Further notes from the Toronto Resource & Energy Investment Conference
Day2, Monday, April 20, 1998
8:30 a.m.PANEL: Oil & Gas - missed this
9:30 a.m.Jay Taylor/Hard Money Advisor
- distribution of income a problem in Asia and Japan
- most likely good times here in NA will continue
- gold? Still a good Investment
- relies on Frank Venerosa for advisement on gold
- says Franks view is gold to $385 this year, if no more CB selling, and believes equilibrium price of gold is $600 (wouldn't we all like to see that)
- says Belgians, Dutch, Asians, Ausies dumped on the market
- reviewed some stocks, International Freegold, Laramide, Llyon Lake, Thermotech
10.00 a.m.EXHIBIT HALL BREAK
11:00 a.m.Pierre Lassonde: Euro-Nevada & Franco-Nevada Mining Corp
- excellent talk on GOLD, where it may be in the next few months
- 2 mos ago, Bay Sts largest accounts were asking about scenario for mines if gold at $200
- just in last couple of weeks asking same question if gold at $340, so Bay St mildly bullish
- since gold has returned from $278 to 307, feeling is it has bottomed and now gone through 200 day moving ave
- fundamentals for the next 12-18 mos are much better
- reason gold tanked was CB sold enormous amounts of gold and also lent to the industry some 4000-6000 tones (equivalent to 130-200 m oz)
- lent it to producers, who do short selling, hedgers who can make money out of this borrowed gold, because it pays to short gold
- problem is it was not very clever for the CB's to lend gold at 1-2%, drive the price of gold down and loose more on the price decline than they made on leasing the gold
- the World Gold Council (of which Pierre is a member) are trying to educate the CBs not to continue to lend gold, and think they are making progress, since Belgium sold to other banks
- CBs own 15,000 tons of gold worth $120 billion, by lending gold price dropped and they depreciated their asset by 25%
- EMU should help since all sales will have to go through and be approved by the executive, controlled by France and Germany both of which favour holding more gold
- on the demand side, jewellery business vibrant, and even in the Asian countries gold once again proved its worth since those that put their money in gold didn't loose 60%
- so gold has bottomed, should see $330-340 by fall
- from Davos mtg, 1 imp fact was that the 11 countries haven't been able to create jobs, whereas the US is booming
- EMU will be a weak currency from day 1, and if EMU is weak, gold will be the only alternative, so predicts they will hold 20%+/- 5% in gold
- for your own portfolio think about bottom-fishing good quality stocks, must have good management and good ore body
- says Euro-Nevada and Franco-Nevado will do fine, just taken on some more royalties, Ken Snyder 1.5M oz will mine at $80, and with the silver, the gold is free, don't hedge in either company, but even with the gold price down earnings are good
- suggested people have a look at Stillwater platinum and palladium, Metallica jv with Cyprus Amax, Virginia Gold good projects in Quebec, Cumberlands iron formation gold projects
- lots of questions, mgmt owns 15% of EN & FN, so watch the books carefully
- jv with QMI, hope to find something in premier location in N Ont
.11:30 a.m.PANEL: Hot Spots
John Kaiser, Eric Coffin, David Mayerlen, Chris Bunka, Peter Grandich
- SVB, now needs drilling results to support market cap
- WTC, needs another junior to hit
- ADP, needs more diamondiferous pipes, and grades on the bulk samples, or some other junior to hit, DeBeers in to check out root of NS trend
- with some of the companies like KRY, you are betting on the outcome of the court decision, rather than the ore body, pretty tricky
- each panel member picked a stock they thought would do 100%, Ridell, Unitech, Highwood, Pallaum were the picks
12:00 p.m.EXHIBIT HALL BREAK
1:00 p.m.Adrian Day/Global Strategic Management
- missed this
1:30 p.m.Ian McAvity/Deliberations
- didn't get all of this talk
- last rally was short covering, not new buyers, but still OK
- gold is in a digesting period
- don't want to see a retreat to 79, looking for a break now above 91 on the XAU
- bullish on silver
2:00 p.m.James Dines/The Dines Letter
- same as first day
3:30 p.m.Peter Rehmer/Elliott Wave
- missed, not applicable to junior stocks in my opinion, but could be applied to indexes, such as XAU
That's it for me, anyone else? Please feel free to add whatever. |
