Well, since the PDAC posts went viral and earned me a massive audience which I've since driven away with brutal invective, I figured why the heck not do the same for the Cambridge House thingie too?
First thing that has to be said is that the Sheraton is a much better venue than PDAC's MTCC South. #1, you're only two floors underground instead of five. This means cleaner air and fewer Balrogs. #2, the rooms just... feel... bigger, I dunno. Y'know? Also, the decor is more "faux Victorian hotel" and less "MTCC has an Ikea discount card".
Now, I originally wasn't even going to bother going on the Thursday. Then I saw Adrian Day added to the Thursday AM speakers and figured I should go - he was definitely a bright surprise at PDAC.
Well, I got there early, and the first thing I saw on my way down the escalators was this:
Well, that doesn't look promising... I'm going into the lion's den here. Jay Taylor, Jeff Berwick, gun-totin' US patriot wackaloons, and now a place where you can buy gold and silver "bullion" (read: highly marked up coins).
And then I stumbled into the last few minutes of the "eye-opener panel":
There's Mickey Fulp, Lenny "Bud" Melman, the strangely normal-looking Tommy Humphreys (and of course it's usually the normal-looking ones who eventually are found to be hiding a collection of street-people's severed heads in the freezer), some completely hidden other guy, and at the end a partially hidden Sean Brodrick who was about the only guy at TRIC with a flame-red shirt.
I only was there for the last 5-10 minutes, so all I got out of it was:
1) Mickey still likes Curis and Strathmore; he thinks the rally in REEs will continue and likes QRM (instead of, say, Molycorp, who actually have a rare earths mine, and already know how to mine rare earths, god Mickey this ain't rocket science); he might have finally quit going on about graphite; and he says "the smart money - the people that matter - are starting to put their money back into the market via PPs", which really ended well for ev-eryone the last time didn't it.
2) Lenny "Bud" Melman talked about something called "poe-tash". I should look into this "poe-tash".
3) Brodrick would be a fine radio host. In fact, I think we have the next Sean Kennedy - he's already up on the survivalism thing, so we just need to get him into conspiracy theories, transhumanism, anarchy, Neon Genesis Evangelion, goth chicks, and wardroids and he'd be Sean Kennedy all over again. Serious, he'd be a fine weekly podcaster with that voice.
And then it was time for Adrian Day:
And I have to admit, in the first few minutes I was disappointed. Here's a perfectly respectable British economist, one who's studied Mill and Smith and Keynes, one who might someday aspire to his own Nobel Prize like wot Krugman got, and he spends the first few minutes making digs at Ben Bernanke and pretending to be a member of the Ron Paul Brigade. Srsly?
Maybe he was just playing the songs the crowd was calling for. I mean, it's a good way for Day to endear himself to the crowd right away. But I'm sorry, when I go to an Aphex Twin gig I don't want to hear "Free Bird" just cos some loons are yelling "play some Skynyrd!"
Anyway, it seems like he really did just throw in the Bernanke attack to lure in the crowd, because he then spent the next 25 minutes talking about the serious stuff: the demographic-driven resource boom. The pic up above shows (blurrily) the slide that Day's shingle hangs on. Again, the shortest copper cycle was 17 years, longest was 44, and we're only 11 into this one. You think this boom will be the outlier? Let statistics do the work for you. He thinks the China boom will be as significant as the UK industrialization or the German/US concurrent industrializations - and both of those led to long resource booms.
Funny nuff, he also notes that over the past 20 years, Chinese consumer spending as % of GDP has gone down, while savings as % of GDP has gone up. Now, I also know that China has a repressive anti-saving environment; add that to the mix, and you've probably got China driving a boom in gold.
Day also notes China in 2011 only had 90 cars per 1000 pop.; even Brazil was already at 280 per. A recent survey had something like 26% of 18-54s in China saying they wanted to buy a car in the next six months. Point being, numbers like that will drive Chinese resource consumption.
And again, China only uses 4kg/person of copper per year; we use 8kg/person, and we're post-industrial. (Post-industrialized economies use less resources than at the peak of industrialization, both cos (me here) resource-light "services" are a larger chunk of the economy, and cos mature economies already have had decades of sunk hard asset investment: copper transmission wires don't rot away.) Point being, China has a lot more copper consumption still to do.
BTW, re all this "China China" stuff - I chatted with him afterwards, and he does seem to value China more than, say, LatAm. Frankly, I think China's kaput once their demographic cliff hits in 2017, and the real future drivers will (this is the way it always works) be the countries where the young grossly outnumber the old - Malaysia, Indonesia, Thailand, and then LatAm ex Brazil (cos Brazil's already fucked - the Russians are moving in and that never ends well). He maybe thinks China gets back to producing a replacement rate of babies; that fails the demographic driver model, I'd reply, since you're still going to have a downward slope to your % participating in labour force til those babies grow up.
Still, I think you can substitute any billion-sized bloc of population for "China" in his "China will X" statements, and they'll still work, possibly even better. So, Indochina, for example, or LatAm.
Anyway... he asserts that because of the massive lead times needed for copper discoveries to begin producing, we pretty much know today how much copper we'll be producing in, say, 20 years. And long story short, it's not enough. He feels there's no historical example of a country getting as far down the path of industrialization as China and then stopping (cough Soviet Bloc cough). He's not concerned about Chinese inventories.
Meanwhile average new discovery grades continue to dwindle.Another point for us.
Oh, and he doesn't think Taca Taca ever gets bought. That last bit was for Otto. But Ross Beaty's still more handsome and rich than both of you combined.
So, after AD was done, it was off to the swag counter:
Ooh lookie! Books and pamphlets!
I snagged the "Mining Leaders: Colombia" and "Mining Leaders: Peru" books, so I could pretend I'm doing due diligence or sumfink on my LatAm stocks. (UPDATE: Ooh, one has a big interview with my hero Clive!) Plus a copy of the May 2012 E&MJ, with their "special report on Ontario mining and financiers". And this week's Northern Miner. All free! Free, I tell you!
Then I swung by the Argonaut booth, and had a fun informative conversation that pretty much avoided anything to do with the political situation around San Antonio because you're not going to come across any IR person at any conference from any company who will ever give you the straight dope about anything like that. Never. Don't bother asking. I'll leave it to Otto and
Then it was off to see who this Ian Graham fellow was:
Another Adrian Day, except with a strange West Country-meets-Australia accent. Or maybe West Country-meets-Tyneside, as I seem to have a habit of mistaking Geordies for "bloody Australians". But it was certainly a west-country "r" in his accent. Or not.
While Day played to the crowd, Graham seems to have not yet cottoned on about what this goldbug lot is like - he pointed out governments are more democratic today than they have been in the past, "despite what you hear on these panels", a gentle little dig at Vinnie Maru and Jay Taylor (who were in the "insane goldbug" panel at 9:30 that I didn't stay around for because I wanted to save that braincell for old age).
I was joking later with
Again, the thesis is, demographics drives resource consumption. The world will urbanize another 3 billion people by 2050. Thus, to da moon Alice - in fact, he concluded by saying (pretty much can't argue with him) "this will be the greatest resource demand growth cycle the world will ever see". And pretty much the last, we might add, unless there's another 6 billion neolithic tribesmen hiding out in an undiscovered continent somewhere.
Frankly, when I hear something like that, first thing thru my head is "phew! What a relief! I thought Jim Rogers' commodity bull would end in 2017 or so and I'd have to learn how to trade real stocks."
Of course, then the dystopian futurist in me replies "what happens then? Is that the last gasp of the human race?"
And finally, the Satanist in me responds to that annoying little dystopian with "WTF do I care? I'm dead by 2040. Fuck you, fuck that legacy for our progeny shit, I'm gonna get me a rich ass and then spend 20 years banging Ukrainian gymnastics starlets. If my kids can't build starships and mine asteroids by 2040 they deserve what they get."
In sum, it's the singular greatest resource boom that will ever be seen, and Anna Bessonova look me up sometime, sweetie.
Sorry, where were we? Oh, Ian Graham.
He pointed out, interestingly, that most mineral exploration is PMs, not base. Despite base being the bigger money. Then again, do you get more bang for your exploring buck by exploring for base metals?
He's also bullish on mined energy. Natgas, coal, so on. In fact, his graphs on future coal use imply that the Toronto area will be a sweltering tropical jungle in 30 years. That clathrate gun it gonna go boom, cheese. If, that is, you believe in global warming... er, I mean, science.
And on his graphs... man, what graphs! Take a look.
No, seriously, I know what this graph means, and it means I be gettin' the hot Ukrainian chixxx soon.
Those big circles represent the size of each consumer nation, and where they are on the x-axis represents per-capita GDP, which correlates vaguely directly (post-industrialism aside for now) with resource consumption.
So as those circles move to the right, their consumption increases per the size of the circle.
And China alone has a circle with bigger area than all the white folks' countries already up beyond $30k/person.
But then again I'm the kid who got 90s in math while doing zero homework. So I can see this. YMMV.
So, basically, PDAC (and these Cambridge guys too) need to hire more Ian Grahams and Adrian Days to give talks, and fewer podcasting/blogging wackaloons. Cos this is where the meat is, these two guys.
Of course, China could always collapse in another Asian Tigers crisis, and the US could progress to the next stage of post-industrialism where per-unit-commodity productivity drastically increases yet again and the automation of the West ushers in a new era of Western economic expansion. Or maybe Richard Branson starts landing metallic asteroids in the Australian outback (or wherever there's nothing of value and no human habitation - Ungava, Nunavut, Calgary) and mining all these space minerals for peanuts.
Still, it gives me hope.
Anyway, after Ian Graham, I came across
After a 2-minute intro where he tried in vain to teach the audience the basic things you should always look at in an exploreco (burn rate, managerial experience, a working model of the mineralization, unhealthy obsession with their criminal pasts at the IKN blog), he was off to a rapid-fire Q&A. People randomly shouted out stocks, and he responded with his opinion. A few random examples?
DMM - "screwed."
SVL - just met with them yesterday.
SWD - no good. Basically, his opinion was... um, I dunno. Can't explain it. In one ear out the other. I'm not an economic geologist, but I know when one's speaking, and he was. And he doesn't think SWD works and he seemed to think he had a good reason for it.
ITH - doesn't think it works either. As he said, "Kinross is right next door. So why'd Kinross go to Mauritania to buy their next property?"
He did not say anything about Calibre Mining being a guaranteed 20-bagger. But I think that's only cos he never got asked.
And then, it was off to lunch at Fisherman's Wharf.
$30's a bit much, but it was good. Should maybe have just bought the big seafood platter instead. Not enough wiggly things here, too many vegetably things.
And the big surprise?
Innis & Gunn beer. Very nice. Scottish apparently? But it tasted very much like a Belgian beer. Not so much an ale as a lambic. $9, small bottle, but then again I've happily paid $20 for the Orvals of this world. Very very nice beer. And yes it is sort of pink, but that's maybe the hops. I don't know these things, I work in engineering and the golden rule is if you're smart, you hire technicians to make the beer - you just drink it.
So tomorrow, or maybe Saturday cos I'll be there til late and I've been writing this for 3 hours already, you'll get part two of the Cambridge House review.
Now go viral, me pretties!