Be Patient, Metals Will See A Comeback: Key Takeaways From The Noosa Mining Conference
(Kitco News) - If you think that weak gold prices have stalled miningactivity and lowered appetites for precious metals all around the world, thinkagain.
Kitco News’ own Daniela Cambone has just returned from theNoosa Mining & Exploration Investment Conference, the pre-eminent gatheringof mining professionals in Australia, where she interviewed mining executives,as well as veteran analysts in the metals space.
With gold trading range-bound and struggling to break pastthe key $1,300 an ounce resistance level, it was a surprise to see such strong,positive sentiment from a packed conference.
While North American investors have been lukewarm towardsthe precious metals, with some having jumped to cryptos and marijuana stocks,their counterparts down under have taken a positive, longer term outlook. Asone guest explained, time horizon changes your perspective when investing inmetals.
With fears of a trade war inching closer to reality andgeopolitical tensions flaring up in the Middle East on the back of a potentialwar with Iran, one thing is clear - Australian miners are ready for globaluncertainty to drive up gold prices.
Here is a selection of the video interviews with theexperts:
Morgans: Trade Wars Are Serious
In case you had any doubt, trade wars are no joke and willhave real implications on the global economy, says Brian Sheahan, ExecutiveChairman of Morgans, an Australian brokerage firm.
“I think the observation so far is that there’s a lot oftalk, a lot of posturing, probably a lot less action, so it’s been good.Obviously, as any sensible person would say, a trade war would not be good forthe global economy,” Sheahan said.
Sheahan said that although a recession is not yet in sight,investors should be wary of several indicators, especially once the yield curvegets down to about a 0.5 difference.
Highlands Pacific: Electric Vehicles Are The Catalyst ForThe Next Base Metals BoomElectric vehicles provide more than just the next generationof transport; the industry will spawn a rush of demand into base metals likecopper and cobalt, according to Craig Lennon, managing director of HighlandsPacific (ASX: HIG).
Lennon said that demand forcobalt “is definitely around electric vehicles and the growth that’s going tobring on.”
Panoramic Resources: Long-Term, Metals Will Rally
Peter Harold, director of Panoramic Resources, shares thesame sentiment as many of the investors in Australia; he is long-term bullishon metals and is ignoring the short-term noise caused by global protectionistpolicies.
“The outlook is very good. Yes, the trade wars is going tocreate some noise, but fundamentally, longer-term, we just think we’re in theright spot,” he said.
Like Lennon, Harold believes that electric vehicles are themajor driver, pun unintended, of a base metals rally in coming years.
Brookside Energy: Move Over, Saudi Arabia
The U.S., not Saudi Arabia or Russia, will be the leader inenergy production, thanks to a combination of technological advancements andgood luck, said David Prentice, managing director of Brookside Energy.
“Fundamentally, it’s a story about technology andtechnological improvements in drilling techniques,” he said.
The other side of the story is that the U.S. harborsgeological advantages in holding oil and gas reserves. With the advent offracking and shale extraction, this advantage has been compounded in recentyears.
Gold Road Resources: These Traits Make A MinerInvestment-Worthy
Duncan Hughes of Gold Road Resources said that investorsshould buy miners with low all-in sustaining costs, minerals that are simple tomine and process, and that operates in a safe jurisdiction like North Americaor Australia.
“As an investor, I’d like to look for upside as well, so I’dlike to see exploration upside there too,” he added.
Central Petroleum: Buy This Commodity If A Recession IsComing
During hard times, consumers’ wallets will feel lighter, butwe will still need energy. That’s why, according to Richard Cottee, CEO andmanaging director of Central Petroleum, investors would be wise to get in onnatural gas if they want to recession-proof their portfolio.
“The one thing that’s interesting about recessions, is thatit doesn’t actually change your energy consumption,” Cottee said.
Genex Power: Turning A GoldMine Into Renewable Energy
What do you do with a depletedgold mine? Turn it into a renewable energy plant, of course.
What makes Genex unique is that itis the first plant in Australia to utilize a hybrid of solar and hydro power tooffset peak loading, storing electricity during non-peak hours.
The site operates on the KidstonGold Mine, which was once the largest gold mine in Australia, and was formerlyoperated by Barrick Gold.
“When the mine closed, we went toBarrick and bought it from them,” said Simon Kidston, executive director ofGenex Power.
Kidston noted that Australia wouldbenefit from more renewable energy generation, but renewables cannot providestable, consistent energy supply like fossil fuels can, which is why a hybrid,co-generation approach with energy storage capabilities may be the answer.
DGR Global: Copper IsOn The Verge Of A Breakout
Besides copper being a long-term winner due to the electriccar boom, technical indicators point to a short-term rally too, according toNick Mather, CEO and managing director of DGR Global.
“If you look at the price graph, and if you look at wherecopper demand is going, it’s going to break out,” Mather said.
Labor problems in Chile, resource grades coming down, andincreasing mining costs all contribute to Mather’s bullish sentiment on copper.
The Unsung Hero Metals: Bauxite and Tin
Nobody talks about bauxite, but this metal is crucial in theprocess of making aluminum, and is expected to see stronger demand out ofChina, said Simon Finnis, CEO and managing director of Metro Mining.
“China has now developed a refining and smelting businesswithout any bauxite, suddenly bauxite becomes a commodity,” Finnis said.
Finnis’s company, Metro Mining, is one of the world’s fewpure-bauxite producing miners.
Similar to bauxite, tin has been living in the other basemetals’ shadow.
Russell Clark, CEO of Kasbah Resources, calls tin the“forgotten EV” metal that is just as vital as the other base metals in theelectric vehicle story.
“People talk about cars and windmills and all those things,but they all need to be joined, and that’s why the copper story is so strong,but you need tin to join it all together in the form of solder,” Clark said.
By David LinFor Kitco News
Follow @davidlinMTL
dlin@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.