-ex.

The last decade was about taking low grade failures from the past 50 years and re-working the "forgotten" deposits with higher metal prices. $100bn takeovers since 2005.
Sees an M&A wave taking out the more advanced companies.
Then a return to discovery focus


Nevada Exploration (NGE.v). Most of Nevada owned by Barrick and Newmont, Kaiser thinks less than half of Nevada's gold has been discovered. Much of what remains is deep under the gravels. NGE has proprietary hydro-chemistry techniques and  have a number of agreements with McEwen (MUX) including Grass Valley. If they hit Northern Nevada will be blanket staked. (there are a number of juniors already in the region near Barrick - see Regional Exploration - Nevada page on this blog. Expects McEwen to be a baby Barrick if they hit with NGE.

First Point Minerals FPX.TO - Pioneered different type of Nickel deposit. Simple separation, low energy requirement of new deposit type. Potential revolution for nickel mining. Iron, nickel combination

Lithic Resources LTH.v - Upside for Zinc in next couple of years. Major Zinc mines closing, few inline. Utah deposit

Quest Rare Earth QRM.TO - Past huge winner. Over $200bn of rare earths. Key thing heavy rare earths. Metallurgy key. Rare earths prices have fallen hard. Flood of light rare earths to come from

Kaminak Gold (KAM.v) - Bottom Fish $2 earlier this year. Bottomed $1. Have 3m oz inferred 1.5g/T open pit in Yukon. PEA to come.

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