Navigating the Lull in the Commodities Bull Market … · 2008. 11. 23. · Asset Backed Commercial...

Hard Assets Las Vegas September 2008Hard Assets Las Vegas September 2008Las Vegas, USA

September 9, 2008

Presented by John Kaiser

Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Navigating the Lull in the Commodities Bull MarketBull MarketBull MarketBull MarketBull MarketBull MarketBull MarketBull Market

www.KaiserBottomFish.comwww.KaiserBottomFish.comwww.KaiserBottomFish.comwww.KaiserBottomFish.com

Financial Services BubbleFinancial Services BubbleFinancial Services BubbleFinancial Services BubbleFinancial Services BubbleFinancial Services BubbleFinancial Services BubbleFinancial Services Bubble

(adjusted for splits and rollbacks)

IMF estimates losses from nonIMF estimates losses from non--government debt will reach $1 trillion!government debt will reach $1 trillion!

Bear Stearns

CountrywideCitigroup

Merrill Lynch

The Wall of WorryThe Wall of Worry! Securitized Mortgage Paper! Subprime Defaults! Asset Backed Commercial Paper! Liquidity Crunch! Foreclosure! Real Estate Collapse! Reverse Wealth Effect! Bankruptcy! Globalization! OECD Deindustrialization! Energy Costs & Peak Oil! Derivative Pyramid Collapse ! Collapsing US Dollar ! Stock Market Collapse! Minneapolis Bridge Collapse

! McCain/Pallin White House! Iraqi Quagmire! Pakistan and Iran! Osama bin Laden! Implosion of China! Resurgence of Russia! Creationism! Pandemic! Global Warming! Food Price Inflation! Satellite Orbit Demolition! Aging Boomer Bubble! Health Cost Inflation! Depression! Asteroid Collision

Did I miss anything else that could go wrong?Did I miss anything else that could go wrong?

Fannie Mae

The China PriceThe China Price! Cheap Labor – urbanization of rural China and the

dismantlement of state run enterprises

! No Health & Safety for Workers

! No environmental emission controls

! No Unions to secure medical or pension benefits

! US Dollar Peg: the devil’s bargain of maintaining an undervalued yuan by bankrolling the US trade deficit through the accumulation of US treasury debt

! Piracy and Counterfeiting

! FDI: foreign direct investment and technology transfer

Made in China and Packed with Pride in America

ApocalypseApocalypseNow?Now?

! Beware the fragmentation of commodity supply channels as strategic value backed by sovereign wealth becomes an important part of acquisition and production decisions.

! Beware China’s ability to simultaneously bankroll infrastructure in a third world country and secure mine development rights.

! Beware the destruction of the American eyes in the sky and the enfeeblement of US military technology.

! Beware a future where the US dollar no longer serves as the benchmark for discovering the price of everything, a future where it becomes impossible to monetarily cost project economics.

New New GeoPolitical RealitiesGeoPolitical Realities for the 21for the 21stst CenturyCentury

! Higher Capital Costs! Higher Energy Costs! Personnel Shortages! Water & Power

Shortages! Labor Disruptions! Grade Flexing Errors! Permitting Delays! NGO Opposition! Government Revenue

Grab! Commodity Price

Uncertainty

Why do we think these costs will never go down but metal prices will?

Commodity Bubble?Commodity Bubble?(adjusted for splits and rollbacks)

Rio TintoBHP Billiton

Is the War on Commodity Prices Is the War on Commodity Prices Wall StreetWall Street’’s preparation for a s preparation for a commodity mania to come? commodity mania to come?

Green Economy & Infrastructure Renewal BoomGreen Economy & Infrastructure Renewal Boom

Watch the November Elections!

ASCE estimates $1.6 trillion needed over next 5 years just for

infrastructure maintenance!

! Watch footprint consciousness driven by climate change and the environmental impact of the Rise of Asia change the way people consume, helped along by the end of consumer debt.

! Watch for a capital spending boom based on “transformative infrastructure renewal” in the US that keeps Americans busy while China transitions to a self-sustaining economy

! Watch the growing Silicon Valley venture capital boom in green technology

! Watch for manufacturing to return to the OECD in a highly automated form

! Watch raw material and energy prices never go back to the bear market levels of 5 years ago

! Watch for a US foreign policy that reflects the end of American hegemony

The bull market since 2003 has been driven by specialized The bull market since 2003 has been driven by specialized institutions and sophisticated investors. institutions and sophisticated investors.

Wall Street and the retail mainstream missed the boat!Wall Street and the retail mainstream missed the boat!

! $30 billion raised through TSXV private placements at $0.54 per share average since Jan 2003

! 55 billion new shares created through TSXV private placements

! 156 billion shares have traded on TSXV at an average $0.79 for a total value of $123 billion since Jan 2003

! Companies have experienced management teams, are cashed up, and have projects with ounces or pounds in the ground that in many cases are robust if you plug in today’s metal prices

! No scandals have betrayed the public trust as Bre-X did in 1997

! We have a bona fide world class Cinderella story in the form of Aurelian and its 14 million oz gold discovery

And yet the juniors are trading as if a repeat of And yet the juniors are trading as if a repeat of 19971997--2002 or worse lies ahead!2002 or worse lies ahead!

Primary Nickel Companies - Top 20(Red - Companies taken over or merged, Orange - takeover pending)

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

$7,000,000,000

$8,000,000,000Li

onO

reD

ynat

ecC

anic

oM

irabe

laN

oron

tSc

andi

navi

anW

eda

Bay

Star

field

Geo

vic

Cdn

Gob

imin

Cro

wfli

ght

Asi

anVi

ctor

yB

rillia

ntIn

tl N

icke

lLi

bert

yM

indo

roFi

rst N

icke

lH

ard

Cre

ek

Mar

ket C

apita

lizat

ion

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

9,000,000,000

Net l

bs C

oppe

r

Market Capitalization Net lbs Nickel

Copyright 2008 Canspec Research LLC September 4, 2008

Primary Nickel Companies - Top 20 by Pounds(Red - Companies taken over or merged, Orange - takeover pending)

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,0005,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000

9,000,000,000W

eda

Bay

Can

ico

Har

d C

reek

Vict

ory

Nic

kel

Lion

Ore

Scan

dina

vian

Min

eral

s

Mira

bela

Kol

a

Dyn

atec

Star

field

Intl

Nic

kel V

entu

res

Gob

imin

Geo

vic

Cdn

Roy

altie

s

Inde

pend

ent N

icke

lN

orth

ern

Plat

inum

Cor

onat

ion

Nor

ont

Mus

tang

Cro

wfli

ght

Net l

bs N

icke

l

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$/lb

Ni

Net lbs Nickel Mkt Cap per lb Nickel


Primary Copper Companies - Top 20(Red - Companies taken over or merged, Orange - takeover pending)

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000Iv

anho

eFi

rst Q

uant

umIn

met

Nor

ther

n O

rion

Tenk

eN

ew G

old

Lund

in M

inin

gQ

uadr

aK

atan

gaPe

ru C

oppe

rN

ovag

old

Met

allic

aA

ura

Min

eral

sA

ugus

taG

loba

l Cop

per

Nor

ther

n Pe

ruPe

taqu

illa

Cop

per

Anv

ilTa

seko

Nor

thga

te

Mar

ket C

apita

lizat

ion

0

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

Net l

bs C

oppe

r

Market Capitalization Net lbs Copper


Primary Copper Companies - Top 20 by Pounds(Red - Companies taken over or merged, Orange - takeover pending)

0

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000Iv

anho

eC

orrie

nte

Peru

Cop

per

Qua

dra

Nor

ther

n O

rion

TEA

LLu

ndin

Min

ing

Firs

t Qua

ntum

Kat

anga

Tase

koG

loba

l Cop

per

Nor

ther

n Pe

ruIn

met

Can

dent

eN

ovag

old

Impe

rial M

etal

sA

ugus

taM

etal

lica

Reg

alito

Tenk

e

Net l

bs C

oppe

r

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$/lb

Cu

Net lbs Copper Mkt Cap per lb

Copyright 2008 Canspec Research LLC

September 5, 2008

Primary Copper Companies - Top 21-40 by Pounds(Red - Companies taken over or merged, Orange - takeover pending)

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

6,000,000,000

7,000,000,000

8,000,000,000Ty

ler

Min

era

And

esM

aren

goLo

s A

ndes

Cha

riot

Baj

a

Nor

sem

ont

Sura

min

aC

oro

Anv

ilN

ew G

old

Far W

est

Entr

ee G

old

Aba

cus

Ant

ares

Inca

Pac

ific

Cop

per M

tnPe

taqu

illa

Cop

per

Nor

thga

te

Man

tra

Net l

bs C

oppe

r

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$/lb

Cu




0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000Pa

cific

Boo

ker

IMA

Bel

lhav

en

Afr

ican

Cop

per

Aur

a M

iner

als

Red

haw

k

Cap

ston

eIn

tl En

exco

Min

es M

gmt

Con

stel

latio

n

bcM

etal

sSh

erw

ood

Selk

irkC

ente

nario

Stin

gray

Expl

orat

orC

ontin

enta

l Mnr

ls

Shef

field

Car

path

ian

Gol

dmin

co

Net

lbs

Cop

per

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$/lb

Cu




0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

1,000,000,000G

lobe

star

ICS

Cop

per

And

over

Ast

ron

Cad

an

Sunr

idge

Get

ty C

oppe

r

Apo

quin

doIn

tl B

aryt

ex

Nor

dR

ambl

er

Phile

xEu

rom

ax

Ace

ro-M

artin

Min

to

Skee

naTi

ger

New

strik

eC

oppe

r Can

yon

Bel

l Cop

per

Net

lbs

Cop

per

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$/lb

Cu


Copyright 2008 Canspec Research LLC

September 5, 2008

Primary Zinc Companies - Top 20 by Pounds(Red - Companies taken over or merged, Orange - takeover pending)

0

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

35,000,000,000

40,000,000,000

45,000,000,000Se

lwyn

Euro

zinc

Wes

tern

Silv

er

Bre

akw

ater

Wol

fden

Zazu

Man

tleSt

rate

gic

Res

ourc

eLi

thic

Zinc

ore

Lydi

anA

lmad

enM

anic

ouag

anSl

amM

etco

Vena

Net l

bs Z

inc

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$/lb

Zn

Net lbs Zinc Mkt Cap per lb Zinc


Primary Molybdenum Companies - Top 20 by Pounds(Red - Companies taken over or merged, Orange - takeover pending)

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000G

ener

al M

oly

Mos

quito

Thom

pson

Cre

ek

Mol

y M

ines

Erde

neM

erca

tor

Tena

jon

TTM

Bol

ero

Tint

ina

B2G

old

Virg

in M

etal

s

Ada

nac

Intl

PBX

Cre

ston

Mol

yTo

rch

Riv

erC

olum

bia

Yuko

n

Meg

a M

oly

Roc

a

Nan

ika

Net l

bs M

olyb

denu

m

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$/lb

Mo

Net lbs Molybdenum Mkt Cap per lb Mo


! No fuel transportation cost

! No carbon emissions

! Secure electricity supply

! Long term contracts being written at $95/lb

Nuclear Energy & UraniumNuclear Energy & Uranium

Primary Gold Companies - Top 20 by Market Cap(Red - Companies taken over or merged, Orange - takeover pending)

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000El

dora

doIA

MG

OLD

Mira

mar

Gam

mon

Lak

eD

eser

t Sun

Red

Bac

kC

ente

rra

Vice

roy

Aur

elia

nA

rizon

a St

arC

umbe

rland

Euro

pean

Gol

dfie

lds

Ala

mos

Det

our G

old

Seab

ridge

Osi

sko

Mex

gold

Gre

at B

asin

Bol

ivar

Gab

riel

Mar

ket C

apita

lizat

ion

$0$50$100$150$200$250$300$350$400$450

$/oz

Gol

d

Market Capitalization Rock Value $/t Mkt Cap per Oz


Primary Gold Companies - Top 20 by Ounces(Red - Companies taken over or merged, Orange - takeover pending)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000IA

MG

OLD

Cry

stal

lex

Seab

ridge

Che

sape

ake

Am

eric

an G

old

Eldo

rado

Det

our G

old

Mot

o G

oldm

ines

Ariz

ona

Star

Cen

terr

a

Vist

a G

old

Aur

elia

n

Gre

ysta

r

Gab

riel

Rus

oro

Gol

d R

eser

ve

And

ina

Mira

mar

Osi

sko

Gre

at B

asin

Net O

z G

old

$0

$50

$100

$150

$200

$250

$300

$/oz

Gol

d

Net Oz Gold Rock Value $/t Mkt Cap per Oz

Copyright 2008 CanspecResearch LLC September 4, 2008

Primary Gold-Silver Companies - Top 20 by Ounces(Red - Companies taken over or merged, Orange - takeover pending)

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000C

hesa

peak

e

Am

eric

an G

old

IAM

GO

LD

Cry

stal

lex

Seab

ridge

Eldo

rado

Det

our G

old

Mot

o G

oldm

ines

Gre

ysta

r

Vist

a G

old

Cen

terr

a

Aur

elia

n

Gab

riel

Rus

oro

Gam

mon

Lak

e

Gol

d R

eser

ve

And

ina

Hig

h R

iver

Osi

sko

Intl

Min

eral

s

Net o

z G

old

Equi

v

$0

$50

$100

$150

$200

$250

$/t o

r $/o

z Au

Eq

Net oz Gold Equiv Rock Value $/t Mkt Cap per oz Gold Eq

Copyright 2008 Canspec Research

LLCSeptember 5, 2008

Primary Gold-Silver Companies - Top 21-40 by Ounces(Red - Companies taken over or merged, Orange - takeover pending)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000G

reat

Bas

in

Ban

ro

Mun

doro

Oce

anaG

old

Cre

w

Red

Bac

k

Dyn

asty

Met

als

Ana

tolia

Ore

zone

Jins

han

SEM

AFO

Gol

den

Star

Min

efin

ders

Ala

mos

Aur

izon

Cen

tury

Met

allic

Clif

ton

Star

GB

S

Wes

tern

Gol

dfie

lds

Net

oz

Gol

d E

quiv

$0

$50

$100

$150

$200

$250

$300

$/t o

r $/o

z Au

Eq





0

500,000

1,000,0001,500,000

2,000,000

2,500,000

3,000,0003,500,000

4,000,000

4,500,000

Palm

arej

o

Mid

way

Rai

ny R

iver

Gol

den

Que

en

Intl

Tow

er H

ill

Axm

in

Yuko

n-N

evad

a

Mex

gold

Rom

arco

Euro

pean

Gol

dfie

lds

Col

ombi

a G

oldf

ield

s

Stra

taG

old

And

ean

Res

ourc

es

Fron

teer

Com

aple

x

Apo

llo G

old

Bre

tt

Jagu

ar M

inin

g

St. A

ndre

w

Gry

phon

Gol

d

Net o

z G

old

Equ

iv

$0

$50

$100

$150

$200

$250

$300

$350

$/t o

r $/

oz A

u Eq



LLC September 5, 2008


0

500,000

1,000,000

1,500,000

2,000,000

2,500,000D

ioro

Intr

epid

Alh

ambr

a

Med

iterr

anea

n

Vere

naA

ustr

alia

nSo

lom

ons

Man

sfie

ld

Skyg

old

Cor

ner B

ay

Cas

tle G

old

Paci

fic R

im

Etru

scan

Kim

ber

Buf

falo

Gol

d

US

Gol

dM

iner

alD

epos

itsA

cadi

an

Tyhe

e

Pedi

men

t

Infin

ito

Net o

z G

old

Equi

v

$0

$50

$100

$150

$200

$250

$300

$/t o

r $/o

z Au

Eq




0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000G

old-

Ore

Fron

tier P

acifi

c

Man

o R

iver

Mos

s La

ke

Peta

quill

a M

nrls

Haw

thor

ne

Luna

Gol

d

Can

arc

Exet

er

Roy

al S

tand

ard

Gat

eway

Am

arill

o

Trad

e W

inds

Gol

den

Ban

d

Kirk

land

Lak

e

Lake

Sho

re

La M

anch

a

Klo

ndex

Cap

ital G

old

Emgo

ld

Net

oz

Gol

d E

quiv

$0

$100

$200

$300

$400

$500

$600

$700

$800

$/t o

r $/

oz A

u E

q




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Navigating the Lull in the Commodities Bull Market … · 2008. 11. 23. · Asset Backed Commercial...

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Transcript of Navigating the Lull in the Commodities Bull Market … · 2008. 11. 23. · Asset Backed Commercial...