Investors to see which glittering stocks are gold
Mining investors get to see which glittering stocks really are gold
Two Auckland geologists have begun a new venture offering investors in the mining industry independent advice via an email newsletter.
The Mining Investor is a unique publication in the mining sector in that it is subscriber-based and wholly independent of the companies being profiled in each edition. Newsletters of this type are typically funded by the company concerned and are therefore hardly objective.
The initiative comes from two seasoned geologists who are seeking to convey information to investors without the hype and technical jargon usually associated with company reports to potential punters.
The two are Peter Roberts and Dr Ray Merchant. Brief biographies of these mining industry experts are provided at the end of this release.
The Mining Investor is a monthly newsletter for investors in global mining stocks, with a particular emphasis on stocks traded on the Australian stock exchange (ASX). There are over 500 listed resource stocks on the ASX. Over 400 are classed as junior miners or explorers, many of whom are active around the globe.
“This offers a rich field for investors to plough!” Peter says.
The newsletter’s mission is to identify potentially highly-profitable mining stocks at an early stage in their growth and development. Peter and Ray aim to inform investors about quality opportunities before they become “stock market darlings”.
Each month the pair will provide expert analysis of at least one listed stock that they believe is under-rated and which they consider has the potential to outperform the market. They will not provide buy or sell recommendations, but rather will provide data on comparable stocks to illustrate the potential returns.
Peter says The Mining Investor is concerned with longer term success and solid growth.
“Sure, some of the hyped penny stocks can make
good returns for investors, but they can equally well burn
many a finger” says Peter. ”.
“There are several key elements that provide this early warning and it is from experience in the industry that we are able to suss out those with substance from those based only on hype.”
The price of a typical mining stock rises when an exploration success is announced. It rises further when a resource gets upgraded to a proven reserve, and increases again after completion of a positive feasibility study. Investor risk diminishes as knowledge of the resource increases.
The Mining Investor’s focus is companies which have made discoveries which the authors believe to be significant, but are still largely “under the market radar”.
“The investment risk at this stage is relatively low if investors do their homework properly,” Ray says. The potential for a stock to be substantially re-rated, as the market becomes more informed, is high.
Peter and Ray anticipate a steady flow of investment opportunities. There is a general consensus that commodity prices are set to remain at high levels, largely because of the rapid growth in demand from the emerging economies, notably China and India. Years of low investment have resulted in a dearth of new mines and producers are now running to catch up with demand. Global spending on exploration for non-ferrous metals was $US7.1 billion in 2006, compared with $US1.9 billion in 2002.
So who is likely to subscribe to such a newsletter? Peter explains that there are many investors in the general public who are aware of the big gains that can be made in mining shares, but are put off by the perceived risk and lack of good advice couched in layman’s terms. Their main sources of advices are the internet and brokers are, but most brokers are not mining professionals and can only advise as they in turn have been advised. And it can be difficult to find accurate, unbiased information online.
hoping to be the link between the investor and the
opportunity,” Peter says.
Further information about The Mining Investor is found on the website www.mininginvestor.co.nz
Peter Roberts spent his early career scouring the jungles of Papua New Guinea and the outback of Australia for multinational company Kennecott Exploration. From there he joined the BMR (Bureau of mineral Resources) in Australia and studied for and a diploma in mineral economics. While working for the BMR he advised the Australian government on metal markets and commodity cycles.
Upon his return to NZ he headed Amoco
Minerals NZ Ltd, where he met and employed Ray Merchant,
then a PhD student at Auckland University. Amoco conducted
ground-breaking exploration in NZ and discovered the Golden
Cross gold deposit near Waihi.
In the late 1980s Peter co-founded Spectrum Resources Ltd, who explored at home and offshore in the late ‘80s and early ‘90s. In 1992 Peter teamed up again with Ray and they found and developed NZ’s first zeolite deposit, which is still producing today.
Zeolite is nature’s clean-up mineral and with its ability to soak up smells and toxins it is now mined, bagged and supplies half NZ’s requirement for pet litter.
Currently Peter is a manufacturer of deodorizing products, a successful investor in mining stocks and freelance geological consultant.
Dr Ray Merchant began work with Amoco NZ in the mid 1970s, before shifting to consulting firm KRTA Ltd in the early 1980s. At KRTA Ray started their mineral consulting section. He branched out into his own consultancy in the late 1980s, working on a raft of projects in the Pacific region, mainly dealing with gold and copper. Ray’s expertise is in the geological elements of mineral exploration, specifically in developing models upon which exploration programmes can be based.