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Gold/Mining/Energy : Major Drilling Grp Intl Inc

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To: Herb Duncan who started this subject	11/14/2003 7:46:07 AM
From: Herb Duncan	Read Replies (1) of 6

MDI will definately benefit from - Exploration Budgets Increased Already this year worldwide exploration budgets are up 26% after five years of consecutive declines. Much of this money is going into junior mining and exploration companies. That is where the big payoff is going to be in this new bull market. The shares of junior mining companies are up 100-200% this year as a group with some companies up as much as 2,300%. Junior mining and exploration companies have been doing the lion's shares of exploration over the last few years. However, the major mining companies are increasing their budgets, recognizing the dearth of new projects moving into the pipeline. Newmont Mining recently raised $1 billion in new equity to pay down debt and finance future acquisitions. The company is going to have to find and replace nearly 8 million ounces of production each year, which isn’t easy. One way to replace those reserves is through acquisitions. Canada Leads Mining experts believe this year’s increase in exploration budgets from $1.73 billion to $2.19 billion reflects the slowdown in industry consolidation. From 2000-2002 a number of mining companies disappeared through mergers and acquisitions. This absorbed a major portion of exploration budgets. Junior mining budgets are also rising by as much as 25% this year over last year reflecting higher bullion prices and improving investor sentiment. Most of the improvement in investor sentiment is coming from Canada as a result of the flow-through of tax rebates to investors for funds raised for domestic exploration. Canada’s share of exploration reflects almost 50% of this year’s exploration budget. Global and Canadian exploration budgets are expected to increase next year at a high rate and remain high for at least the next two years as the price of gold, silver, copper and nickel remain buoyant. Higher prices are attracting new investment dollars as mining companies sense that a new bull market has begun for precious and base metals that has years to run. Even if exploration budgets prove to be fruitful, it will be 5-7 years before much of that new supply comes on board. In the meantime, demand for both categories of metals continues to grow at an accelerating rate driven by demand from the developing world, especially China and currency debasement which has yet to run its course. The U.S. dollar could eventually fall to as low as 80 on the charts and even lower if budget deficits and trade deficits don’t improve.

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