Metals and Mining

Becareful. There is a clear and present danger.

It has not been the best of times for the markets this past week. The Toronto Stock Exchange saw its biggest one-day loss in almost three months this past Thursday, with red arrows carrying over to Friday.

From the fears mounting in China regarding their tighter monetary policy, the growing numbers of U.S. unemployment claims to U.S. President Barack Obama’s get-tough approach to banks, the markets have been reacting.

But there’s a darker secret hidden behind the headlines

Back on November 15, 2009, we released a report titled, “A New Standard in Silver.” In it, we featured a relatively unknown silver junior that was trading at $0.32.

The story went something like this…

After a well-deserved break, the markets are back and in full swing action.
We couldn’t be more excited…

For the last six months, we have been a big supporter of gold, silver and resource stocks. Since March, during the historical bottoming of the markets, we told our readers to follow the smart money and load up on resource plays…

On November 15, 2009, we announced a special feature report (click here for the report) on one of our favourite silver stocks, Silvermex Resources (TSX-V:SMR) when it was trading at CDN$0.32.

On Friday, they finally announced the closing of the Rosario Project acquisition.

Silvermex Resources (TSX-V: SMR) closed this Friday at CDN $0.45.

It’s great to see Silvermex (TSX-V:SMR) shares trading higher and building support. However, their news release couldn’t have come at a worst time as Gold and precious metals stocks fell sharply on Friday.

But as we looked deeper into their news release, something struck us.

More on that in a bit.

A few weeks ago, Société Générale, one of the oldest banks in France and the 3rd largest Corporate and Investment bank in the Eurozone, released a 68-page report entitled ‘Worst-Case Debt Scenario: Protecting Yourself Against Economic Collapse.”

In their report, they advised clients on how to prepare their portfolios in the case of a complete global economic collapse.

Hoping for the best, but preparing for the worst.

Under each category, they presented a bull and bear case for sector performance, highlighting the positives and negatives for each scenario.

What caught our attention in the report for specific sector performances was their view on Mining and Metals. In particular, Gold. Take a look.

With investors hurdling toward gold as our Government prints more money, I am reminded of a story that many gold enthusiasts may already know. It’s a story about a real life gold super hero whose deviance of conventional wisdom turned a failing corporation into one of the world’s largest gold producers.

Many of you who have been a part of Equedia Weekly for a long time will have already heard this story before. But with gold hitting yet another all time high and our many references to the Gold Super Hero in the past few weeks, its only fitting for us to revisit this incredible story one more time.

Sometimes things just can’t wait. This past week we caught wind of a news release that triggered an immediate interest from our staff signaling us to, once again, change our schedule for Equedia Weekly. But before we get into the details of our latest story, another news release caught our attention. The drilling has begun. Last week, we put out a very special edition on Trueclaim Exploration Inc. (TSX-V: TRM), our featured Gold company of this year. It looks like their management has begun to make their moves as they announced that diamond drilling has started on the 2,000 metre Phase 1 drill program on their Scadding Gold Property. The full interactive newsletter report on Trueclaim can be found by going to following this link: http://archive.constantcontact.com/fs005/1102243211822/archive/1102813044847.html Not only that, Trueclaim Exploration Inc. (TSX-V: TRM) has announced it has expanded its land holdings around their Scadding Gold Property by entering into an option agreement to acquire a 100% working interest in four mineral claims known as the Powerline Property located immediately south of the Scadding property. The Company completed this acquisition following detailed analysis by its geological team that felt that the structures within the Powerline property contained similarities with those found within the Scadding claims. Previous non-NI43-101-compliant analysis of surface samples on the Powerline property found anomalous gold values that strongly suggest further evaluation is required. You can read the full press release by following this link: http://equedia.com/blog/view.php/Drilling-Underway-on-Scadding-Gold-Project-and-Trueclaim-Exploration-Inc-Options-More-Adjacent-Mining-Claims At Equedia, our stance remains firm on the fact that precious metals are going through the roof. Last week, we gave you our featured gold company of the year and the reasons gold will continue its run. Gold sprinted to yet another all time high this past week. But now we want to bring you a story that requires immediate attention. You see, we love precious metal stocks. We love gold. But we also love silver…

There is a common misconception surrounding feasibility studies. We know they’re important but their significance is commonly misconstrued. Make one mistake or skip one step of the process and it can have detrimental effects on a mining project.

A mining feasibility study, in short, is an evaluation of a proposed mining project to determine if the mineral resource can be mined economically. But there are many stages of this process before the actual feasibility study or report is finalized.

First off, there are three main feasibility studies: the scoping study, preliminary feasibility and detailed feasibility…Read More

Mining resources has been the hottest sector during this market upturn. Last week, we talked about Ivanhoe Mines running from $2 per share to $13 and Teck Resources soaring from $3 per share to over $32, both in less than a year.

There’s no doubt that investors are flocking towards the mining sector, especially Canadians. Sixty percent of all public mining companies are listed on the Canadian public markets and about half of all mining capital is being raised in Canada.

With so much hype around this sector, how do investors know what to look for?

Investors should understand the process and costs involved in mining before they jump in and make a wrong investment by chasing the markets. When investing in miners, its much more fun and rewarding when you at least understand the basics.

This topic can very easily take up thousands of pages, hundreds of books, and years of schooling, but there are some basic fundamentals average investors can work with. For this week, let’s start with the basics.

The deal is done. In last week’s newsletter, we talked about the significance of October 6, 2009 – a date marking the final signing of an agreement that will begin the process of opening up one of the world’s largest undeveloped copper-gold resources.

Ivanhoe Mines and Rio Tinto has now officially signed with the Mongolian government to begin the Oyu Tolgoi copper-gold project, a project with a fully operational expected production of 450,000 tonnes of copper per year and 330,000 ounces of gold and an estimated resource with an astounding 45.2 million ounces of gold and 78.9 billion pounds of copper.

That’s not a misprint.

It’s no wonder why Ivanhoe’s share price is almost back to its two year high, climbing from its 52-week low of just over CDN$2, to this past Friday’s close of CDN$13 even.

Let’s put that into perspective.