Good morning from Vancouver, Canada! I have spent the last two days at the Vancouver Resource Investment Conference (VRIC 2020). My biggest takeaways from this conference have to be the strong attendance and the bull market "climate" among the attendees.
It's important to draw a distinction between bear market environments and bull market environments, as not all markets are the same. In bear markets investors are pessimistic and fearful of further losses which creates a climate of general risk aversion. Bull markets are the exact opposite; investors are seeking out risk and new investment opportunities.
VRIC 2020 felt decidedly like a bull market conference with investors actively seeking out new investment opportunities and even saying things like "announcing a financing in a bull market is a positive" - whereas, in bear markets companies that announce a financing are typically sold vigorously.
Should we be concerned about bullish sentiment among mining investors?
I don't think so. At least not yet. Bull markets are built on bullish sentiment and it's too early in the bull market move to try to start calling tops and guessing which sentiment extreme is "THE top". What you want to look for is extreme euphoria and a "nothing can go wrong" attitude among retail investors, then it would be time to get worried.
Additional highlights from VRIC 2020:
- It was standing room only at multiple company workshops. The common thread among the "popular" companies was recent news and a strong recent share price performance. Would we have expected anything else?
- Thom Calandra was too kind in making a point to introduce me and say some kind words at the beginning of his walking tour which kicked off with Banyan Gold (TSX-V:BYN). Banyan CEO Tara Christie was a natural in front of a considerable crowd which included many investors who were not Banyan shareholders yet. Banyan is working on a resource estimate for AurMac as well as continuing to interpret the latest batch of drill results. It feels to me like Banyan is really onto something special at its "Powerline Target" with grades increasing to the north. The goal will be to return to Powerline this summer and continue following the mineralization north.
- I had a really good chat with Argo Gold (CSE:ARQ) CEO Judy Baker who laid out her plan for 2020. This includes selling several properties (Abbie Lake, Macassa Creak, Mishi Lake) near Wesdome's Eagle River Gold Complex (the deal is almost done and Argo will receive a cash payment plus shares in a shell company), spinning off the company's cobalt/graphite assets into a new spinco, being laser focused on Argo's flagship Uchi Project. Judy is also working on a lead order for an upcoming financing (the name is impressive) and once this is finalized I expect a financing to be announced, and then closed relatively quickly. Argo has also brought on board a world class structural geologist named Ken Williamson who worked for Newmont for many years - I believe this is a key addition that should optimize the upcoming drill program at Uchi.
- Andrew Pollard was as confident as ever and Blackrock Gold (TSX-V:BRC) has a clear plan for its upcoming drill program at Silver Cloud. Carl Pescio (the man who staked Silver Cloud in 1999) talked about the sheer size potential at Silver Cloud and he is quite fond of the "northeast veins target" at Silver Cloud. Pollard expects the first tranche of the financing to be closed within a week with the rest of the money coming in shortly thereafter.
- Spences Bridge Gold Belt explorer Westhaven Ventures (TSX-V:WHN) indicated they are still waiting on assays from holes 41-49 from their 2019 drill campaign at the Shovelnose Project in southern BC, Canada. Westhaven would like to release an NR as soon as possible but they need more assays back in order to do so. Talked about drilling 35,000 meters in 2020 which will include 3,000-5,000 meters at Skoonka. Request for proposals from 9 different drillers and we can expect per meter drilling costs to drop in 2020. C$4.5 million in the treasury and expecting C$600,000-C$700,000 back in March from a tax credit from the government. Fully funded to drill to do what they’re setting out to do in 2020 and would only do a raise if they have exploration success which would warrant a 3rd or 4th drill to be added.
One final thought about VRIC 2020. I think it's time for some new faces to be introduced as thought leaders in the mining sector. How many conferences are we going to have where Brent Cook, Rick Rule, Peter Brown, and Ross Beaty are the keynote speakers and capture much of the attention? While I respect all of these men and I don't deny that they have delivered timeless contributions to the mining industry, it also feels stale to see the same exact faces (and many of the same stories and 'pearls of wisdom') time and time again. It would be nice to begin seeing younger faces, more women and people from different ethnic backgrounds. After all, mining is global and people of all shapes, sizes, and colors are involved in this industry in one capacity or another.
Disclosure: The author owns shares in all of the companies mentioned in this article and may choose to buy or sell at any time without notice.
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