VANCOUVER, Canada — Vancouver’s two January resources get-ups, Cambridge House for investors and B.C. Round Up for geos & technicians, gave us flogging five-day rains, one superb NHL hockey match … and plenty of hard-asset bravado:
- “I don’t own stocks any more; I own colored diamonds,” diamond seller Colin Ferguson told me at a private party I hosted with Cambridge House‘s Joe Martin. (I invite the guests and Joe entertains ’em.) Mr. Ferguson, a 51-year-old Vancouver Island resident, says we’ll see reports of diamond warehousing by aggressive hedge funds. Worldwide demand for diamonds is on track to exceed supply by 7 million carats. The “coloreds,” champagnes (cognac hues), pinks, blues and greens, are beginning to flash in fashion-minded markets. Colin will be at Mr. Martin’s Palm Springs investment conference at Indian Wells, California, in two weeks. I want to see more of these stones. (See: www. cambridgehouse.com)
- “Poly-metallic mines and properties are always in demand,” Tom Macneill says. I came across Mr. Macneill, a lifelong Saskatchewan resident and longtime chief of 49 North Resources (FNR in Canada), across the street from Waterfront at lunchtime. Tom, sitting at a lunch counter, is sitting on his merchant bank’s 10-percent-plus ownership of surging DNI Metals (DNI). DNI is a northern Canada smorgasbord of elements in an expansive property portfolio. I am fortunate to own FNR and DNI after a fishing trip a couple years back with Tom, Bob Bishop, Doug Casey and others, way up there in Saskatchewan. (By the way, Mr. Macneill is hot on uranium prospectors right now — especially one big one whose first letter is C and its last O.)
- I tested my latest think on the exhibit floor at the Joe show; copper-gold porphyrys will outpace market gains of all metals equities in coming weeks. “When Dr. Copper is in the house, it’s a very, very, very good house,” says Don Mosher. Don represents Riverstone Resources (RVS), a Burkina Faso prospector whose shares look ready to bust out after a largely ignored resource report. A geologist I rely on for analysis, Dr. Peter Megaw of Minaurum (Gold (MGG), Candente Gold and others, told me, “Copper is a big-company business. A billion tonnes of half-percent copper with the gold credit blended in, that takes care of a lot of the risk of taking on a development.”
More on this: Copper’s market price is rising steadily: this week alone it’s flirting with a four-month high. I chatted with Frank Holmes, the Texas asset manager, at Italian restaurant Cioppino in Vancouver’s Yaletown section. U.S. Global Investors’ Mr. Holmes says copper is the most fluent of industrial metals. It flows with currency and paper flows. “The price is correlating very closely with the rise in money supply since October,” he says.
Copper-gold porphyrys (or vice-versa) are among the metals market’s leading equity gainers in the past three months: Ross Beaty’s Lumina, Wayne Hewgill’s Regulus (REG) in Argentina and just this past week, Calibre Mining (CXB), have experienced higher stock prices, all triggered by indications of large-scale copper (and gold) deposits in the central and south Americas. I’ve owned Calibre for more than two years, and all of a sudden I am in the copper by 400 percent in the space of two days. I’ll stick with the Nicaragua prospector and B2Gold partner for another long spell, I figure. Douglas Forster and his mini-merchant bank are barely promotional, but enough in my book to rise above the fray with this one.
Calibre’s Greg Smith was stoked when he saw five or six trench-sample results in November. “We weren’t sure how to interpret the copper, which was in the 1,000 parts-per-million range. But we knew it was distributed very widely in every sample, right on the surface,” says Greg, who grew up in Nova Scotia. The exploration chief and his team tell me if drill results like the ones from a week ago continue to show mid-grade copper across vast swaths of land at Primavera, Calibre’s partners will start calculating projected mine life by the decades instead of the years. We’ll see.
In the world of tiny, there is Dr. John Clarke, a geologist I know from years ago during his days with Nevsun Resources in Eritrea. Dr. John was manning the PMI Gold (PMV) booth. He’s a director of the Ghana operator of Obotan, which I saw last summer and fell in love with. Dr. Clarke says he has an interest in a tiny Turkey copper & gold prospector, Mediterranean Resources (MNR). Turkey has only a handful of metals prospectors that trade publicly.
I am confident we’ll see a few more copper-goldies pop off the shelf in coming weeks. One of them is in our Torrey Hills Capital portfolio of clients, EurOmax Resources (EOX). Its Ilovitza copper-gold property is in Macedonia. On the poly-metallics, another Torrey Hills client, Revett Minerals (RVM), has several metals in production at its Troy Mine. I’ve owned Revett mostly as a silver-zinc-copper stock since visiting Troy a couple of years ago.
Not long ago, I saw Boxxer Gold‘s (BXX) Boss copper property near Las Vegas in Nevada. Elmer Stewart showed me around the skarn-hosted plains. I saw plenty of visible and oxidized copper, which is no “sure” indicator of economic value when drills start piercing the limestone and marble beneath the desert floor. I mention Boxxer here because it is probably the cheapest thing out there in my world of possible copper-gold poprhyrys. If coming assays prove to host mediocre copper grades across lengthy meters, the 13-cent stock easily would quintuple in a short stretch of days. I don’t own it, but I might buy in.
My biggest personal bet on copper-gold is Bellhaven Copper & Gold (BHV). I own almost 2 million shares now, and the Colombia and Panama prospector is not a client of Torrey Hills. La Mina in Colombia has enormous copper-gold potential; the compliant resource is something like 1.6 million ounces gold equivalent. That part of Colombia is called the Middle Cauca Belt; in and around La Mina I have great respect for David Forest & Colin Andrews’ Sunward Resources (SWD), whose gold-copper project at Titiribi I have seen thrice now but do not own. Don’t know if you have seen the latest assays on Cerro Vetas. They appear to dispute the notion that Titiribi grades are just mediocre.
Dave Forest, the chief operating officer, shared a sparkling water with me at a Sunward cheese-and-wine party in the Pan Pacific. He’s just back from Myanmar. Mr. Forest, a geologist and a writer in his own right, calls the 3-plus gram-tonne gold across 38 meters “the most significant development with the project since we first started drilling. ” Lots of copper, too, as I recall from my visits. I think closely held SWD shares will boom well above the $2 level in very short order here.
As for silver, I am hopeful the run will continue. At Joe Martin’s show, I got a couple of questions about Revett Minerals as a levered silver equity, now that federal USA court appears to have cleared the way for its Rock Creek project in Montana. Revett is a client of ours, as is another metals company that has silver on its property, gold producer Scorpio Gold (SGN) in Nevada.
I saw Scorpio’s Peter Hawley at Metro, a cutesy hotel not far from the Convention Centre. This was minutes after seeing the Canucks edge the San Jose Sharks at the arena, tit for tat, goal for goal. Mr. Hawley thus far has accomplished most everything he said he would at Mineral Ridge near Silver Peak. The company is processing material from waste piles at the Drinkwater Pit and delivering gold. I’d have talked with Peter some more but in walked John-Mark Staude from Riverside Resources (RRI), and I had the GATA dinner to attend that evening, anyway. I had the risotto con funghi at Don Francesco’s place. (At Pino Posterari’s Cioppino I had one luscious veal chop; not my first choice as I try to go with macaroni and fish at great restaurants; but Pino and his head waiter convinced me.)
I know folks read the BabyBulls feed to catch up on their favorite Torrey Hill clients. At the two shows, I’d have to say the most investor interest that I was able to catalogue centered on Glenn Mullan and his team, who operate Golden Valley Mines (GZZ). Folks were buzzing the GZZ booth, now that they are starting to see Glenn’s Abitibi gold belt prospect generator as a cousin to giant Osisko Mining at Malartic. GZZ owns two-thirds of Abitibi Royalties (RZZ), which operates a 70-30 venture with OSK at Malartic, Canada’s largest gold mine. Glenn Mullan celebrated his birthday the other day, his 53rd I seem to remember; he’s been collecting NSRs (net smelter royalties) since he was 18 years old.
I could go on forever, but I’ll more or less end with Gold Standard Ventures (GV). Jonathan Adwe and Dave Mathewson run the Nevada gold and silver prospector. Yes, it’s a client of Torrey Hills, and yes, like several of the companies in this report, I have my money where my pen and sneakers are with share ownership. I happened across Carl Pescio, a longtime Nevada property owner and geologist who spawned Allied-Nevada and who owns a hunk of GV. Carl told me Gold Standard will surprise the market on the silver ingredient to its Railroad Project near Elko, where Mr. Pescio lives.
I’m always on the hunt for hidden silver. Maybe that’s why Gold Standard shares largely have held their value, and a bit more, in the ghastly 2011 metals market. If you’d like more on what I gleaned in Vancouver this time around, and don’t want to read another word, Mr. Martin had a full-fledged broadcast centre with professional broadcasters, just like my days at CBS MarketWatch. Here is my interview. In it, I also talk about my views on geopolitical risk … and the mistakes I have made in the past, including failing to disclose trades properly when I was writing a subscription newsletter 8 years ago.
Oh yes, Round-Up in Vancouver was outstanding. The new pavilion took me through 100 years of British Columbia metals exploration. I always cherish the “Abstract Volume,” which is probably online by now. John Lee’s Prophecy Platinum (NKL) and Bill Sherriff’s Golden Predator (GPD) in Yukon, among others, get into the nitty gritty of their respective projects in the hinterlands in the latest version .
– Thom Calandra
– Thom Calandra is an author whose work has appeared in newspapers, newsletters, magazines and across the Web. He is a founder of CBS MarketWatch, now Dow Jones MarketWatch. He is a member of Torrey Hills Capital. Clients provide stock options to Torrey Hills in return for investor outreach services. Thom is also an owner of HV, GV, GZZ, RZZ, RVM, CXB, PMV and SGN. His entire portfolio is at Stockhouse portfolios, a free service. All photos, even mediocre ones, by Thom Calandra. Your comments are welcome. See: babybulls.com