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Strong positive sentiment apparent in mine financing

By Gregory Reynolds, Mining Life

Oct 30, 2017

Raising funds for mine hunting is much easier today than it was not so long ago.

While Toronto and Vancouver remain the main sources of new money, Europe, and especially such countries as England and Sweden, have changed their view of the mineral industry.

While the Chinese elephant in the tent cannot be ignored, other factors, especially in those nations committed to infrastructure improvements that will generate progressive economic development, are becoming more important.

Job creation has become the number one ambition in most Western nations. They have swung to the viewpoint that putting money in the pockets of consumers is the way to real prosperity. Resource dependent nations such as Canada must sell their products in order to create a stable economic environment.

Being a major gold producer, this nation benefits from a single fact that underlays world markets – demand for gold exceeds supply.

This has been true for many years but the turmoil in international currency markets and a rising tide of political uncertainty has caused the average person in Europe, India and even China to turn to the centuries-long tradition of using gold as a security blanket.

One result is already apparent in Northern Ontario, a mini gold rush in and around the Hemlo Gold Camp. Staking in 1979 led to the development of three massive mines, the Golden Giant, the David Bell and the Williams.

In the last few months juniors such as Canadian Ore Bodies, Sunvest Minerals, Golden Peak Minerals and Melkior Resources have joined Harte Gold Corp in giving Hemlo a long second period of investigation.

Gold traders have been acquiring large positions in gold because they expect the rally that began in 2016 will continue, with the usual bumps, into 2018.

Ontario, and especially Northern Ontario, remains a favorite hunting ground for new mines and the historic silver-cobalt mining camp in and near the Town of Cobalt has also been enjoying

a mini-mining rush.

The mineral cobalt has become highly desirable, sparked by new demands and higher prices.

Six of the cobalt-seeking juniors now active in that area are CobalTech, LiCo Energy, Cobalt Power, Castle Silver, Cruz Cobalt and Brixton Metals.

These two new mining rushes are

covered in the 2017 Summer Edition of Mining Life and Exploration News, published by Canadian Trade-Ex, mining’s premier reporter of activities and organizer of trade shows. As well, the flood of discoveries and changes in the Golden Triangle created by the mining camps of Timmins, Matheson and Kirkland Lake will be covered.

Among other good news, the long slump in base metal prices has ended. The outlook for most base metals also remains positive as the optimism seen at the end of 2016 will persist through most of 2017.

Following a strong rebound in Q4 2016, prices for industrial metals are expected to continue rising strongly this year. Experts see higher prices for copper, lead, nickel and zinc; that will compensate for subdued prices of aluminium and declining prices of iron ore and tin.

Optimism in the base metal sector is the result of a tightening in most markets, especially those facing imminent resource constraints.

The news spotlight is always on new discoveries and new mining areas, the truth is that the long established mining camps remain fertile grounds. Using new technology, new theories, advanced equipment and new examinations of old documents and drill results, juniors and seniors are making new finds in areas considered depleted.

In fact, “Going Deep” is the new motto when it comes to considering workings in long thought mined out areas. Also, the wise miner looks beyond the political uproars occurring almost daily south of the border and problems in Europe and recognizes that uncertainty in politics is often gold’s best friend.

One gold analyst says that U.S. President Donald Trump’s bullying and threatening style of government will be good for gold in the long run.

In an interview with Kitco News, Martin Murenbeeld of Murenbeeld & Co said that in the current environment with rising geopolitical risk he expects gold prices to rise to $1,300 within the year and wouldn’t be surprised if prices rose to $1,400 an ounce.

In his gold report, Murenbeeld used the U.S. trade deficit of as an example of how Trump’s policies will be good for gold. The president often presents the trade deficit as an example of a faltering economy and how the government over the years has made poor trade details.

However, Murenbeeld explained that the trade deficit isn’t exactly as black and white as Trump presents the issue. He explained that the U.S. Trade deficit provided countries with an excess of U.S. dollars, which in turn have been used to buy U.S. treasuries. If the U.S. tries to increase its exports by devaluing its currency then the administration risks sparking a currency war.

Either scenario would be positive for gold, he said.