The mining industry is really bad at seeing around corners or even remembering recent history. Take a look at Freeport-McMoRan (NYSE:FCX). They could never have predicted what wealth they would destroy by playing it “safe” and buying out two oil and gas companies — Plains Exploration and McMoRan Exploration Co. — with serious leverage. That ill-timed… Continue Reading
There have been several reports in the media about Saudi Arabian Oil Co. (Saudi Aramco), Saudi Arabia’s national oil company, spinning out a portion of its business. One of these articles quoted an analyst that pegged the valuation of the “company’s” total assets at US$10 trillion. While I agree that there is value here, that… Continue Reading
There was a sheet ice storm in Portland, Oregon the other day and I did not make it to the office. There was one inch of sheet ice on both my car and the roads, and then it warmed up slightly, producing water on top of the ice. With the ice storm, the decision to… Continue Reading
Management has to be aligned with market conditions or else everything else breaks down. I talked to a banker last week and he pointed out that I was one of the last two or three CEOs that he knew that still owed a major part of their own deal. Most CEOs are either hired guns… Continue Reading
During some parts of the market cycle you have to adjust your expectations and ask why you are in the junior mining space. At market bottom is the best time to ask that question, and clearly we are in such a period. So why are you still here? You believe in gold: It is a… Continue Reading
My team is in the exploration business to find world-class assets. We are not in the tax credit business, the G/A business, the lifestyle business, or the ego business. I had a long conversation last week with someone who was selling me on doing business in a region because of a serious tax credit to… Continue Reading
Is the financial world coming to an end? I don’t think so, but if you looked at the major metals & mining and steelmaking industries, you would think it was. I remember in 2002 when high-tech was dead and in 2009 when the U.S. real estate market was “never” coming back. 2015 could be that… Continue Reading
I am thankful this year. Thankful that I have the basis to get up every morning, that my wife still loves me, that my dog is there, my kids are healthy, my fridge has food, my car has gas, and that the problems I face are in control enough to deal with. When I talked… Continue Reading
I grew up hearing the histories of the gold rushes, and the narratives of people like Chinese-American pioneer Polly Bemis were my early introduction. I read the stories of Idaho County and the gold rush of 1862, and the long-term effects of that gold rush. What I loved most was the history of the Chinese,… Continue Reading
Third in a series on currencies and leverage, by Benjamin Cox China made the right choice to sell a “leveraged growth” story. They ended up with roads, steel mills, bridges, buildings, and ports. Frankly, even with the cost of a debt default or an inflationary period, they will have – on a net basis –… Continue Reading
Second in a series on currency and monetary default by Benjamin Cox The flaw with U.S. debt is that you are really just buying a sovereign currency with a yield. There is no intent to ever repay the debt — at best, there may be an intent to roll it. The assumption is that the… Continue Reading
What happens if the United States prints 18 trillion new dollars and pays off its debt overnight? My belief, which I think is widely shared, is that no one expects the U.S. to pay back its debts – so in reality we have already defaulted. Why not just go one step further and issue the… Continue Reading
China is going to do everything it can to support a five-year price war on iron ore and oil, and they will do so by keeping Fortescue Metals Group Limited (ASX:FMG), Hancock Prospecting and U.S. shale oil producers alive as long as possible. China wins from lower prices, even as the rest of the world… Continue Reading
Real estate location drives valuations, and the mining business is legendary on the games that are played to maximize real estate value. As this industry can become quite complicated at times, it would just be easier to take a look at brentwood condos for sale and everyone move to Vancouver. They’ve got some pretty amazing… Continue Reading
I used to track the number of natural gas rigs, but then things changed… The common assumption was that more rigs would equal higher production. Makes sense, right? Except it did not work out that way. Although the rig count has fallen, production has not disappeared and natural gas prices have remained low. $2-3 per… Continue Reading
