A Random Walk Down Howe Street

Cambridge, England is a university town that hosts a house of higher learning.

Cambridge House is a Howe Street abode, a dwelling where hope, fear and greed each have rooms on the same floor (and share a bathroom).

When it comes to the search for a bull market, don’t believe all the signs. (Photo: Resource Investing News)

And floors and bottoms, of the TSX Venture variety, were something of a theme at this year’s Vancouver Resource Investment Conference, run by Cambridge House International.

I attended briefly on Monday afternoon, wandered the aisles, kicked a few tires and met a few friends. Even entered a new position partly as a result of research I did at the event.

Some random thoughts:

- More optimism than the last show I attended, where despair was the prevalent theme. A better turnout as well, albeit with a heavy industry presence. Notwithstanding the Venture’s 10% rise since the beginning of December, 2014 could be another choppy year for the juniors, making this walk down Howe Street a kind of two-steps-forward, one-step back shuffle, with potholes along the way. That makes a company’s cash position – something I touched on in this Vancouver Sun article written after the January 2012 show – critical.

- I often wonder why more CEOs don’t attend to stand behind their company (tables), particularly those whose companies are based in Vancouver. One of the exceptions Monday was Pretium CEO Bob Quartermain, who was pressing the flesh and speaking to shareholders at Pretium’s booth. The stock has shown signs of life, more than doubling since November, but the controversy over the amount of high-grade gold in Pretium’s Valley of the Kings zone in northwestern B.C. continues to weigh on shares. With a very large short position, PVG is a stock to watch.

- Spotted a dressed-down John Greenslade, former CEO of Baja Mining, one of the more striking examples of shareholder destruction in junior mining in recent years. Baja used to be a regular at the show, and before it ran out of money and was pummelled in a proxy fight, I remember a Baja “workshop” where the well-paid Greenslade waxed eloquent on the blue sky potential of the company’s Boleo copper project in Mexico. The stock, facing delisting from the TSX (that’s right, Canada’s main board), is at 2.5 cents, down from 10 cents a year ago and much greater heights in 2006, 2007, 2008, 2009, 2010, 2011 and 2012. A cautionary tale for any junior mining speculator.

- Peregrine Diamonds didn’t have a booth, but I spotted president Brooke Clements on the floor, chatting with whomever was manning the Diamcor booth. Didn’t get a chance to speak to Brooke, but I did chat with Peregrine fan John Kaiser after his seminar. Takeaways: he doesn’t rule out De Beers taking another run at Chidliak and also mentioned Dominion Diamond as a possible suitor down the road. Also, he said he doesn’t particularly like coloured diamonds and he downplayed the coloured gems recovered from CH-6, which he described as a “spectacular kimberlite.” Peregrine is awaiting a diamond valuation on its 1,124-carat parcel of CH-6 gems.

Kaiser covered alot of ground during his talk, including (but not limited to):
- how the major banks are trying to drive the junior retail investor out of the market;
- his belief that the juniors are bottoming and we’re at the beginning of a “selective bull market”;
- his searchable database of junior mining stocks and how he could use it to “terrorize” any exhibitor because he knows more about their project than they do;
- his favourite junior mining stocks – he went through alot of picks, machine-gun style, and I didn’t write them down – and area plays (including the Athabasca Basin).

As for the new position, I’ll write about that in a subsequent blog post.

Disclosure: I own shares of Peregrine Diamonds. Please read my disclaimer.

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