Where would you characterize where we are in the base metals cycle right now? It seems we've had elevated prices for some time, so I would expect new production to come online soon. When do you see the next wave of new production to bring prices down again?
1:40 [Comment From Chris]
Copper - or doctor copper - is regarded as a leading indicator for economic strength - followed by lead and zinc etc. It really depends on your view on the medium term economic climate Us - Europe - China and the developing world - as long as China's demand for metals continues - the base etal market will remain firm
1:41 Darcy Keith - Next, we have two related questions on what your crystal ball is showing:
1:41 [Comment From Justin ]
Hi Chris. What are your top 3 picks right now?
1:41 [Comment From Jay ]
Chris what would be your top picks in the mining sector right now?
1:46 [Comment From Chris]
OK - for leverage to the silver price and growth - we like Fortuna - for gold and silver development - we like Kimber Resources - B2Gold looks good - but isn't cheap on a cash flow basis - but they have one of the best teams in the sector - for exploration and developement. Keep an eye on Mirasol for resource growth in the silver exploration space.
1:47 [Comment From James ]
What are your thoughts on the multiple contraction currently taking place for senior gold companies? Have we reached a new age where these companies trade at 1x NAV or is this a temporary undervaluing of the stocks?
1:53 [Comment From Chris]
I believe in valuing senior producers on a cash flow basis - not a NAV - unless they present significant growth potential - I feel that in time - M & A will help add the longer term growth potential that majors seek - which will be accretive to NAVs.
1:54 Darcy Keith - Two related questions now on a commodity that's been in the news a lot lately:
1:54 [Comment From Guest ]
Is uranium a good play over the long-term?
1:54 [Comment From AustinC ]
What are your thoughts on the uranium space? Is this sector doomed because of the issues Japan is seeing?
1:58 [Comment From Chris]
Thanks - I don't cover the uranium space but my colleague Geordie Mark does - feel free to call him. On uranium...
2:01 [Comment From Chris]
Obviously there is a lot of uncertainty in this space right now due to the events in Japan, and the spot uranium price has fallen the last 5 consecutive weeks. Japan is still only operating 20 of its 54 reactors, and they are beginning to feel the pressure to restart due to power shortages. In the junior uranium space there is a question as to whether the explorers and developers will be able to access the capital required to fund their future work. With that in mind, we see real opportunity in companies recently entering production such as Uranium Energy Corp, and those on the verge of production, such as Uranerz Energy Corp., as well as Paladin Energy, who has an aggressive growth profile.
2:01 [Comment From Tony ]
Chris, your 6-12 price on silver is corrective/bearish. Others like Eric Sprott are very bullish, and explained it through the supply/demand cycle driven by currency hedging. What drives your outlook?
2:02 Darcy Keith - And a related question from Jin:
2:02 [Comment From Jin ]
You mentioned earlier that silver will be dropping to $20 in the next couple of years. What is your rationale on this? Does this mean gold is also going to get pulled down along with silver?
2:10 [Comment From Chris]