Top Canadian Resource Strategist Warns Miners of Nasty Quarter Ahead

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The good news for miners and explorationists during the global economic crisis is that investor cash reserves are as high as they have ever been and will be looking to get reinvested, Frederick Sturm, executive vice president and chief investment strategist for MacKenzie investments, explained.

One of Canada's top investment strategists warned miners attending the Northwest Mining Association conference Thursday "that this quarter is going to be even nastier than people are thinking and the first quarter will be worse."

In an industry outlook speech to the NWMA conference in Reno, Frederick Sturm, executive vice president and chief investment strategist for MacKenzie Investments, noted that the mining industry has come down hard, will snap back, and then come down hard again. "Do the deals that you need to be done quickly," he urged mining companies.

The good news for miners and explorationists during the global economic crisis is that investor cash reserves are as high as they have ever been and will be looking to get reinvested, he explained.

Unfortunately, Sturm also warned, "The window for you to get capital is going to be very hard or the gate shut for quite some time."...

When the U.S. dollar starts to ease again next year, Sturm predicted the gold price will experience another run. Nevertheless, Ivy Global Natural Resources price forecasts revealed by Sturm Thursday are not especially encouraging for the near-term future of metals and minerals: Copper $1.60/lb; nickel $7.50/lb; moly $10/lb; gold $800/oz; uranium $60; silver $13/oz; platinum $1200/oz; iron ore fines $55; coking coal $150; and aluminum $1.10/lb.

Sturm forecasts that the long-term outlook for resources will remain solid. Fiscal policy efforts to stabilize financial system will succeed in averting depression conditions. He is particularly enthusiastic that the world's central banks "are all sailing in the same direction."

The mining industry must forget about recent highs in resource prices, Sturm advised, because "they will not be seen for years." Nevertheless, he added, "gold may be the exception."

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