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Vancouver Cambridge Conference: No “Bull,” Just Reality

COMMENTARY—ProspectingJournal.com—Another year, another Cambridge conference. Like the year before it, the 2012 Vancouver Resource Investment Conference presented investors, industry professionals and even job-searchers the opportunity to interact with key figures from the mining and investment community. Like last year, gold stole the show, though there was a strong showing from the mining sector as a whole. And like last year, presentations and workshops focused on educational methods and industry knowledge.

Yet unlike last year, there seemed to be more unemployed scurrying from booth to booth, business cards in hand, searching for the elusive jobs that have continued to drop from a sector facing the fiscal squeeze. Unlike last year, the audience no longer emptied when debates on the truth of money and the failure of crony capitalism emerged. And even more than last year, there was a growing acknowledgement that investment and the protection of wealth were now things that everyone should know.

Sunday kicked off with a sobering reminder: the West is dependent on the maker of all things plastic and consumable—China. Keynote speaker Gordon G. Chang of Forbes.com titled his presentation, fittingly, “Can Beijing Rescue The Chinese Economy?” Moments into this talk, it was clear that Beijing having to save itself was actually Beijing having to save everyone as China is now the lifeline for the European and North American economies. From buying Greek assets to financing the proposed Northern Gateway pipeline and holding way too much US government debt, China is king.

Almost. Sunday saw presentations that varied from doom to stubborn optimism, with a little practical knowledge thrown into the mix. A panel on critical metals and rare earths brought heavyweights such as Mickey Fulp into the spotlight to discuss these important commodities, many of which escape the grasp of the average investor’s knowledge. Jon Nadler from Kitco Inc. gave a sobering account of “Gold Facts And Figures,” though I wouldn’t expect anything less from a company that relies heavily on the gold market. A workshop on investing in Australia, that little nation that could (sell all its dirt to China), highlighted important steps investors can take to ride the resources boom Down Under; whereas Adrian Day from Adrian Day Asset Management begged the question “The Resource Boom: Is it Over?” But the crowd-favourite, by far, was the keynote from the rebel investor Jeff Berwick, the infamous Dollar Vigilante. “The End of the World as We Know It” was a tour-de-force of basically how screwed we are: from the history of fiat money to the need to get additional passports and be prepared for economic Armageddon. Interestingly, this time there were a lot of people listening and the ones who were laughing were laughing out of fear, looking to their neighbours for confirmation that Jeff was the crazy one . . . right?

Yet in typical Berwick style, optimism shone forth in his presentation as he claimed that, after all, the current economic situation should end. And thus Monday came and the world went on, booths were still there and the fiat system regained its wobbly stance for who knows how long.

Monday’s tone continued with Sunday’s vibe, as speakers discussed gold, silver, macroeconomics and how to “Trade in Dangerous Markets.” A debate between the legendary Frank Holmes and Gordon Chang took place, with Chang arguing that China is headed for the dreaded “hard landing,” citing the growing awareness of ghost cities, an infrastructure bubble and the demographic crisis that will see a large majority of the population go unreplaced as the one-child policy leaves the nation in a future rut. Holmes, on the other hand, insisted that China was going to keep growing through these turbulent years as the US debt and money supply is fueling a downturn that is going to push the BRICs into the driver’s seat and instill a growing reliance on Asia. There was a lot of hype surrounding the price forecast for gold and silver in 2012, though calls for silver’s upward swing were met with shaky confidence as many are still reeling from the white metal’s massive plunge in late 2011.

Companies present ranged from unknown pump-and-dumps to well-positioned juniors and well-established giants, who all benefited from the hype of conference heavyweights such as Casey Research and Stockhouse. I remember Peter Grandich saying it best, however, when he noted how 90% of the companies present were losers and that the secret was to identify the 10% (if that) who offered value in the years ahead. Of course, listening to anyone’s “favourite picks” thus required a massive grain of salt comparable to a salt block. So, without any bias, I attempted to understand who just may be worth it . . .

Companies of merit included, in no particular order, the following: Oracle Mining Corp. [OMN – TSX], whose construction of its copper mine in Arizona is well-underway and set for production; Rio Verde Minerals [RVD – TSX], an emerging potash player in Brazil whose purchase of key properties and future production guarantees an expanding business feeding the Brazilian population; Yellowhead Mining Inc. [YMI – TSXV], a BC copper-gold-silver miner whose Harper Creek Project has a recent PEA report showing that the mine, coming shortly, will last 22 years milling at a rate of 70,000 tonnes per-day (and the stock is under $1); Northern Graphite Corp. [NGC – TSXV], an exciting miner that will shortly begin construction of what may become the largest graphite mine in the world; and Donner Metals Ltd. [DON – TSXV], an intriguing development and exploration company with a flagship partnership with Xstrata Canada Corp., set to produce zinc, copper, silver and gold in Quebec from 2013. When it comes to explorers, those daring companies with no mines and just dreams, well, I will save my analysis and picks for future articles so stay tuned.

Overall, the conference delivered its yearly promise of educating, informing and sensationalizing. The expected range of mining companies was present, along with industry representatives who provided everything from marketing to the expected doom porn. Speaking of doom porn, gold was the big play, with high-level speakers bombarding the audience with facts of the end of the world, which is admittedly becoming more acceptable considering the recent news out of the EU and the grey clouds hanging over North America. The macroeconomic issues affecting the markets, which admittedly haven’t been stellar this last year, steered toward the BRICs and in particular China. But in the end, investors got what they came for and left with renewed determination to make money in these turbulent times.
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Chris Devauld
ProspectingJournal.com

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