 Resource Opportunities is a subscriber supported publication dedicated to providing objective commentary on the resource industry.
Lawrence is a geologist, with engineering and business training, and more than 20 years of hands-on experience in the resource industry. After completing his studies at the University of British Columbia in 1975, Mr. Roulston worked as an analyst for the major mining company Cominco Ltd. He also worked in a management role for several years with a mid-sized Calgary oil group. In 1984 he became the vice-president of a group of mineral exploration companies. He was also vice-president of an investment management firm focused on the resource industry. From 1994 to 1997, he was president and CEO of a mineral exploration company. Since then, he has been a resource industry consultant and independent mining analyst. He began writing Resource Opportunities in 1998.
Lawrence conducts frequent property visits as part of his due diligence and has toured mining and exploration projects in many parts of the world. He has also served as an expert witness in litigation regarding mining investments. Lawrence is frequently quoted and interviewed in the media, including national television. He has spoken at mining and investment conferences around the world.
Mr. Roulston's years of hands-on experience and extensive personal contacts in the industry provide unique insights that have generated an impressive track record for Resource Opportunities.
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Aurcana and accelerated warrants:
Question:
I am looking at an entry point for purchasing Aurcana. I noticed that today, the company issued an announcement that the company is accelerating the expiry of the warrants, which means that the warrants have to be exercised by June 23rd. I am not sophisticated in these matters, but my understanding is that when people start exercising their warrants (and presumably cashing out), the price of the stock starts falling. Is this correct? If so, then it would seem advisable to wait until after June 23rd in order to pick up some stock.
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A Wild Ride - May 5, 2008
The Realities of the Metals Markets - Lawrence Roulston
While investors fret over the state of the U.S. economy, metals keep climbing
Copper and tin both reached all-time record highs this week. A major mining company is buying yet another junior company to get its hands on a development project. The largest mining company in the world is reviving its plans to buy the third largest metals company. A major Swiss financial firm forecast that copper could rise by 50% from the current record high level.
There is a growing mountain of evidence that metals are in a long term bull market, driven by economic strength in the developing world. Yet, investors remain blinded by the situation in the U.S., fearful that the slowdown there will impact the rest of the world.
In reality, in spite of the sluggish U.S. economy, copper demand is forecast to continue to grow by 4% a year for at least the next decade. That implies that the mining industry will need to build mines capable of delivering an additional 1.4 billion pounds of copper a year. That is equivalent to four big new mines each and every year. Plus... another four big mines are required every year to replace mines that are being depleted. It will be a monumental task for the industry to pull off that level of expansion. Hence, the forecast for a 50% bump in the copper price. That forecast may be overly bullish, but it certainly shows that at least one very well placed financial group sees the realities in the metals markets.
I use copper as an example, but the same situation applies to the other metals. Demand is increasing at a rate faster than the mining industry can increase production. At some time in the not too distant future, it will become evident to investors that metal prices will remain at high levels for many years. The big question is when that thinking will become reality.
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