PDAC 2019 – The Best One Yet.
So, what did I think of the Prospectors & Developers Association of Canada (PDAC) or #PDAC2019 — the world’s premier annual mineral exploration and mining convention, this year? It’s easy, #PDAC2019 was the best one I have attended since I started attending over a decade ago. The audience streamed endlessly with #PDAC2019 hosting 25,843 attendees from more than 130 countries, InvestorIntel participated as a media sponsor and we stopped short of a 10 out of 10 (Rating: 9-10) simply because there was too much to do and too many people to meet in too little of time!
Focused on encouraging the new millennial investor that has prospered from cannabis sectors to diversify into the resource industry that has arguably been a core investment strategy for many listed in the Canadian and Australian markets for many decades, we invested this morning in some finding out how big is the resource sector (really) in the Canadian and Australian capital markets?
The ASX (Source: https://www.asx.com.au/prices/company-information.htm) currently has 2232 total listings and 695 resource companies. In other word 31% of the ASX market as of this morning are resource companies.
The Canadian Securities Exchange or the CSE? Well we would like to start by thanking the CSE for allowing us to be a media sponsor at their PDAC luncheon, which was wall-to-wall with investors. Some people have the misguided idea that the CSE is all cannabis stocks (Source: https://www.thecse.com/en/listings) but in our review of their 489 total listings, 143 are resource plays; which means that 29% of the CSE listed companies are resource companies.
Then of course there is the TSX, which lists 218 mining companies and the TSX Venture reported which lists 1087 mining companies (Source: https://www.tmxmoney.com/en/research/mining.html).
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The point? Enjoy the cannabis upticks, but at the end of the day, you may sleep better knowing your portfolio stands to gain from the inevitable battery material demand or the pleasure should the Australian gold bull market hop the pond and make it to Canada this year?
In doing over 3 dozen plus interviews with #PDAC2019 CEOs that ranged from gold to rare earths to lithium and scandium and back, here are the top themes we identified from this year’s #PDAC2019…
- Palladium is the hottest metal to watch. Record highs for palladium prices and increased demand, equals a win-win for any investor. Reviewing online news headlines for palladium, apparently there is an increase in incidents regarding thieves stealing catalytic converters from U-Haul’s and cars to recycle this metal for resale? Some saying that palladium is “more valuable than gold”, one might possibly ascertain that platinum and rhodium should be on the rise next?
- Technology + Metals =’s better odds for investors. The companies we interviewed that had stock performance last year cited a technology component in addition to a resource story as their competitive advantage. It also seemed clear that the more complex the technology was, the more appealing it was for the savvy investor. So while understanding how “the cost-effective production of nanostructured cathode materials can address pent-up global demand for better batteries” may not appeal to those that failed science in high school, if you want a diversified portfolio of solid performers — and appreciate the unrequited love relationship of electric vehicle demands versus the supply issues relating to materials needed to make these automobiles….not to mentioned how many of the battery materials are controlled by China…then you will undoubtedly appreciate the next theme —
- Sustainability. Rare earths are back. I don’t care what the experts tell me, our site is being inundated with interest from the ‘old gang’ that made a fortune in the 2009-2010 lift when people put together that one plus two makes three. Still with China controlling 90% of the rare earths on the planet and with Trump’s relationship with China and everyone else in-between so ‘unpredictable’, looking to Australia and North America for other sources is critical for any investor with critical material knowledge.
- Critical Material Hunger. Ok, so now that we have lobbed out the ‘critical materials’ term, please note that these are resources that a nation is short of supply production and is presently relying on others for. So, for instance, did you know that there is a global shortage of uranium? What does that mean? If you are dependent on nuclear energy and like this cleantech source of energy for our planet, then appreciating that we should be developing these resources on our own soil would be smart?
- Political Correctness Zest. Companies that could tout social justice angles such as the ones that are securing cobalt in conflict free mineral zones were also getting attention at #PDAC2019. Did you know that there is a micro amount of cobalt in your handheld phone? Probably aware of the supply shortage issues, much of it comes from the Democratic Republic of the Congo and well, in spite of hard work through blockchain technologies to reassure us that sources are not mined through child labor, there is a wave of investors seeking to remedy social injustices through their investment dollar — and these stories held a strong presence on the #PDAC2019 floor this year.
- Cleantech is the middle name of the new millennial investor. The companies that were able to use cleantech in their mission statement were —- using it frequently. Relieved that the ‘disruptive’ term has been on a reduction as of late, companies that are doing anything good for the planet were touting the advantages for making our world a better place, and there is no question that the market is listening and responding well to this theme!
- Global market interest. In the ‘old days’ investors seemed quite picky on where their stock was listed. I recall the days when someone would say to me “sorry, we only invest in TSX listed stories”. Today? They did not care if it is ASX or CSE or TSX Venture, what the investors speaking to us asked was “what’s the story?” Investors today want a good business strategy, they want competitive management teams and impressive Boards. And that brings me to the next point…
- Competition is ferocious for investor interest. Having worked with over 500+ publicly listed companies over the last 18 years, in my humble opinion, I have never seen more excellent under-valued publicly listed companies available for those of us willing to invest their hard-earned pennies in the resource public markets. With the market littered with opportunity, young millennials who made record scores in cannabis and blockchain last year, have the world at their feet…
- Gold. The gold bugs were everywhere at #PDAC2019 and with the Australian gold market rush this last year, there were Aussies everywhere checking out what one could argue are some ‘damn good gold buys’ with market valuations that are so low they are becoming a repellant instead of what they really are: the best deal of the century? (Disclaimer: I am not a licensed investment advisor and am not making buy recommendations.)
- Technology Metals. Copper and silver were there and while copper has held its fortitude, once can never discount the value of the #1 technology metal, which is silver. Perhaps, you our InvestorIntel audience can tell us — when will silver get the respect it deserves?
For the record, I am not a licensed investment advisor and the above is not intended to be investing advice, but simply an opinion piece on the feedback we received from participating at #PDAC2019 as media sponsors.
Tracy Weslosky is the CEO for InvestorIntel Corp. and founder of InvestorIntel.com, a trusted source of online market information for investors in the capital markets, ... <Read more about Tracy Weslosky>