Resource sector stalwart John Kaiser, editor of Kaiser Research, a subscriber supported publication which analyzes nearly 2000 junior resource companies worldwide, joined Vanessa Collette of Cambridge House Live in Vancouver Monday to discuss his take on the junior markets.

Kaiser thinks this summer may be a good time for investors to start bottom fishing out of favor junior resource companies.

He is hopeful for a September rally this year and noted that geopolitical stress is really the kicker that could send gold significantly higher and re-ignite the junior sector.

Kaiser noted that 700 of the 1700 companies he tracks have negative working capital. Another 400 have less than $500,000.

“If you managed to sit out the decline of the last four years… now is a good time to look around… and it’s so easy to see the dead, pretend companies… They’re trading as zombies, undertaking roll-backs… But there are still about 600 companies that have money and are still trying to do something.”

“We need money spent on exploration plays, we need a big discovery that catches everybody by surprise except the people who invested for precisely that reason. And we need a discovery like that to have replication potential so that other juniors with competent teams can generate a similar prospect and tell the market, “We’re going to do the same thing.” Right now the glass is worse than half empty, it’s like everything is a failure before it begins.”

“Valuations are extraordinary low. You can see ounces and pounds in the ground… And you can get on board at extremely low valuations, however there is a lottery ticket aspect to this market… Everything is put up your money, and pray.”

Kaiser expects copper and iron prices to be flat or weak, and that the spike in nickel due to Indonesia’s export ban will be short lived.

The one commodity Kaiser is optimistic for is Zinc.

“Zinc is the one metal where more mines are shutting down than mines are coming on stream, and there is a possibility that China, the biggest supplier by far, may start cutting back its supply, as its attempt to cut back on pollution kicks in. Zinc is the one metal that I can see an uptrend develop in the next few years.”

At the 8 minute mark, Kaiser started talking about scandium, an alloy to make steel lighter which has a puny $20-40 million annual market today. Kaiser thinks that if there were greater supply, there would be greater demand, especially from the aerospace sector.

Kaiser recently went out on a limb to recommend EMC Metals at $0.03 about a month ago, and its shares are now trading at $0.10.

Now if only Mr. Kaiser’s enthusiasm could create a market for scandium the picture would be complete.

More: Kaiser Research Online