Another gold camp page... my third... offering a complete listing of the companies, providing a place for posting related news items addressing companies and developments in the camp, and for chatting about them, while focused on sorting out the best values and greatest potentials in the range from established producers to junior exploration companies seeking to find "the big one" in British Columbia's Golden Triangle region.
Unlike the opportunity in Newfoundland, in "a new gold camp," BC's better known Golden Triangle has been around since well before the last gold bull market peaked in 2011. In a direct comparison, it fares poorly relative to opportunities found in Newfoundland, in terms of the known elements that make development of new mines worthwhile, and more profitable than competitors: Newfoundland has well a developed infrastructure, roads, power lines, and ports, with population centers ensuring a motivated work force near to hand, and a climate that enables accessing and working on properties year round. Northern B.C. mines, instead, have suffered decades long delays, as B.C. has been slow to enable roads and power lines reaching into its more remote corners. A decade after the last bull market in gold, some progress has been made... but, the distances involved still make simply accessing properties and getting power to them a real challenge. Much of the exploration work is done by moving people and equipment around by helicopter. Where there are no roads, the exploration camps and mines are supported by air, which is hugely expensive. In B.C., the steep terrain makes the work difficult and harsh winters limit the work to a short season of a couple of months in mid to late summer. The impact is that exploration in northern B.C. is difficult and expensive, and with success, there's no easy path to overcoming those imitations in developing and operating a mine. Building roads and running power lines can take a long time, and it invariably costs a lot... but, once others have spent the time, done the work, and have already paid the cost to build the roads and string the power lines... it gets easier.
There are also reasons that in spite of the enormous cost and difficulty miners efforts have been sustained since the last bull market... because successes in the Golden Triangle can be bigger than the challenges.
And, there's a "frogs in the pot quality" to the camp... As progress made in overcoming the obstacles has been slow and incremental... drawn out over decades... investors attention has proven easily drawn elsewhere. But, over time, an accumulation in the progress made begins to lower the barriers... Tipping point considerations might soon apply... even without investors anticipating it, or having their focus being impacted all that much... yet. Not only the case that the physical barriers are slowly being overcome, the quality in effort applied in exploration has improved over time, too. Progress in better understanding the geology... has led to an acceleration in "finding" versus "looking".
Northern B.C. is, and is likely to remain, a high cost jurisdiction compared to others... but, in comparing it to others... there are few other places left that have the same potential concentration of undiscovered "elephants" waiting to be found... and, none of the others are in as "safe" a mining jurisdiction as is found in Canada. Geopolitical risks also impose costs, and a resurgent global risk profile now, might soon balance out the cost of physical inconveniences.
The combination of factors... also likely means that BCGT companies, still at the tail end of a long bear market in mining shares... are being more deeply discounted today than competitors, for both practical and historical reasons. Legacy issues that held the BCGT back in the last cycle, are less of an issue now, and are likely to become less of an issue, faster, in any "new commodities super cycle". That change coming in the markets. perhaps, will give investors in mining stocks, today, the potential for ten years or more of good luck following in the wake of the long running decade plus bear market in mining shares... that appears now to be nearing an end... even if without bringing an end to the challenges the industry faces.
While markets for mining shares are declining... leverage still works it magic... and people look away. But, when markets reverse prior trends... penny stocks can become future industry leaders... based on one major success. Nowhere else, today, are the odds of a major new exploration success higher... |
