Windfall Tipped from Resource Coffers

Source: The Australian, Sarah-Jane Tasker (11/10/10)

"Global mining industry will be sitting on $72B by year-end 2012."

Shareholders could be the winners if miners increase dividends to reward investors.

Citi Analyst Craig Sainsbury said research indicated the global mining market would be in a net debt position of $4B by year-end 2011 and a net cash position of $72B by year-end 2012.

"We estimate the industry to move into a net cash position early in 2012, which is a new phenomenon for the sector," he said. "With strong commodity prices and solid balance sheets, the market is focusing on what the miners do with the cash stockpile. If history is a guide, capex will likely ramp-up but we doubt we will see big-ticket capital management programs from the sector."

For the global sector, capex has accounted for 60% of the cash spend in the past five years and 46% of operating cashflow.

Sainsbury said that next year the global sector was tipped to reach a record $92B of capex, but it was time to increase shareholder returns. "Cash returns to the sector have been almost nonexistent. And on a global-sector basis, any buybacks from miners have been dwarfed by the number of equity raisings and IPOs," he said.

Since 2005, total cash returns to shareholders has been $63B, just 11% of the total net cash spend for the sector.

"While the market is focusing on acquisition and potential capital management plans, we believe the humble dividend is the area miners need to focus on," Sainsbury said.

Citi's analysis shows that dividends, as a percentage of operating cashflow, free cashflow and shareholder equity, are forecast next year to be almost half of what they were in 2006.

"We believe that an ongoing way for miners to increase their cash returns and offset the big cash buildup is to lift their dividend payout levels," Sainsbury said.

Announcing Streetwise Live! Events
Source: Streetwise Reports (07/13/2020)

Streetwise Reports is offering 100 investors—at no charge—the opportunity to meet via Zoom with executives of precious metals companies as they discuss recent developments at their companies and upcoming catalysts.

"China's export quota could be opportunity for Canadian miners"

Latin America: Six Gold Juniors Amass 100M+ Ounces
Source: Marc Davis, BNW News (05/25/2010)

Latin America, the world's last great mineral frontier for prolific gold discoveries, is proving a godsend for some lucky investors.

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."

I haven’t spoken to my old mining stock friend, noted and universally respected gold stock guru, Bob Bishop, about Rare Element in a year, but I hear he is still a supporter and very large shareholder. I don’t believe he will hold it against me to remind you that this was one of his favorite holdings when he left the newsletter writing business. . .

It's Only the Beginning for Uranium
Source: www.financialinsights.com (06/03/2005)

Dr. Richard S. Appel, author of Financial Insights, first became bullish on uranium in mid-2003, when it appeared obvious that its supply versus demand equation was fated to seriously drive higher its price. Since then, a series of events in the uranium industry has led Appel to believe that uranium prices will reach never before seen levels.

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