Copper Bubble or Bull? Pt. I

Source: MetalMiner, Stuart Burns (11/11/10)

"Is copper on a sustainable bull run?"

Copper is in supply deficit and demand is coming back not just from the emerging markets but gradually from developed markets, as well. The consensus is that demand is outstripping supply due in part to the amount of time it took miners to bring capacity back onstream after the 2008–2009 crisis.

To what extent is this correct? If so, is copper on a sustainable bull run? Pointing to operational problems mines face, falling ore grades, labor unrest and the cutbacks initiated in 2009, the International Copper Study Group (ICSG) said production will likely be limited to 16.2 Mt. in 2010. Looking to 2011, increased economic activity is expected to boost end-user demand for the metal much faster than production, pushing the global market deeper into deficit of about 400,000 tons. New mine projects in 2011 are few and far between; most additional capacity will come from enhancements to existing operations. But with potential shortfalls looming elsewhere, such additional production may do nothing more than plugging the gaps left elsewhere.

While no timetable for ETF Securities' copper- and base metal-backed basket ETFs has been set, it is widely acknowledged that, at least for copper, a physically backed fund would suck metal out of the physical market increasing shortages. Thus, it'll likely be a popular self-fulfilling investment. The resulting shortages would push prices higher, rewarding the investor.

Chinese buying of primary cathode has been more muted of late. The recent high prices are possibly putting buyers off in the short term, but the gradually appreciating RMB is closing the SHFE-LME arbitrage window, a fine calculation at the best of times, making primary metal imports more likely if Chinese buyers get panicked by a continually strengthening LME.

Announcing Streetwise Live! Events
Source: Streetwise Reports (07/13/2020)

Streetwise Reports is offering 100 investors—at no charge—the opportunity to meet via Zoom with executives of precious metals companies as they discuss recent developments at their companies and upcoming catalysts.

"China's export quota could be opportunity for Canadian miners"

Latin America: Six Gold Juniors Amass 100M+ Ounces
Source: Marc Davis, BNW News (05/25/2010)

Latin America, the world's last great mineral frontier for prolific gold discoveries, is proving a godsend for some lucky investors.

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."

I haven’t spoken to my old mining stock friend, noted and universally respected gold stock guru, Bob Bishop, about Rare Element in a year, but I hear he is still a supporter and very large shareholder. I don’t believe he will hold it against me to remind you that this was one of his favorite holdings when he left the newsletter writing business. . .

It's Only the Beginning for Uranium
Source: www.financialinsights.com (06/03/2005)

Dr. Richard S. Appel, author of Financial Insights, first became bullish on uranium in mid-2003, when it appeared obvious that its supply versus demand equation was fated to seriously drive higher its price. Since then, a series of events in the uranium industry has led Appel to believe that uranium prices will reach never before seen levels.

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