Financings in Mining: April 2014

 
We are seeing continued momentum in the resource sector and are optimistic about the recovery of the Canadian equities. Financings in the mining sector have increased in both volume and capital raised in the last few months as companies are ramping up for exploration and development programs.

One of the most notable headlines of the month was Detour Gold Corp. successfully raising $172.5 million dollars through a bought financing at $9.25 per unit. The underwriting was led by BMO Capital Markets and RBC Capital Markets. Detour Gold is an emerging mid-tier gold producer in Canada. The Company is ramping up its 100% owned Detour Lake mine to a long life, large scale open pit operation. The Detour Lake mine has proven and probable reserves of 15.5 million ounces of gold.

The Venture Radar provides information about TSX and TSX Venture mining companies who are opening, updating and successfully closing financings.

In March 2014, the Venture Radar posted 125 deals of which 65 companies successfully raised a combined approximate value of $609 million. Approximately 60 new deals opened during March, with a combined value totaling over $206 million.
 

Top 10 Closed Financings in March 2014
Detour Gold Corp. $172.5m March 07, 2014
Rubicon Minerals Corp. $115.1m March 12, 2014
Reservoir Minerals Inc. $33.0m March 20, 2014
Roxgold Inc. $28.8m March 25, 2014
Mountain Province Diamonds Inc. $28.24m March 28, 2014
Pretivm Resource Inc $22.7m March 20, 2014
SilverCrest Mines Inc. $23.0m March 13, 2014
Laurentian Goldfields Ltd. $18.6m March 04, 2014
Lithium Americas Corp $18.6m March 18, 2014
Midas Gold Corp. $12.8m March 07, 2014

 
 

Will We Have Enough New Mines? — Richard Schodde

Sprott's Thoughts

By Henry Bonner (hbonner@sprottglobal.com)
Read On Sprott >

As metals prices boomed during the last decade, small explorers and big miners spent billions of shareholder dollars seeking new deposits. Investors wanted the high rewards of a discovery as metals soared in price. At $1,900 per ounce of gold, even mediocre finds could make money.

Richard Schodde, of MinEx Consulting, has studied past exploration cycles in detail. He says we are seeing a tightening of the sector, as the availability of capital has plummeted. Costs of exploration are coming down as companies cut back on high-salaried employees and reduce operating costs.

The following chart from MinEx shows exploration expenditures rising quickly during the boom years:

The amount of money spent exploring rose during the last decade from $2.9 in 2002 to $29.4 billion in 2012, before falling back to $21 billion in 2013 says Mr. Schodde. Over the time-frame 2002-12 $136 billion was spent world-wide on non-bulk exploration, resulting in 647 significant new discoveries, of which only 18 are considered to be ‘top tier.’

Despite a 10-fold increase in the amount of money spent on exploration over the last decade, the amount of new discoveries was relatively unchanged – meaning that more money was spent per new discovery. Mr. Schodde explains that as more money went into the sector, expenses related to exploring went up. Geologists and engineers demanded higher salaries. Drilling equipment and operators became more expensive, and money was spent liberally on general and administrative expenses.

As an ebullient market sentiment took hold, money was also wasted on projects with negligible odds of success or likelihood of development and often incompetent management. So despite high expenditures of capital, the pace of discoveries remained relatively tame.

Mr. Schodde notes that today, salaries and G&A expenses have come down since 2012, and he believes that this trend will continue as capital remains scarce.

Adding to the challenge, finding new deposits will become much tougher for the exploration industry, he says, because most ‘easy-to-find’ deposits have already been discovered. Explorers will have to drill deeper in known mineral-rich locations, such as Western Australia, or look in problematic jurisdictions, such as Central Africa. Making discoveries should become more costly for these reasons.

Already, new discoveries are barely keeping pace with depletion, says Mr. Schodde.

As he explains, only about half of new decently-sized deposits will later become a mine.1 Depending on the commodity and location it will take 10-15 years on average for a discovery to become a mine. So we must discover about twice as much metal today as we will be using in a decade from now in order to maintain supply.

Looking ahead to expected production rates in 2020, gold is being discovered at 1.5 times the expected depletion rate. New copper deposits are being discovered at 1.7 times the projected consumption rate in 2020, which is also below the ‘replacement rate’ for the metal.

The exploration sector is contracting — spending less money and pursuing fewer projects – and is being forced to be more efficient, Mr. Schodde explains.

While exploration expenses have come down, the need for new deposits is strong. The exploration industry will need to make more new discoveries, despite decreasing capital available, or the supply of mined metals is likely to decline in coming years.

Richard Schodde has over 30 years of experience in a wide variety of project analysis and strategic planning roles within the international resources industry – including 15 years at WMC (in its Business Development Group and as Strategic Planning Manager for the Exploration Division) and more recently, 4 years at BHP Billiton (as Minerals Economist in their Global Exploration Team). In 2008 he founded MinEx Consulting to provide strategic and economic advice to mining and exploration companies.

http://www.minexconsulting.com/publications.html  Invest with Sprott

This information is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination by Sprott Global Resource Investments Ltd. that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The products discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested.

Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Natural resource investments are influenced by the price of underlying commodities like oil, gas, metals, coal, etc.; several of which trade on various exchanges and have price fluctuations based on short-term dynamics partly driven by demand/supply and nowadays also by investment flows. Natural resource investments tend to react more sensitively to global events and economic data than other sectors, whether it is a natural disaster like an earthquake, political upheaval in the Middle East or release of employment data in the U.S. Low priced securities can be very risky and may result in the loss of part or all of your investment. Because of significant volatility, large dealer spreads and very limited market liquidity, typically you will not be able to sell a low priced security immediately back to the dealer at the same price it sold the stock to you. In some cases, the stock may fall quickly in value. Investing in foreign markets may entail greater risks than those normally associated with domestic markets, such as political, currency, economic and market risks. You should carefully consider whether trading in low priced and international securities is suitable for you in light of your circumstances and financial resources. Past performance is no guarantee of future returns. Sprott Global, entities that it controls, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell the same at any time.

ExpoPlaza Latina – April 30th

 

Special CAMBRIDGE HOUSE Rate:
SAVE 20% on the day pass, enter promo code ‘cambridge’ here

Western Canada – Gateway to Asia Pacific & Latin America

Ever thought of doing business in Latin America? Latincouver brings you ExpoPlaza Latina 2014, the only business conference in Western Canada which explores opportunities in Asia Pacific & Latin American trade focusing on the mining, oil & gas, energy, innovation and cleantech industries with discussions on The Pacific Alliance. The Pacific Alliance summit binds Colombia-Mexico-Chile-Peru and represents a huge 50% of all trade flows in LatAm with USD $556 billion in exports in 2012.

The business conference attracts speakers, delegates and Consulate representatives from Latin America and Western Canada, this is the event to find high-profile business contacts and really get involved in the discussion. Watch the VIDEO.

Don’t miss ExpoPlaza Latina April 30th, 2014 at The Wosk Centre for Dialogue, SFU in Vancouver!

Topics to be covered this year include:

  • * Investment Opportunities in the Pacific Alliance Region
  • * Successful CSR Initiatives in Latin America
  • * Mining Medium Term Forecast
  • * Startup Incubation in the Americas
  • * SMEs Accessing the Latin American Market – Tips and Case Studies

For the latest news release: http://latincouver.ca/images/News_Release_2014.pdf

For more information: www.expoplazalatina.com

 

 

Macro Market Insights: Four Years On

 

Visit Border Gold Here

Does Greece returning to the sovereign debt markets indicate the worst of the euro crisis is now behind us? That question cannot be answered with any certainty. But does the fact that this country was unable to go to the public debt markets since 2010, and now has auctioned 5 year notes below 5 per cent bear any long-term implications? The answer is a resounding no.
To start with background, Greece had their first public debt auction since March of 2010 last week. Only a meager 3 billion euros were auctioned, but demand was so strong the Greek Treasury was able to do fill the orders at a lower than anticipated yield. Some sources had demand at more than 20 billion euros. As interest rates in North America continue to see upward momentum, it might still be safe to suggest that the bull market in bonds isn’t over in Europe.

The Eurozone has advanced significantly from the dark period referred to as the Euro Crises. So much of this is attributed to those oft-quoted words of the European Central Bank President Mario Draghi, insisting to do whatever it takes to save the euro. And to the dismay of many pundits, confidence has been restored in the Eurozone without any market intervention or extraordinary monetary stimulus.

What is also astonishing about the relatively low yields (compared to 4 years prior) of peripheral euro nations’ debt is the unpriced risk in depreciation of the euro measured against the US dollar. The debate still continues as to whether a monetary union of that size and cultural divergence is actually sustainable in the long term. And given a forecasted dire outcome by many that would be associated with a collapse of the currency, the euro continues to defy forecasts and even appreciate in this tepid economic growth environment.

Beyond a low growth environment, there are a myriad of additional factors why Greek debt is attracting such high demand. Foremost, it’s because interest rates will more likely see downward pressure in the Eurozone. The euro denominated countries still sees disinflationary characteristics in many of its markets, and bizarrely it is in tandem with an appreciating euro currency. Both factors contribute to or are associated with downward moves in interest rates.

Importantly, investors are convinced that Mario Draghi and the European Central Bank stand ready, and potentially will act in the near future to unleash their own version of Quantitative Easing. Should this be the case, a weaker euro will ultimately prevail and create the sudden selloff many are anticipating, but the mere fact that investors are still convinced the ECB will act and be effective means there is already some level of assistance being provided to the markets through instilled confidence.
The final factor is all about austerity. The euro crises was about debt, and governments are all implementing policy with the focus of fiscal rebalancing and restraining public spending. This is not a bullish call on Europe, but highlighting that EU member governments are relatively sounder from a fiscal standpoint (thus, this is damning with faint praise given recent history).Greece’s return to the bond market was extremely well welcomed, but for the investment opportunity in an environment that will continue to see downward pressure in European interest rates. This is not to minimize that Greece still has a painful road ahead. Following six straight years of recession, the Greek economy now produces 25 per cent less output. Public debt is still 175 per cent of GDP, which essentially requires Greece to seek outside funding should their economy hit another speed bump. And not forgetting a tragic scene of unemployed youth, there’s no reason to believe they’re close to being back to normal just yet.

-

All investments contain risks and may lose value. This material is the opinion of its author(s) and is not the opinion of Border Gold Corp.This material is shared for informational purposes only. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission. Border Gold Corp. (BGC) is a privately owned company located near Vancouver, BC. ©2014, BGC.

What India’s 815 Million Voters Have on Their Minds

 

By Frank Holmes
Read on usfunds.com here

April 10, 2014

India has kicked off the world’s largest election this week, with its national elections that will run fromApril 7 through May 12. The second-most populous country, India is home to 1.2 billion people. The size of the voting population is a staggering 815 million.

The election will decide the parliament and ultimately determine the next Prime Minister of the country.

India is a fascinating country that I have written about many times in relation to gold’s Love Trade. The love for gold is a cultural phenomenon that is shown in gifts given for weddings and festivals, and the idea that one’s wealth is defined by ownership of physical gold jewelry and coins.

In my travels I have seen this love for gold first-hand, and witnessed the vast population that makes up the energy of India. Did you know that half of India’s population is under the age of 25? This youthful group makes up 600 million people, equating to twice the population of the U.S.!

India’s young population cares about jobs and economic opportunities. This will likely be the focus on their minds when they go to the voting polls. The candidate who seems favored to win the office of prime minister is Narendra Modi, of the Bharatiya Janata Party (BJP).  Modi has a complicated past, with connections to violent, sectarian events. But as The Economist describes him, he is also known as “a man who, by his own efforts, rose from humble beginnings as a tea-seller.”   This boot-straps tale resonates with the voters who are reaching to improve their own economic situations.

Modi is known as a business-friendly candidate. In his home state, he has a history of being open to foreign investment, and has pursued economic relationships with Europe and the U.S.

Over the past decade, a great shift has taken place in India. Urbanization trends show that about half of the population lives in urban areas. Although official government definitions of rural and urban areas don’t quite match what we think of in the West, the trend shows that the number of urban dwellers could double in the next 25 years.

Urban dwelling usually is paired with an increase in wealth as city residents have more regular incomes. We’ve seen this increase in wealth with the rise in cell phone usage in India and television ownership. Now, 65 percent of Indian households own a TV set. With Internet-enabled phones and televisions, the people are connected and share ideas across the country.

These people are striving for the American Dream. As I’ve mentioned, every American born will need whopping 2.9 million pounds of minerals, metals and fuels in their lifetime. When you think about babies born in India, aspiring to the American lifestyle, you can begin to recognize the implications for resources demand in this part of the world.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the links above, you will be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content.

A New Industry Was Born Today–and so far it’s a Monopoly

 

There is a multi-billion dollar problem in the oil patch just looking for a solution—get oil to flow better along the horizontal leg of a well.

A small Canadian company called Raise Production Inc. (RPC-TSXv; GLKFF-PINK) thinks it may have the answer.

They have developed a way to place many small motors down the horizontal leg of a well bore and have them fire in parallel—that means right after each along the well—creating multiple draw down points for oil to be hurried along the well to the vertical part of the well bore.

This beta technology is not yet commercial, but on April 10 they announced their first test well increased production by 300%, and the stock has moved 100% today—a double. The Market believes it will work.

They’ve created an entire new industry—horizontal leg engineering. There is reservoir engineering, and now this. This management team had an idea that oil reservoirs are all very different, and should not decline at the same rate. They assumed that the reason most decline rates are so similar is because of a mechanical issue in the horizontal leg.

And they believed they could fix that. Their little motor system appears does that.

The potential is enormous. Over the next three to five years there will be 26,000 horizontal oil wells drilled in the United States alone just to meet the drilling requirements of land leases.

In the five years that follow that, the energy industry is still going to be making “swiss cheese” of the North American landscape drilling thousands of wells.

There are billions and billions of barrels in the ground in these horizontal plays that we still can’t get at with the current methods of horizontal drilling.

Five years ago this horizontal drilling revolution was barely on anyone’s radar. Today millions and millions of barrels of oil are being produced from horizontal wells.
Precipitous Decline Curves – The Curse Of Horizontal Oil Production

At this point everyone knows about the horizontal oil boom that has transformed North American oil production. But North American horizontal oil wells today likely needs an oil price of $85 or higher to generate any positive return.

What makes these horizontal oil wells require such high oil prices is their production profile. The current nature of a horizontal oil well is an initial surge of “flush” production. That flush production is followed by a first year decline curve that is incredibly steep.

yearly declines

The major horizontal oil fields in Canada and the United States all have similarly high rates of first year declines:

 

horizontal flow II

Every one of the major oil fields in North America loses more than half of their initial rate of production after just one year.

Compare that to a vertical oil well that is drilled into a conventional reservoir. Those wells decline at much slower rates which allows for much stronger cash flow for a longer period of time.

The solution proposed by Raise Production could turn the decline curve of a horizontal well into something that looks more like a conventional vertical well.

Any decrease in the rate of decline would increase the return on capital invested drilling a well. It would mean that every single horizontal well that is drilled going forward using this technology would make more money for the driller than it would without it.

Such a significant increase in the rate of decline would mean tens of billions of dollars of value to the energy industry.

Therefore, a patented solution that significantly changes the decline curve on horizontal oil production would also be worth billions.

Raise Production Inc’s Novel Production Management System

Raise Production believes that problem with horizontal wells that creates the steep declines is the lack of flow management. A horizontal well goes straight down vertically and, over quite a distance, turns at a right angle and continues straight sideways.

Raise Production’s technology aims move oil along the horizontal section of the well much better to the vertical section where it is “lifted” to the surface.

raise II
According Raise Production current horizontal wells suffer from the following:
  •        Isolation of the oil at the toe (the far end) of the horizontal well
  •        An increase in gas to oil ratios
  •        Inefficient mobilization of fluids
Raise Production’s patented technology addresses these challenges.

The Raise Production system is designed to go to work in the horizontal section of the wellbore.  The system places multiple pumps along the horizontal section of the well.

The system “sweeps” the oil along the horizontal section of the well and toward the vertical section.   This helps the oil reach a point where the normal artificial lift in the vertical portion of the well can influence the flow of oil to the surface.

The result of all of this should be that more oil gets to the vertical section of the well, and oil that would have eventually gotten there on its own arrives faster.

More oil sooner equals higher profit per well and higher rates of production.
First Field Testing Is Complete

Raise Production has spent two and a half years and lots of blood, sweat and tears developing the system.

The company has gone from the conceptual design phase, to industry focus groups, to detailed design, to securing patent protection and finally construction of a proto-type.

All of that work culminated last August with the deployment of the first proto-type system into the field.

On October 21 of last year Raise announced the completion of that initial 60 day field test.

The company was pleased with the results which indicated that the system worked as designed, is stable and that it can have a meaningful impact on horizontal flow.

Raise also announced that through the testing some additional things were learned that can lead to improvements in the system and additional patents.

Based on the results of this field test Raise and its industry partner agreed to try a second deployment of the system at the end of November on the same wellbore.

Those next set of test results were announced last night from a well in the Viking play in Saskatchewan—and showed increases in well bore production of 300%

If this second field test also yields positive results Raise intends to roll out a commercial version of the system in the Viking light oil play in 2014.

The potential is huge, but it’s early, early days. But the Market believes.

DISCLOSURE–I do not own this stock.

PS–Global Cooling Part III is coming Monday!

PPS–The OGIB rate increase happens on April 23–beat the rush and save money! http://oilandgas-investments.com/subscribe-here/

America’s Day of Reckoning Is Coming

Casey Research is one of the top firms giving insight and research to investors. Yet again they have blown us away with an exceptional video on where America currently stands and what it needs to be prepared for.

The following is a letter from the the CEO of Casey Research, Olivier Garett.

Dear Reader,

Today, thousands of investors watched my friends and world-class investment and political experts Doug Casey, David Walker, Jane Kokan, Dr. André Gerolymatos, Scott Taylor, and Jeff Opdyke discuss the coming meltdown of America.

(If you missed the exclusive video premiere, click here to watch it now.)

Our hope is that this urgent video has opened your eyes to what lies ahead for the US economy. Maybe not tomorrow, maybe not next week, but the outcome is inevitable.

And if we accomplished our goal, you now feel compelled to make plans to protect yourself… and find opportunities to profit… during the coming crisis.

That’s why I’m writing you today.

We’ve spent months of research putting together the authoritative guide on how to successfully capitalize on the unique investment opportunities that an economic meltdown will bring.

But you need to move quickly to position yourself for maximum profits, so please click here to get the full details on how you can get started preserving your family’s assets today…

Sincerely,
[signature]-Olivier Garret
Olivier Garret
CEO, CASEY RESEARCH

Spotlight Series with Don Mosher

 

Meet Don Mosher, Business Development at Gold Reach Resources Ltd. (TSX-V: GRV)

CH: Don, what has lead to your current position at this point in your career?

Don: I was a former broker consulting with public companies for 20 years

CH: What’s your greatest career success?

Don: 3 of my former client’s evolved from grass roots concepts to production

CH: What are your career aspirations?

Don: To continue to develop more successful ideas

CH:
 Who’s your industry role model? 

Don: Ned Goodman, President & CEO at Dundee Corporation

CH: Who’s your industry role model?

CH: Do you have any latest company news to share?

Don: We’ve upgraded resource reports on two starter pits at the Ootsa Project

CH: What’s your greatest company success?

Don: Drilling a deep hole containing continuous mineralization over 840 metres in length open at depth

CH: Can you give us a fun fact about your company?

Don: It’s like a family run business with the Board, Management and family, friends and associates owning a majority of the shares

CH: And how about a fun fact about you?

Don: I’ll never be older than 13 years

CH: Where’s the best place to ‘do coffee’ in Vancouver?

Don: Sciue on West Pender and Howe

CH: Who would you most like to meet at Canadian Investor Conference?

Don: Ross Beaty, Chairman at Pan American Silver Corp. and Alterra Power Corp.

CH: Thanks for your time Don. We look forward to having you and Gold Reach exhibit at the Canadian Investor Conference.

To meet Don in person come down to the Canadian Investor Conference at the Vancouver Convention Centre West on June 1-2, 2014. Visit booth # 312 to find out more about Gold Reach Resources Ltd.

About the Conference:

The Canadian Investor Conference is scheduled to debut at the Vancouver Convention Centre West, on June 1-2, 2014 and will offer a diversified series of opportunities and expert opinions. The conference will be Canada’s leading diversified investment event in Vancouver, Canada. Various industries will come together for this 2-day event to cover Resources, Technology, Mineral Exploration, Oil & Gas, LNG, Agriculture, Medical Marijuana, Life Sciences, Energy Metals, and Real Estate. Newsletter writers, fund managers and analysts will host keynote sessions where attendees can expect a wealth of knowledge covering direct investments, speculative investing, macro trends, economic analysis and investing strategies. Media coverage will be broadcasted from the tradeshow floor, which will host over 100 company booths, 3 speaker halls and an expected attendance of thousands of nationals and international investors.

 

To register for the Canadian Investor Conference now, visit our registration page. Free online registration is available now. By registering your attendance online now, you will save a $20 entrance fee charged at the door.

What’s The Bright Spot for Investors in Global Cooling? Part II


Editors Note:
Keith will be speaking at the upcoming Canadian Investors Conference June 1 & 2

 

If history is any guide, the world will continue its current 15 year cooling trend for another 20 years potentially.  In fact, there is a good chance the earth is about to go into one of its coolest periods in the last 250 years.

In a new report by Boston-based Unit Economics, they explain how sunspot activity is the key to understanding earth’s temperature.   Sunspots have very predictable and accurate cycles.   The last sunspot peak was March 2000 in the sunspot cycle that ended in 2008.

CRU global temperatue
What does near term global cooling mean for energy investors?  Among other potential trades, CEO Nathan Weiss suggests grain crops for the next two years should provide bumper harvests, keeping supplies high and prices low—which is great news for ethanol stocks. (Yes I am long ethanol  ;-) )Unit Economics says the best way to assess solar activity is through sunspot activity.  (I’m going to get a little technical here so you may have to re-read a couple paragraphs.)The sun is a ball of circulating plasma. Sometimes the circulations become so energetic that plasma escapes, ejecting out into space, where it cools rapidly and is pulled back by the sun’s gravitational pull.From earth, the cooler returning plasma appears darker than the rest of the sun, creating a sunspot. And the more active the sun, the more frequent its spots.

A more active sun also has another important characteristic: a stronger magnetic field.

Grade 9 science shows that a magnetic field forms when electricity runs through the coils of an electric motor.  Well, in the same way, the circulation of charged plasma creates a magnetic field around the sun. When those circulations ramp up, the magnetic field strengthens.

A stronger magnetic field means fewer particles from outside our solar system (cosmic rays)  make it to earth. However, that actually makes for a warmer world.

The reason is clouds. Cosmic ray particles  actually seed cloud formation. When the sun is not very active, lots of particles penetrate its relatively weak magnetic field and make it to earth. Those particles seed lots of clouds, creating a cloud layer that reflects the barrage of particles back into space.

Of the solar energy that reaches (and warms) our atmosphere, about 30% are reflected right back into space, largely thanks to clouds. Thus the cloudier it is, the colder our world.

When the sun is active (more sunspots) and its magnetic field strong, fewer cosmic ray  particles means less cloud cover and a warmer planet.

That’s the theory – and the data backs it up.  Look at these three charts:

 400 years sunspot
 temp solar radiation
 sunspots counts
It seems clear solar activity plays a major role in global temperatures.But the best news is yet to come: solar activity follows surprisingly stable – and thus predictable – cycles. The shortest solar cycle averages 11 years in length. Other concurrent cycles have durations of 22, 53, 88, 106, 213, and 420 years.Cycles also vary in intensity. Shorter cycles are more intense. That’s because total solar electromagnetic output is pretty consistent from one cycle to the next, and so  shorter cycles have higher peaks.Combining these cycles and their intensities, scientists created a model of solar activity that fits historic sunspot observations quite well – and tells us what to expect from the sun in the future.

The bottom line is that the current lull in solar activity is highly likely to persist for another 19 years. Yup, lots of cosmic particles will create lots of clouds and keep the earth cool for the next two decades.

Moreover, we are going through one of the quietest periods of solar activity in known history – and it may well herald another Dalton Minimum—the sunspot low of the last 1000 years from 1650-1850 that is the reason we have  all the paintings of skating on the River Thames in London England.

Remember that long solar cycles are much less intense than short ones. Scientists time cycles from trough to trough, so a new cycle starts when solar activity begins increasing after years of decline. The duration of the decline – the time from peak to trough – gives good hints as to the nature of the next cycle.

Solar cycles that don’t get underway until more than 92 months after the previous peak reach less than half the intensity of those that kick off before 92 months have passed. Delayed cycles are also much longer. The current cycle, dubbed Solar Cycle 24, did not really get going until early 2010 – 126 months after the peak of Solar Cycle 23.

The weakest solar cycle of modern times was Cycle 5, which lasted from 1796 to 1830—that was the  Dalton Minimum.  Temperatures were a full 2 degrees lower than average and history books talk of summers that never arrived. Solar Cycle 5 started 123 months after the peak of Solar Cycle 4.

The sun is also very quiet these days. We are supposed to be in the midst of an upswing in solar activity but the best guess puts the peak of Solar Cycle 24 at between 33.75 and 40.5 sunspots per year (after accounting for our ever-increasing ability to detect sunspots today compared to two hundred years ago). Solar Cycle 5 peaked at 49.2 sunspots.

As NASA solar physicist David Hathaway puts it, describing the great plasma conveyor belt of the sun: “It’s off the bottom of the charts… We’ve never seen speeds so low.”

BOTTOM LINE–Sunspot activity is suggesting we are moving into a time of lower temperatures on Earth this solar cycle.  (You can see the times of the sunspot cycles here: http://en.wikipedia.org/wiki/List_of_solar_cycles)

There are two intriguing investment implications from this sunspot theory. Grain production is obviously impacted by weather and climate.  The world is now into Year 7 of the current sunspot cycle.  In a statistical review of grain prices in the last few solar cycles, Unit Economics found that Year 4–2011–was the peak for grain prices.  Corn was up 57% that year and wheat was up 21%.

But this year–2014–should be the top growing year for these crops; bumper harvests are to be expected, keeping agricultural commodity prices low.    This should be continued good news for US ethanol producers–Green Plains Renewable Energy (GPRE-NASD), Pacific Ethanol (PEIX-NASD), and REX American Resources (REX-NYSE).   They already have great stock charts.

(In the long run (five or so years out) – shorter growing seasons resulting from colder weather will send grain prices higher)

The second bit of data crunching Unit Economics did was much more macro-oriented.  In simplistic terms, when temperatures
decline by 0.25 degrees Celsius in a year vs. the 5 year rolling trend, the stock market generally declines.  And the opposite holds true: when temperatures increase by 0.25 degrees against the trend, market action is positive.

Wait, you say. All of this seems to make sense…but what about everything I’ve hear for the last 20 years about our warming planet?

Manmade climate change theories and solar activity can co-exist!  Weak solar activity can overwhelm long-term trends and result in cooler weather for the next two decades, even if man is warming the Earth.  You may change your mind about ‘Climate Change,’ however, when you read Part III.

Rick Rule: Platinum, Palladium Supply Squeeze Will Turn Ugly – Sprotts Thoughts

Friday, April 4, 2014
Henry Bonner

 

Strikes at South African mines have caused a massive drop in platinum and palladium production. And the world’s palladium supply could decline by 41% overnight if the West imposes export sanctions on Russia1.  Speculators are betting that these events will reduce supply of the metals and drive up prices.Rick Rule, Chairman and Founder of Sprott Global Resource Investments Ltd., recently weighed in. He believes platinum and palladium could go lower in the near-term, as fears of a sudden crunch dissipate.

The real reason platinum and palladium should rise over the coming years has nothing to do with geopolitics or labor issues, he believes. Rick begins:

The political dispute with Russia is not particularly relevant to the platinum and palladium industry, except in the extremely short term. Cutting off exports from Russia is not in the West’s interest, and certainly not in Russia’s interest. So I doubt that a politically-motivated ban on exporting the metals will arise.

As these fears subside, it could take the metals’ prices lower, as speculators focus on short-term effects. Meanwhile, Russia’s exports are likely to decrease for other reasons, which many investors might miss:

The supply of platinum and palladium from Russia is threatened by decreasing ore grades at depth in the Norilsk mines, where most of the metals are mined. These mines have been in operation since the early 20th century, so they are likely nearly depleted.

New mines in Russia are probably 10 years away. So at least for the next decade, production should continue to decrease as deposits are increasingly mined out. Continue reading

“Gold price will probably do better in the second half of 2014 than was predicted,” says Ubika Research Senior Analyst Vikas Ranjan

 

Vikas Ranjan, Senior Analyst at Ubika Research, tells SmallCapPower.com “Our outlook for the gold price is that it will range from US$1200 to $1600 in 2014 but will close the year at about $1400 per ounce,” in today’s interview. Mr. Ranjan talks about the impact of China overtaking India as the largest consumer of gold in the world, outlines the types of gold exposure every investor should have, and mentions one gold junior in particular that is well funded with the potential to be Ontario’s next gold producer.

Some of the companies mentioned include Alamos Gold Inc. (TSX: AGI), Argonaut Gold Inc. (TSX: AR), Treasury Metals Inc. (TSX: TML), and Dynacor Gold Mines Inc. (TSX: DNG).

See The Interview Here

 

 

Q1 Economic and Energy Metals Review – Chris Berry

 

Editors Note: Chris Berry will be speaking at the upcoming Canadian Investors Conference June 1 & 2

Good Morning Everyone,

This morning we offer a Q1 2014 review of the major macroeconomic events of the past quarter as well as a review of select Energy Metals including uranium, rare earths, graphite, lithium, cobalt, fertilizers, tin, and titanium.

Despite the uncertainty which overhangs much of the global economy, select commodities are off to a solid start. We offer our insights as to why and positioning for a way forward.

View the Q1 Report here

UrtheCast releases its first images of Earth from space

 

Editors Note: UrtheCast Corp. will be exhibiting at the Canadian Investors Conference June 1 & 2 in Vancouver.

Read on CBC Here 

Vancouver-based UrtheCast Corp. released an image of 300 square kilometres around Moneague, Jamaica, captured by its medium-resolution camera on March 28.

Russian cosmonauts reattached both that camera and an ultra HD video camera to the outside of the Russian segment of the International Space Station during a spacewalk in January, following a previous unsuccessful installation attempt.

The video camera is still being calibrated and tested.

In the newly released image, you can make out streets, buildings, fields and waterways, surrounded by a bumpy landscape of round, green hills. Each pixel in the image represents six metres by six metres.

That is quite a bit lower than high-resolution imagery from commercial satellites operated by some other companies such as U.S.-based DigitalGlobe that allow you to distinguish objects as small as 50 centimetres by 50 centimetres, and clearly show objects such as vehicles.

However, UrtheCast says it will make images from both cameras available just a few hours after they’re captured, providing a unique “near realtime flyover view” of the planet as the space station orbits the Earth 16 times a day.

UrtheCast’s video camera is expected to be able to resolve objects as small as one metre wide.

That camera is pointable via the internet, and UrtheCast plans to charge customers for control over it.

The company expects customers to include governments, non-governmental organizations and corporations that would like particular types of live and archival images for purposes such as monitoring the environment.