As a general rule, the most successful man in life is the man who has the best information

Vancouver BC is undoubtedly one of the greatest mining centers in the world and British Columbia should be a mining powerhouse, consider:

• Excellent geology
• Good transportation system
• Competitive tax rates
• Strategic location with respect to Asian markets. Two modern ports, Vancouver – Canada’s largest and the Port of Prince Rupert which is the closest of any of North America’s West Coast ports to Asia – up to 58 hours of sailing time shorter
• High quality and easily accessible geological data
• Mining friendly provincial government
• Communities receptive to resource extraction as a livelihood
• Attractive exploration incentives
• BC is the third largest generator of hydro electricity in Canada – one of the lowest power costs in North America. Natural gas is plentiful, cheap and resources are growing
• Some of the most modern education and telecommunications infrastructure in the world

Many of the world’s largest mining companies used to have a strong presence in British Columbia – they left in the 1970’s after the political landscape changed. In the wake of the electoral collapse of the New Democratic Party (NDP) the Gordon Campbell led Liberals won an overwhelming majority in the 2001 provincial election. Since then the Liberal government has been trying to remake B.C. into an investable and attractive place for the mining industry to do business again. Are they succeeding?

Mining Facts from the Mining Association of B.C. (MABC)

• Gross mining revenues for the BC mining industry were $9.2 billion in 2012
• In 2012, the BC mining industry made total payments to the government and government agencies of $504 million
• British Columbia’s mining industry pre-tax net earnings for 2012 was $1.8 billion
• Hiring requirements for all mining sectors in BC, over the next 10 years, are projected to be 16,770 workers under a baseline scenario
• The number of people working in BC’s mining industry in 2012 increased to 10,419 up from 9,310 in 2011
• Average employee earnings rose to $98,200 in 2012, up from $93,900 in 2011
• Capital expenditures fell to $2.7 billion in 2012 from $2.9 billion in 2011
• Vancouver is the world’s leading centre of expertise for mineral exploration.
• Some 1,200 exploration companies are located in British Columbia, most in the greater Vancouver area
• Exploration and development expenditures by survey participants, was $680 million in 2012 compared with $463 million in 2011
• Lead and lead concentrate revenue totalled $194 million in 2012
• Shipments of metallurgical coal rose to 24.2 million tonnes in 2012
• Coal accounts for 39% of the total volume handled at the Port of Vancouver, which moves shipments to China, Japan and other Asian markets
• Metallurgical coal continued to dominate BC’s mining sector in 2012, representing 44% of revenues, followed by copper concentrates at 19%, silver at 10%, zinc and zinc concentrates at 9% and gold at 4%
• Copper concentrate revenue rose to $1.5 billion in 2012 and copper shipments rose to 787,000 tonnes
• Gold: net mining revenues rose significantly in 2012 to $275 million, up from $154 million in 2011
• Molybdenum: net mining revenues in 2012 were $248 million
• Total mining expenditures rose to $9.2 billion in 2012. Mining companies spent more on items such as production materials and supplies, energy and fuels, outward transportation, and machinery, equipment and construction materials
• Zinc and zinc concentrates revenue in 2012 fell slightly to $685 million from $693 million in 2011
• Silver: net mining revenue for 2012 was $760 million
• Cash flow from BC operations in 2012 was $2,230 million

In November of 2010, with a dismal popularity rating as low as nine percent, Premier Campbell announced his resignation. On February 26, 2011, Christy Clark was elected as the party’s new leader and became the 35th Premier of British Columbia.

In September of 2011 Clark introduced  her jobs plan, “Clark’s $300-million jobs plan, which she introduced last week after a province wide tour, includes promises of eight new B.C. mines by 2015 and nine upgrades to existing mining operations.

She didn’t name any of the new mines, but spoke glowingly of the economic rewards and family-supporting jobs mines bring to B.C. communities, citing the recently reopened Copper Mountain copper mine at Princeton in the B.C. Interior.

“We need more Princetons,” said Clark about the mine that now employs 10 per cent of the community’s workers.” CBC, Mining industry sees gold with Premier Clark’s plan

Clark is on record promising her jobs plan will return $1.6-billion per year of additional revenue for the government and provide 1,800 new jobs.

Below is a 24 month mining update report published in September 2013 by the Liberals.

Two new mines are operating:

• New Afton Mine, near Kamloops
• Mt Milligan Mine, near Prince George

Five more are under construction or permitted:

• Red Chris Mine, near Dease Lake
• Roman Mine, near Tumbler Ridge
• Quintette Mine, near Tumbler Ridge
• Bonanza Ledge Mine, near Barkerville
• Treasure Mountain Mine, near Hope

Major expansions have been approved for six existing mines:

• Highland Valley Mine, near Ashcroft
• Huckleberry Mine, near Houston
• Quinsam Mine, near Campbell River
• Elkview Mine, near Sparwood
• Endako Mine, near Fraser Lake
• Gibraltar Mine, near Williams Lake

The Notice of Work backlog has been reduced by 80 per cent and the Notice of Work application average turnaround time has been reduced from 110 days to 63 days.

In 2012, more than 30,000 people were working in B.C.’s mining, mineral exploration, and related sectors, more than double the number working in 2001.

The production value of mining in 2001 was $2.8 billion. In 2012, it was $8.3 billion.

Mining is big business

Teck Resources Ltd. (Canada’s largest diversified miner) and Teck Highland Valley Copper Corp. (in which Tech Resources holds a 97.5 percent interest) gave $222,400 to the Liberals – just $62,500 to the NDP.

Teck Resources operates the first six largest (out of the ten largest) mines in B.C.:

• Fording River in Elkford – coal, 2012 revenue $1.45b
• Elkview in Sparwood – coal, 2012 revenue $1.05b
• Highland Valley Copper – copper &  moly, 2012 revenue $1.01b
• Greenhills in Elkford –  coal, 2012 revenue $845mm
• Line Creek in Soarwood – coal, revenue in 2012 $566mm
• Coal Mtn. – coal, revenue in 2012 was $436mm

Teck was number two on the BCBusiness 100 Biggest Companies in 2013 by Revenue. Out of the top ten revenue producing mines in B.C. eight are coal mines.

Business Vancouver has published a list of the biggest mining companies in B.C. in 2012, the list may be accessed here.

“The mining industry is a cornerstone of our provincial economy.” former BC Premier Gordon Campbell

As you can see from the above graphs exploration spending under a Liberal government has exploded from a not so awe inspiring $29.1mm in 2001 under the NDP to an estimated plus $650mm in 2013. Well over two billion dollars worth of exploration (expenditures include exploration and deposit appraisal) have been spent in the province of British Columbia just over the last three years!

Sixty per cent of Canadian exploration companies are based in BC, and 69 per cent of TSX and TSX-V stock exchange listed companies based in BC are involved in the mineral exploration and mining sector.

Junior v Senior

It’s a fact in the mining world that most discoveries are made by junior mining companies and old time individual prospectors. Juniors, not majors, own the worlds future mines and juniors are the ones most adept at finding these future mines. They already own, and find more of, what the world’s larger mining companies need to replace reserves and grow their asset base.

Why are the juniors so successful at making discoveries and finding mines? Well, the good ones are lean mean boots on the ground exploration and development companies run by people who have been out there and know what it takes. They know how to raise money from the suits and they know how to get the story out to the retail investor.

They are not tied up in bureaucratic red tape and can make the important decisions without commissioning a six month study or running it up through 12 layers of pencil pushers and then sitting on their butts waiting for an answer while somebody else scoops the prize. They can and do make up their minds very quickly and can execute immediately on plans.

Old time prospectors are independent minded, bush savvy and, geologically speaking, very knowledgeable. Unfortunately for them they lack the wherewithal to advance their discovery and most often option their property, or project if you will, to a junior they hope will raise money and develop it to the point where a more senior company wants to get involved, or perhaps take it over outright.

It’s hard to invest in a prospector, fortunately if you want to invest in a potential discovery or the building of something of value – be in on the discovery of a mineral deposit and be there as the company moves it down the development path towards a mine there are quality junior companies, both private and public, to choose from. There are enormous opportunities to back excellent management teams with your investment money.

Conclusion

A junior resource companies place in the food chain is to explore for, find and develop, to a certain point, the world’s future mines and nowhere are juniors more important to mining then right here in British Columbia, a vast and under explored treasure trove of minerals.

B.C.’s Liberals say they are committed to opening up the province to free enterprise and that they realize that the exploration for and development of natural resources is a cornerstone of the provincial economy. The terrific rise in exploration dollars being spent in the province says to me many believe what they are saying and trust them to keep their word.

There’s no doubt mining brings a great deal of revenue to the province, but let’s remember one important point – juniors find the deposits and prove them up to the point where a major would step in and buy them. Consider another point – when was the last time you heard of a major mining company making a discovery?

Today the relationship between juniors and majors is so inextricably linked that it’s doubtful a major mining company could replace its mined reserves, let alone grow them, without keeping a close eye on junior’s activities and a check book handy.

Perhaps the importance of junior resource companies in the exploration and mine development food chain should be on all our radar screens but especially so for our dear liberal leaders. Are they on yours?

If not, they should be.

Richard (Rick) Mills

Richard is the owner of Aheadoftheherd.com and invests in the junior resource/bio-tech sectors. His articles have been published on over 400 websites, including:

WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks and the Association of Mining Analysts.

If you’re interested in learning more about the junior resource and bio-med sectors, and quality individual company’s within these sectors, please come and visit us at www.aheadoftheherd.com

If you are interested in advertising on Richard’s site please contact him for more information, rick@aheadoftheherd.com

***

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.

Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Jim Rogers: US is exceptional…it’s largest debt nation in the world!

There may be progress in US over the government shutdown and debt ceiling, but it’s not all good. The deal being talked about now wouldn’t resolve the crisis – but rather kick the can down the road setting the scene for another budget showdown early next year. For more on this RT talks to investor Jim Rogers, author of ‘Street Smarts – Adventures on the Road and in the Markets’. 

…more from Peter Grandich Oct 17th: 

From The Desk of Peter Grandich

Isn’t it nice of Goldman Sachs… oops, sorry, the gold manipulators to throw us a bone this morning-lol

All kidding aside, and knowing the manipulators are still out there waiting in the weeds, I do think the sell-off in the terminally ill dollar makes sense. How could anyone in their right mind want to hold the currency of a country that just witnessed politics at its worse and is in grave economic and social danger to boot?

After witnessing what took place in D.C., this American knows it’s just a warm-up for what’ s to come. Years of kicking the can down the road are ending as the can barely was able to be pushed a little this time around. Whether there’s one or even two postponements of the inevitable doesn’t matter as the Fat Lady may not have sung, but she’s standing up and clearing her voice.

Also from Peter:

Houston We’ve a Problem

Pass The Humble Pie

From The Desk of Peter Grandich

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Sometimes the most attractive energy assets aren’t found in the ground. Rather, at times like today, they are listed on the stock exchange.

Billionaire businessman Carl Icahn is one investor seeing value in energy companies. The hedge fund manager recently announced his purchase of 60 million shares in the Canadian oil and gas producer, Talisman Energy. Icahn has built up a nearly 6% stake in the Calgary-based energy producer, worth a whopping $300 million. Even though the company has been a perennial underperformer, after Icahn’s tweet, the stock climbed to the highest level in more than a year.

According to Forbes, analysts figure if Icahn and the CEO can successfully turn the company around, “The gain on the legendary raider’s 6% could be more than $500 million.”

I believe this “raider’s” deal represents one of the many potentially lucrative energy plays that savvy investors are getting excited about. Whereas last summer, Chinese companies werescooping up valuable resource assets, now a different phenomenon is taking place.

For example, I recently talked to Martin Soong on CNBC Asia about Petrominerales being purchased for about $900 million in cash by Bogota-based major oil producer Pacific Rubiales. Petrominerales’ stock popped an incredible 42% on Sept. 27 before trading on the stock was halted.

….read page 2 HERE

“Make sure you’ve already locked in shares of your favorite rig operators”

The Great Shortage Of 2014

Ah, as the world turns… 

…Russia upstages the president in a recent op-ed regarding Syria. 

…The Middle East remains a pressure cooker, on high heat. 

…The political “kids” at the U.S. capitol continue squabbling. 

…More recently, China ratchets up its “de-Americanize the world” rhetoric . 

Say what you will, the daily news beat has been giving us a lot to read lately. Besides your added reading, though, there’s an opportunity brewing that’ll right America’s ship, no matter what happens in the news bytes above. Let’s have a look…

Russia hates us. The Middle East is slowly forgetting about us (as we’re no longer their #1 oil consumer.) China is trying to be us. Heck, it even seems like Congress is against us! 

Add it all up and you’d think the U.S. is in quite a pickle. But you’d be wrong. 

Fact is, to become and stay a world power you’ve got to have a lot of things going for your country. A thriving economy, a “stable” currency, a hard-working population and abundant natural resources (like water and food.) But the real kicker is having a vast supply of affordable energy. 

No matter what the negative, news blurbs portend, the U.S. has a lot going for it. Of note, our vast supply of affordable energy just keeps getting bigger. Indeed if you’re looking for the savoir of our country’s future, you’ll find it about 7,000ft below the topsoil. 

You see, America was dealt a one-two punch of fortune. 

The first punch was a swath of oil that’s propelling our country to the top of the world’s oil production ladder. Indeed, America’s shale oil story is playing out in front of our eyes and it’s a savior for the country’s economy. 

The second punch hasn’t even wind-milled up yet. 

I’m talking about America’s serendipitous natural gas glut. 

As I type, the U.S. is producing more natural gas than ever before. Fact is, production has ramped up so high so fast prices had nowhere to go but lower.

It’s an American energy Catch-22. We’re producing so much of the stuff, and the boom was so unexpected that prices have curtailed much of the current drilling. In other words, with such low prices drillers aren’t drilling for regular natural gas. 

But just as Muhammad Ali lined up a few jabs before an uppercut, a huge haymaker of natural gas will be a game-changer for America. 

All it takes is a little support for natural gas prices to get the next round going. 

Natural gas prices have been in the doldrums for years now. But at some point — as soon as 2014 — the price will start heading higher. 

More demand is coming from within the U.S. border. Power plants are switching over to cleaner burning natural gas, chemical plants are popping up to take advantage of low feedstock prices (same goes with fertilizer producers and other U.S. manufacturers) and slowly but surely more natural gas powered vehicles are hitting American roadways. 

Not to mention more demand is set to come from outside of the U.S. border. Exports to eastern Canada, exports to Mexico and potential liquefied natural gas (LNG) shipments via tanker could all spur demand for nat gas. 

Regardless of the reason, natural gas prices will surely rise. Even a modest rise to $5 or $6 would be a game-changer for the nat gas industry here in the U.S. 

You see, the breakeven price for many dry shale gas plays is over $5. We won’t see much more activity in these gas fields until we see $5+ gas. 

But when that happens, watch out! The same rig-race we saw run to oil plays throughout North Dakota, Texas, Oklahoma and others will be set to take place in America’s shale gas fields. 

There’s just one problem… 

There won’t be enough rigs! 

“They can’t make enough rigs if nat gas prices rise” one of my Texas oil and gas contacts tells me, hinting at the next big trend in America’s energy comeback. 

You see, as it stands many of the now-prolific shale oil plays (the Bakken, the Eagle Ford and the Permian) have enough target zones to drill for the next decade. That means the oil rigs that are out there — all 1,367 that are spinning in the U.S. oil patch this week — won’t be drilling for natural gas. 

To be clear, there are 1,743 rigs (total) working in the U.S. right now, according to Baker Hughes rig count. 1,367 of them, a whopping 78% of all rigs, are drilling for oil. The other 369 are drilling for natural gas. 

Go back a mere five years and the rig count was flip-flopped. With few oil prospects available back then, natural gas rigs totaled 1,537…77% of total rig count. 

In the past five years alone we’ve seen a sea-change in the rig world. With rising potential for higher natural gas prices, we’re set to see our next big opportunity in the sector. Only instead of seeing another flip-flop, we’re going to be looking at an all-out rig shortage. 

That’s music to the ears of rig operators. 

In the coming 12-18 months keep your eyes peeled for a rebound in nat gas prices. When that happens, make sure you’ve already locked in shares of your favorite rig operators. 

Stay tuned for more. 

Keep your boots muddy, 

Matt Insley 

World oil production is about to be shaken to its core… 

You won’t believe which nation analysts at Wall Street’s biggest banks expect to become the world’s biggest energy producer by 2017 — or the effect it will have on America… our economy… our future… 

Click here to see who is set to become the new king of oil — and how you can use the news to go for big profits as early as this month!