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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: grusum who wrote (732)	4/26/2001 9:21:12 AM
From: russwinter	Respond to of 4051

As a Global Resources customer maybe you could get ahold of this report and post it here? Exploration companies may be worth a nibble again By: David McKay Posted: 04/26/2001 05:00:00 AM \| © Miningweb 1997-2001 MIAMI -- Mining exploration appears to be offering value again years after the Bre-X scandal, an event which wiped billions off the value of listed junior miners and damaged confidence in the sector. - Paul van Eeden, a senior broker for California-based Global Resource Investments, said exploration budgets in the junior-focused Canadian market increased 12 per cent last year partly owing to tax incentives enacted by the Canadian government. Van Eeden was speaking at the Investing in the Americas conference, held in Miami today (23 April). Potential changes in the atmosphere of the Canadian junior sector is well worth monitoring. It is the source of almost 60 per cent of all equity capital for global mineral exploration and as a country is among the largest recipients of exploration expenditures, attracting 15 per cent of total worldwide exploration budgets. Elsewhere the picture has been relatively grim with a 50 per cent decline in junior exploration spending over the last three years. According to the Metals Economics Group, worldwide non-ferrous exploration was $5.2 billion in 1997. But mineral exploration expenditures declined 29 per cent in 1998, 24 per cent in 1999 and another seven per cent in 2000. That brings total expenditure for exploration last year to only $2.6 billion. However, Van Eeden said the tide was turning for junior miners worldwide and, if properly managed, investment in junior mining could still work for punters. Buying exploration stocks requires patience, knowledge and an ability to be contrarian, according to Van Eeden. "You have to buy stocks when no one else is buying them. "Right now appears to be an excellent time to accumulate exploration stocks. There are many high quality companies doing extremely good work out there and no one cares," Van Eeden said. Reviewing management's technical knowledge, the company's capital base and the quality of the asset are key indicators in assessing the worth of an exploration stock, he said. "Currently the resource sector appears to be recovering from a brutal bear market and many excellent opportunities are available to astute investors," he said. Van Eeden's paper provides further support to the growing notion at the PDAC conference earlier this year that juniors with the best financial support were worth watching. Juniors in joint venture with major mining companies such as Billiton [LSE:BLT] (it has more than 25 joint ventures with junior miners underway) were most likely to succeed. That's because management's attention is on developing the orebody rather than fretting over the balance sheet. However, a renaissance in junior mining has to be balanced against the risks associated with the current macro-economic picture. A downturn in the key US economy could lead to recession in commodity markets – a factor which will make life difficult except for those companies with robust balance sheets and spread of different assets.