Commodities and Resource

The Impact of the TSX Venture on the Economy10 min read

Comments (28)
  1. Pierre says:

    Why is Gran Columbia Corp stock so low look at the amount of gold they produce and at one of the lower costs?

  2. There is statistics and there is reality. I often wonder if the people who write these articles on investing in mining companies have ever been in a mine. When I worked for INCO in the 1960s they employed 22,000 workers in Sudbury. They are now down to about 3,000. How were they able to shrink the number of employees? Through technology they made their employees many times more productive while developing cheaper extraction methods. There are real mines and there are paper mines – who are just set up to separate careless investors from their hard earned cash. I used to suckerl phone lists to these paper mining companies who survived because gullible people believed them when they said they were going to get rich off penny stocks. It has been my experience that the only ones who got rich were the promoters. Since they sell the sizzle and not the steak, these 700 paper mining companies will survive no matter what happens to commodities. That is why I would not touch a penny mining stock with a ten foot pole.

    1. Taylor says:

      Ian, you’re right but you also forget that all mines start out the same way: from a discovery. These discoveries are made by juniors. Yes, there are scum bags, but there are also great projects that need funding.

  3. Pierre says:

    I totally agree with Mr Ian MacDonald, and technology has replaced many workers and made a few more productive an various sectors.t

  4. don johnson says:

    I don’t work in the industry but I invest there. I’m very disappointed in what I hear (abt TSX) and more disappointed in what I see in losses in my holdings. Makes an investor think about leaving.

  5. George Adams says:

    …AND, it going to get worse IF my metals analyst (Larry Edelson) is correct. The next support level in gold is 1,184 and could drop to 1,028.4 before going up to $5,000+. He says that many miners will go bankrupt. Thanks for the tip on Timmins and Corvus.

  6. Webgogs says:

    Ivan is slowly elucidating the root and forward costs of what I consider a very corrupt set of acts by a small group of people. Follow the money…

    The costs itemized are just the beginning. Look at what will happen over the next 17 years. From exploration to the first pay ore there is a very long interval. As the exploration gets wiped out where will the next new supply come from?

    A detailed explanation of the supply/ demand metrics won’t fit in a comment. It needs to be fleshed out. In short, it’s what I refer to as compression. Yes, minerals will become so expensive that it will attract the right people who want to go explore for them but how will they be funded? Will they be employees of banks with a fixed salary? (Pay determined by the mining barons and not by success). Somehow I don’t see that ever happening.

    Will the Majors take on risk and alienate their share holders who are becoming even more risk adverse? I don’t see much of that happening either. The stats on that are 1 in 1000. Not very good odds to go to your base with. This is why there is reward for real discoveries. This was what drove penny stock investors. Alas, no more.

    So what happens when Highland Valley see the end of the mine date approach? Yes, they can take the equipment to Schaft Creek or Galore and help reduce their capex. Yes, the prices will support those mines and the GJ project might actually come into play.

    However, look at the longer term. There’s very little to expand upon once these reach capacity. Shaft Creek and Galore represent about 50 years of mining but at a fixed rate. Western Copper might last 20 years and there are a few other mega projects that can come online. But, even if you add the top 10 projects output together you might only get enough supply to sustain 12% of the global supply.

    Looking at the Chinese project and the 14 top Chilean projects all combined you can see that supply can be sustained for just long enough to meet demand but not for 20 years. After this you start going down the list of projects. (There’s a CIBC report of the main projects). Of these you will see that many are challenged. Even if all of them produce at the rate they might produce at you begin to see a fundamental problem coming. After that there are no more!

    Normally, you see a list of potential projects that stand a chance of becoming a reality and of those you can discount 1/2 right off the get go. They are not just price sensitive but some are just not ever going to be mined. Water is a big issue. Not enough or too much. We all saw the big slide. Did you know that was caused by the changing weather patterns? If you think that’s going to get better… Not!

    Technology is not going to save us. BHP CEO comes out and says things don’t look so bad. Really? Just how deep do you think we can go? We are going to have to get really inventive to get at some of the stuff we already know about. I bring up Schaft Creek because I know a lot about it. At 700 meters there is what appears to be another high grade deposit. Look at the width of the valley… Do they move Mount Lacasse entirely to get at it 25 years from now?

    I can agree that we will bring on some advancements and probably mine the ocean too but we are going to face some serious pain in the near future. All of these will require exploration and a great deal of risk. Who will take the chance? It really comes down to this one fundamental question.

    Now look at gold. The top 100 deposits with 1 million ounces or more. Have you groomed the list? Worked out the metrics of their economical attributes? I laughed recently when I heard a fellow say to another that we don’t really need gold. What a guffaw. Gold is used in all kinds of applications. Just what does he think a cranie set is made out off? If you need brain surgery do you want them going in with stainless steel?

    We don’t have a replacement for gold. Equedia always talks about the safe haven gold offers and for good reason. Perhaps we need to ask ourselves why gold ever became the standard store of wealth? Was it just the beauty and luster? Something tells me it was more than just the demand of the rich that made it so. Gold was used.

    Things that are used have value. The more useful the more value. Right now, the number one use is that it is real money. It is the great equalizer. You can’t inflate it and the more scare the supply becomes the more togas and camels it will buy. It has a direct relation to the physical effort that it takes to obtain it. Whether the banks like it or not, their manipulations are by definition, short lived. Manipulation has come and gone and gold is still here. It stands the test of time.

    From the top 100 list you can see that it’s getting a whole lot harder to find size and grade much faster than for other metals. Will they move the glacier in our life times or do they have to wait for it to melt on its own?

    I was going to write more about this on my blog but Ivan has much better access to charts and facts than I do. I hope he will cover the extended view in detail so I can expand on that on my blog with my own view point.

    I do think the next letter will be an eye opener. It amazes how few investors actually know what rules were changed and what those did to the market. What I am hearing however, is that more people are getting the message. I’m beginning to hear more educated discussion about these issues and that’s a very good thing.

    Keep up the good work.

    Thank You,

    1. SeniorMiner says:

      Very very well put WEbs. Its amazing to think too that there are those who think the Venture is a bunch of crooks and no one should invest in them. Yes there are bad guys. But there are bad guys in every sector, including the banking sector. Look at the 2008 crisis. Look at subprime. All major banks – yet people still invest and put their cash with them.

      Webs, you put it best the whole destruction is because of a small group of bad crooks that ruin it for every one else.

  7. norman cartmell says:

    Keep up the good work we will eventually be rewarded.

    1. Kevin says:

      Rewarded with an exchange that loses is money???

  8. Reinier says:

    Tons of people should write to the Canadian Securities Administrators Regulatory Authorities that they are instrumental in utterly destroying the Venture Exchange by singularly looking after revolving door big Finance interests rather than Canada and the Canadian investor at large.
    CSA Secretariat
    Valeurs mobilières / Canadian Securities Administrators
    (514) 864-9510

  9. THe VSE could help itself too. I am tired of hearing how the VSE is suffering the biggest drought in history yet hear nothing from the players as to how they intend on fixing it. It seems they will not come up with anything that interferes with their ability to make money on insider info.
    For instance. If a CEO approaches a Brokerage for money. Then the moment he approaches them they are no longer allowed to trade his stock. Why? Well the VSE Brokerages have this little collusional knack of driving a stocks price down before a PP is finalized. They do it communally by shorting the stock the moment the CEO walks through the door looking for money. The CEO goes from door to door searching. As he does, each door/brokerage then shorts or sells the stock. Then magically after the PP is priced at chump change the stock starts upward again. If the slime that calls themselves brokerages for the VSE were to clean up their act people would be more willing to part with their money for this exchange. However, this is just one example of many. Once a slime always a slime. So complain about poor conditions all you want, the fact is, until we revamp our den of thieves it goes nowhere until greed dominates the junior market again

  10. george says:

    Why does the TSX-V not address these problems? The temporary relief measures are put out there only a few months at a time when everyone else knows that this is a long term problem. The TSX-V allow you to try to market a financing at 1 or 2 cents while the upside is in a warrant that has to be 10 cents or higher after the first 12 months. Even the regular rules are out of whack. A financing at the 5 cent minimum has to have a warrant that is at a 100% premium of 10 cents even though the TSX-V rules say a warrant can be at a 50% premium to market.

    1. JimmyC says:

      Welcome to the world of regulators who has likely never worked in the capital markets or traded a stock in their lives.

  11. Frank W. Reusch says:

    The short term effect of losing exploration is one thing, but the long term cost could be in the trillions. Over regulating is probably doing more harm than good as this can will effect early exploration especially hard.

    1. Tom says:

      I don’t know about trillions but it will cost us a lot. How do you regulate an exchange with so many crooks, but without hurting the others?

  12. George Adams says:

    I tried to buy Clovus Gold (CORVF) and the Brokerage House said that the stock could only be sold since June 18th

    1. Pete says:

      Say what? They can only sell stock? That doesn’t make any sense at all…what kind of brokerage are you using????

  13. Jin says:

    BAR.V down 75% from highs in January….Why?


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