Jim Letourneau's Blog

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Answers to Your Questions

Here are the answers to the questions my readers have come up with for the Vancouver Resource Investment Conference - Eye Opener Panel. Many thanks to Marin Katusa, Louis James, Peter Spina, and Leonard Melman:

Q - If we recognize we have an imbalance in NA Gas deliverability, what with the success of shale gas and LNG world capacity, why is the Mackenzie pipeline going forward? Or is this a 20 year project?

A - Marin Katusa said given the economics, environmental and land claims issues that 20 years was more likely.
Q - Hi Jim, thank you for the opportunity to participate. I don’t know how well this question fits the panel but I’d like to know the projected future of fancy colored diamonds. Also, I’m a fan of Harry Dent, my other question is what will the retirement of 100 million baby boomers/consumers in the next 10 years do to the resources markets?

A - The panel was in broad agreement that the demographics of the developing world are far more important that what the baby boomers are up to.

Q - Why would I want to invest in a pure exploration play at this time, when I can buy near term or already producing companies at similar valuations that the exploration companies traded at 12 months ago? Why buy speculation when I can buy cash flow?

A - Marin Katusa talked about companies that are trading at less than their cash value. While still speculative, they had discovered some companies that were relatively cheap. Marin pointed out that it would be a good time to sell when/if they got back to their cash level. Peter Spina and Leonard Melman saw value in junior gold producers/near producers.

Q - TCK.B could be a backup the truck IF they can handle their debt which has to be managed by Sept 09. What is the breakdown of the debt and is the banking syndicate holding debt made up of solid financial institutions and likely to renew??

A - Nobody had an answer


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Q - What are the chances of Uracan [URC] going into production on their North shore properties and what time frame?

With nickel in the doldrums will Knight Resources [KNP] and their multinational partner Anglo American contnue their exploration work on their Raglan nickel property or will they abandon it after spending millons?

Ivory Petroleum [IV] Western Sask heavey oil, Central Alberta natural gas can they remain solvent and producing?

A - We didn't talk about specific companies on our panel. I'll be more specific when I ask for questions next time.

Q - I have believed, for quite some time, that Mexico is one of the best places to invest in mining companies (according to many gurus at various resource shows). Lately I have read several articles that suggest Mexico could collapse into anarchy, especially when their oil resources and revenues from the oil start to crater. Also the corruption and drug cartels are close to causing a collapse in the economy. Is it that bad? Is this likely to happen? What do you think?

A - Louis James gave a great answer. He was born in Mexico and talked about how everyone in Mexico knew that no matter who was in power, they were going to get screwed. Something has changed lately and the standard of living is increasing. It is a great place for mining companies to do business.

Q - With a number of governments worldwide, prepared to inject big dollars into infrastructure work for the next few years, what will be the effect on base metal prices such as copper-Zinc-nickel-moly?

A - There was some skepticism as to how much actual building will occur once the infrastructure money passes through successive levels of government. The panel was short/medium term bearish but still pointing to growth outside of the US to drive demand.

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