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MiningInsights™
Global Mining Research
We have four principal
tools that we use to determine where your after-tax investment dollars are best
spent.
MiningInsights™
Global Mining Index
Our Global Mining
Index identifies investment trends in metals equities as they happen and tracks
investment in the biggest metals companies on a commodity and market basis.
Here is a recent
view. You can see the big base metal boom where we've enjoyed the wild ride
on global copper and nickel stocks. We nailed the start of the run in research
published in October 2002 and found some great investment candidates that would
benefit most from it in a low-risk sense.
Look at the blue
line for the Diversified sector. See how it turns up in the last couple of months?
This sector produces the iron ore used in steel production. When investors are
paying attention to iron ore, it bodes well for underlying industrial production
economic growth. A core position in Brazil's CVRD was the perfect investment
for the times.
As a result, continue
to watch the nickel, copper, and lead/zinc markets closely because underlying
demand coupled with either lack of supply (nickel, zinc) or supply disruptions
(copper) suggests overweighting base metal exposure in your portfolio.
MiningInsights™
Global Industry Comparative Analysis
How much are YOU
paying for gold equities? This chart shows you - 'inexpensive' is at the top.
MI Research Partner Gryphon Gold Corporation is the world's cheapest equity,
and Glamis Gold Corporation is the world's most expensive equity to own. This
chart also showed you that the Goldcorp/Wheaton River merger was a win/win for
both companies. And that the other merger was naught more than a carefully disguised
Goldcorp asset strip!.
This is a great
first step in determining undervalued equities, but 'cheap' does not mean 'risk-free'.
The next analytical step determines if unrealized value exists in the 'cheap'
stock, and incorporate finances and management. The result? Gryphon Gold is
still the best value gold equity worldwide and shareholders who have purchased
this company are likely to make a killing.
MiningInsights™
Investment Leverage Analysis
This is a neat way
to determine the investment risk you face in buying a stock once the underlying
commodity risk has been removed. Let's not get too deep into portfolio theory,
but if "Markowitz" and "Martingale" are known to you, then
this analysis should be especially useful to you (to Private Clients certainly,
because they run large diversified portfolios and enjoy portfolio risk debates).
Here's an example.
The solid line is the gold price over the coverage period. The wavy line is
the premium/discount you pay to hold Agnico stock over what you'd expect from
a gold equity. Returns to January 2003 is what you'd expect with a rising and
falling gold price.
Since then, a systematic
breakdown in valuations mimics a trend across the gold equity industry. This
is the proof that underweighting gold stocks would have been a good strategy.
Take Agnico-Eagle - it is an excellent unhedged gold & base metals producer
with a great mine and wonderful ethical, honest management (CEO Mr. Sean Boyd
has an excellent sense of humour and just try to keep up with COO Mr. Ebe Scherkus
P.Eng. underground...). Worse yet, it was symptomatic of the industry in early
2005...
You'll find a report
in More Sample Research highlighting leverage
valuations of the global gold industry from a couple of years ago.
MiningInsights™
Investment Risk Analysis
When you subsribe,
we'll talk about your investment holdings. If you like, we'll put them into
the MI Mining Investment Risk portfolio, sorted by risk profile. The most risky
equities are in 'Early Exploration'; the least risky are 'Producers'. 'Advanced
Exploration' stocks give more stable returns in a steadily increasing profile,
and 'Feasibility' stocks capture the least amount of investor attention. Accordingly,
they frequently show acceptable risk profiles for the production glory that
is assured in the short - medium term of your investment.
This portfolio
analysis is set up as the benchmark of mining equity benchmarks. Notice the
TSE Gold Subindex? If you invest in Canadian precious metals mutual funds, this
is your benchmark. If you invest for yourself, the whole chart is your benchmark.
MiningInsights™
Investment Conclusions
Investors in 17
countries have concluded a subscription to MiningInsights™ has been worthwhile
to their portfolios. Would it be worthwhile to yours?
If this interests
you, call me for information on the Research Letter or Private Client services!
If not, thanks
for stopping by!
Jim Steel MBA P.Geo.
Managing Director
Mining Insights Inc.
1 416 236 9297
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