Al Korelin, Korelin Economics Report: Welcome to the Cambridge House World Investment Conference in Vancouver, BC, at the Convention Center West. My name is Al Korelin. I am fortunate in that I take a part in this show, and I have been taking a part in these shows every year for the past 15 or 20 years—excellent, excellent investment forums; excellent, excellent educational forums. What you're about to see is not Al Korelin's opinion of the show, but what other people are saying; and I think you'll agree you're going to want to attend next year.
Howard Fitch, Cambridge House:Oh, we're very pleased. This is our sixth year doing the conference in June. Getting a little close to summertime, but a great opportunity for investors to come out, hear what the gurus have to say, what the experts have to say about what's coming down the road as far as opportunities to invest in and profit from the resource sector. And there are a lot of companies here—over 200 exhibiting companies that have lots of projects going on through the summer, lots of development plans. Typically, the summer is a bit of a soft time in the market; so it's actually a good time to get in there, wade through a number of these quality juniors and pick them up July–August. Oftentimes, you'll see a rally in the fall when drill results come out; so it's an excellent time to be shopping for some of the juniors.
GENERAL OBSERVATIONS OF THE SHOW
Gary Freeman, Pediment Gold Corp.: Well, the conference has been a little slower than is typical; but the markets are difficult, as everybody's seen over the last little while. And, once again, this is an industry of hard-core people—people who really believe in the precious metals industry as a whole; so, like always, we see the people that matter here.
Lawrence Roulston, Resource Opportunities: I think the attendance is down; the buzz is down, because the markets in general are down. And when the markets are down, people are just not feeling as enthusiastic, which is really unfortunate because at a time like this—when the prices are down—it's absolutely the best time to get involved. And whether it's commodity companies or any other sector, the best time to be investing is when things are down.
David Coffin, Hard Rock Advisory: I think the show's been a good one. You have to look at any show in the context of the market and also the weather. The weather's been lousy in Vancouver for the last two months, but there's a very good attendance today. I think there's certainly a very good group of companies, and for a gold- and base metals-oriented conference, I think it's doing quite well.
HOT COMMODITIESHoward Fitch, Cambridge House: Well, we've been hearing that the rare earth element companies are out there. Lithium, vanadium, rhodium—"iums" seem to be somewhat in vogue as part of the clean energy, green technology spectrum (battery, electrical car power, etc). Gold's always a big one here at our conferences, especially with the gold price over $1,200/oz.
Marin Katusa, Casey Research: I think that people have to be careful about the buzz right now. If you walk down any of the halls, it's very lithium- and rare-earth oriented. You have to be very careful about these. They're rare earths, but they're very far from rare. A lot of these companies are trying to promote value in situ. There's a big difference between value in the ground and outside the ground, so be careful with that.
Roger Wiegand, Trader Tracks: Gold this morning was on another tear. It was up $17–$20 this morning. We think it will do a top at around $1,250. And silver, which had sold off considerably from $19.50 to around $17.25, it was back up 40 cents again this morning. So we can see the divergence among the metals and the shares. We can see that companies are going to do well and have great a future. There's no question about it.
Hugh Clarke, Endeavour Silver Corp.: Certain shows have a lot of buzz, whether it's rare earths, silver or the base metals; but I don't find that this time. Everybody seems to be fairly buoyant and optimistic about all the metals, with a little bit of a backdrop of concern over the broader markets. But a really hot item, like we saw with uranium perhaps a few years ago, I don't see at this conference.
Lawrence Roulston, Resource Opportunities: The reason for the attention on gold is because people are looking for a safe haven. They're looking for security; and for that reason, gold seems to be at the top of the heap at this moment. The gold price is up near record territory right now, so it comes back to the comments a moment ago that people are planning on gold at the top of the market, and they're ignoring other commodities when probably the greatest upside potential is in the other commodities being completely ignored by investors at this time.
Marina Trasolini, Resource Opportunities: I think right now everyone's excited about gold. Some people are excited about base metals—we're excited about base metals. And everyone's looking for a good, good company to buy.
David Coffin, Hard Rock Advisory: Gold, without question. The markets are in turmoil. We're in the middle of a very major shift from a western to an eastern focus in the markets. The West is indebted. People are unsure of paper currencies, so they're buying gold. There was an old maxim that you should own 5%–10% of your portfolio in gold. It went by the wayside. That is coming back very much into favor. During that process, gold should be a very good place to be.
Yale Simpson, Exeter Resource Corp.: In terms of hot commodities—as much as nothing's that hot right now—the hot commodities right now are more in the gold space. It's a difficult week to have a show because, if you look at the copper graph, copper broke through its support level today. And if you're a chartist, you'd say, "Oh, copper's going a lot—potentially a lot—lower." Now, I'm not an expert on copper. The gold graph says I'm going higher. Most base metal graphs say I'm going lower. It's always difficult around here to tell a base metals story. In Canada, unless it's nickel, at times it's great. But gold will continue because people know that for a gold story, and I'm a technical, so I'll say it. With a gold story, if you find 100,000 ounces of high grade, chances are you can mine it. In the base metals space, good luck. You can have 100,000 tons of the highest-grade copper you want. Then what? So, in a skeptical market, they'll always fall back on gold.
BEST INVESTMENT ADVICE
Lawrence Roulston, Resource Opportunities: What I like most right now are companies that have already made a discovery—what we call development-stage companies—where they're taking a deposit where they've already outlined it and they're advancing toward production. The upside potential there is enormous, and you're not taking on the discovery risk. So you get that balance of still having great upside potential without having the big risk of a company that hopes to make a discovery next week.
Marin Katusa, Casey Research: I think the correction going on in the U.S. geothermals right now—a company like Ram Power, which is well funded and has a management team with a proven track record—that's where I think the great value is. Magma Energy. But be careful with the companies that can't finance in a bad market and need to spend money. And this is going to be a tough market.
Marina Trasolini, Resource Opportunities: I like Millrock Resources Inc. (TSX.V:MRO). It's a prospect generator that has joint-venture partners spending money on a number of its projects. And their partners are major mining companies, so that's always a plus.
David Coffin, Hard Rock Advisory: East Asia Minerals Corp. (TSX.V:EAS), which is here, has been a big, big success for us already. They are, in our opinion, priced to their current results. They still have a lot of untested ground, so I would have to put them at the top of the list. They have the success; and the likelihood of being taken over by a senior producer, in our view, is very large. That would probably top the list today. Another one here is more of a future story—and perhaps a little more interesting in that sense—called Mirasol Resources Ltd. (TSX.V:MRZ). They're working on high-grade silver-gold veins in Argentina, have had a success and have been recognized for that success. They've put a second, very strong project on the table that they'll be drilling later this year. That's one that we're very much focused on right now, with the future accent towards the end of the year.
Yale Simpson, Exeter Resource Corp.: If people are looking at entering the space, always go with a company—well, I mean, Rick Rule and other people will tell you how to invest—but, apart from the management side, if a company has cash that means they had the credibility to get there. Cash first, then have a resource, a deposit; because you can always fall back on that. There's always value in having a deposit. And then you say, "What's your burn rate?. . .Are the rigs turning?. . .Give me that news flow." If they don't have any almost-guaranteed news flow, where you can expect to have a positive result, leave it alone. And that will separate—only 15% of the companies in this room will give you the answers to those questions. The rest of them may say, "Well, you know, we could do, we could be, that. We're trying to do this." But they don't.
Howard Fitch, Cambridge House: Well, we just want to encourage you to go to our Cambridge House website. Keep an eye on our upcoming events. We'll be in Toronto in September, Montreal in November and back here in Vancouver in January. Again, our conference is free to attend and we offer a wealth of information over the two days. People with any exposure to investing in the resource sector really owe it to themselves to come to conferences of this nature. It's one-stop shopping as far as education and opportunities go—and they definitely need to make the time to attend.
Al Korelin, Korelin Economics Report: Okay, there you have it. It's been a pleasure attending the Cambridge House World Investment Conference up here in Vancouver, BC. We'll be back next time.
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