Downed commodities market imply great buy season

The mining commodities market is struggling – gold and copper are the best examples. Like the prior post I discussed about the gold bear market, the same can be said for other mining commodities. 

Many companies, who owns significant number of producing assets and has many exploration upside potentials are now undervalued severely. 

Some evidences suggest that this bear market will not last longer and is nearing its end; long-term investors are seeing this as they invest in downed commodities such as gold and copper to undervalued companies, hoping for the recovery with enormous capital gains.

Although there are countless examples of this happening, one good example is a recent attraction of numerous buyers for Glencore Xstrata’s Peru copper mine with the estimated capex of $5.2 billion for the project, which is anticipated to go into production (400,000t/y Cu) near the end of 2014.



Current trends in Canadian coal

Canada is phasing out coal nation-wide due to its ‘dirty’ characteristics and moving on to LNG for electricity generation. Currently coal accounts for approximately 13~14% of Canadian power generation and hydroelectricity remain dominant with around 65%.

last of the coal-fired generation plants are expected to shut down (with the extension of life) around the 2030s, resulting in the attempt to sell coal assets by numerous mining companies to players whose coal demand is still strong such as China to dispose of the soon-to-be unnecessary coal assets.

Natural gas currently generates around 6-7% of total energy Canadians use and is projected to increase. Supply-wise, there is no worry as many natural gas deposits are being developed. 


An Overview of Investment Banking

The recipient of such accolades as Mining Deal of the Year 2011 courtesy of ThomsonReuters/Deloitte, John Park founded RCI Group, a privately held financial firm, in 1996. Under his leadership, the firm has experienced phenomenal growth, earning annual sales of CAD 40 million and maintaining offices in the United States, Korea, India, and China, as well as other regions. Through RCI, John Park manages a diverse array of financial services including asset management and investment banking.

An arena of high finance and a source immense satisfaction and wealth when investment deals turn huge profits, investment banking attracts all manner of dedicated professionals. Investment banking is a subset of finance that concerns helping companies increase funds and expand portfolios. Investment bankers tend to be highly qualified and expertly trained, as the position requires them to command knowledge of stocks, bonds, corporate acquisitions, and other areas.

Due to the diverse requirements of the job, investment bankers apply their knowledge in a myriad of ways. Some professionals dispense advice concerning mergers and acquisitions (M&A). Others scrutinize the market, following it day by day to pinpoint the optimal moment for a privately held company to make an initial public offering (IPO).

Investment banking is one of the most lucrative positions in finance, but enormous responsibility offsets that prestige. Companies depend on investment bankers to make accurate projections and put together deals that reap huge rewards. Because of the high stakes involved and the thousands of companies in need of sound advice, investment bankers enjoy job security and room for growth in the field.

Gold’s rout nearing end

A very interesting analysis by Jennings Capital suggested that the rout of gold is nearing its end  – they’ve compared gold bear markets to the previous ones in the past 40 years.

The analysis stated that historical duration of gold depression was 3.2 years with an average weighted price decline of about 43%.

Read the full report here:


Unfortunate event, but pipeline safety reminded

A tragic freight accident claiming lives occurred on Saturday as a train carrying crude oil derailed and exploded – my condolences to the family members. This unfortunate event reminded that pipelines are the safest way to carry oil.

With the technology that’s available today, companies and governments can come up with efficient and effective spill prevention and response program.

According to US data, an average American is 75% more likely to be struck by lightning than a pipeline accident – indicating again, that pipelines are the safest way to transfer oil. 

This incident, albeit the tragedy will speed up the pipeline expansion projects and it can be expected that pipeline will gain a little more support.

Read more in the Globe and Mail:

Now is the time to invest in gold

Without consideration, it is obvious that gold market is depressed – severely. During the time of gold bull market, there were sayings that gold will hit and go over $2000/oz – which never happened. Prices loom around $1000/oz now and given the volatility of commodities and historic gold prices, people can see that gold price will eventually rise again.

Many gold producers are therefore significantly undervalued – world’s major gold players included. So if a strategic long-term investor is looking for some gains, the bear gold market now is the time to buy gold or invest in gold producers.

CNN came up with an interesting article regarding this – and a opinion of why gold prices are tumbling:

oil and gas prices continue falling

oil and gas prices continue falling

Crude oil prices dropped 4% over the last week as well as natural gas prices and they are both continuing to fall. Raymond James analysts warned to expect a period of price volatility. One of the reasons given in this article is because of the weak oil consumption from China.

John Park: The Launch of the Canada Korea Foundation

For more than 15 years, John Park has overseen the RCI Group of Companies, a privately held Vancouver financial services firm. Fluent in Korean, John Park regularly engages in business outside of Canada with nations that include Korea. In recognition of the Asian country’s importance, he established the Canada Korea Foundation.

On Feb. 21, 2011, people from Canada and Korea celebrated the birth of the Canada Korea Foundation. Prime Minister Stephen Harper appeared at the introductory dinner, which also featured Canadian and Korean veterans of the Korean War; Korean-Canadian civic leaders; and Senator Yonah Kim-Martin, Canada’s first parliamentarian with Korean ancestry. At the event, Harper praised the business and diplomatic relations between the two nations and commented on how this new organization would continue enhancing their affiliations.

The meeting highlighted many reasons for the partnership. Two-way merchandise trade between Canada and South Korea reached $9.5 billion in 2009, and Koreans have become one of the nation’s quickest-growing communities, with influence in all sectors. The Canada Korea Foundation plans to expand on those successes by bolstering bilateral trade, creating free-trade agreements, increasing the amount of Korean students who study in Canada, and promoting alternative energy strategies.

Exxon, the world’s largest energy company by market value, asked Canada for permission to export 30Mt of liquefied natural gas annually from BC

Chinese SOE eyeing on Canadian iron-ore asset

Chinese SOE eyeing on Canadian iron-ore asset

Very interesting article. Minmetals, a Chinese SOE have been eyeing on Rio Tinto’s iron ore assets. After CNOOC-Nexen deal, the federal government raised the bar for acquisition of Canadian assets by foreign SOEs and the test of the newly set bar height is just around the corner.