NEWS RELEASE.

May 30, 2013: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF) has released the remaining drill results from the winter 2013 drill program which further expand the Bug Lake gold zone, further delineate the Martiniere West zone, provide indications of continuity for a previously intersected high-grade gold-silver discovery in the Martiniere East area and suggest the presence of another Bug Lake parallel (north-south trending) gold-bearing structure on the property. The Martiniere Property forms part of the Company’s wholly owned 600+ square kilometre Detour Gold Trend Project in Quebec.

Bug Lake Expansion Drilling

All eleven holes testing the northern extension of the Bug Lake Gold Zone successfully intersected broad intervals of anomalous gold mineralization associated with the Bug Lake fault zone, extending the zone by approximately 115 metres to the north and to a vertical depth of 285 metres. The results also confirm the extension of the Bug Lake Gold Zone beneath a previously outlined “flat” feature/fault. As with previous drilling a number of high-grade gold bearing vein/structures were intersected both within the Bug Lake Gold Zone and in the hanging wall/footwall to the Zone. The Bug Lake Gold Zone now extends for over 725 metres along strike, to a vertical depth of 285 metres and remains open in all directions for further expansion.

Drill hole MDE-13-103, the deepest hole testing the Bug Lake Gold Zone to-date, intersected several mineralized intervals including the Upper Bug (16.40 metres grading 0.73 g/t gold) and Bug Lake Gold Zones (46.79 metres grading 1.10 g/t gold, including a high grade interval grading 11.25 g/t gold over 0.93 metres) as well as a high-grade Hanging Wall structure which returned 26.70 g/t gold over 0.41 metres). This hole extends the Bug Lake Gold Zone to approximately 285 metres vertical depth, approximately 60 metres deeper than the previously reported deepest intercept in the Zone.

For more on the results – including the Martiniere West Zone and Exploration holes – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

May 28, 2013: Vancouver, B.C. – North American Tungsten Ltd. (Stock Profile – TSXV:NTC) has cancelled stock options to buy 550,000 shares granted to employees:

• Options for 160,000 shares exercisable at 42 cents granted on March 8, 2012;
• Options for 240,000 shares exercisable at 41 cents granted on Jan. 5, 2011;
• Options for 150,000 shares exercisable at 41.5 cents granted on April 5, 2012.

The company further announces the granting of stock options to buy 2,075,000 shares to certain of its employees (including the employees who agreed to the cancellation of their stock options as noted herein) exercisable at 18.5 cents per share, expiring on May 28, 2018, pursuant to the company’s stock option plan.

The options will vest as to one-third immediately; one-third on Nov. 28, 2013; and one-third on May 28, 2014. The cancellation of stock options and concurrent granting of new stock options are considered an amendment of an existing stock option pursuant to the policies of the TSX Venture Exchange. Since none of the individuals impacted are directors or senior officers of the company, no shareholder approval is required.

To learn more about North American Tungsten – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

May 28, 2013: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF) has, received from GTA Resources and Mining Inc. (“GTA”), results from an additional 4 holes completed as part of the on-going Phase 4 drilling program on the Company’s Northshore Property located near Schreiber, Ontario.

Results confirm the southwest extension of the Afric Gold Zone with hole WB-13-44 returning 0.66 g/t gold over 196.50 metres, including a higher grade section which returned 3.14 g/t gold over 13.00 metres interpreted by GTA to represent the south-westward continuation of the Audney vein system. Hole WB-13-43, drilled up-dip of WB-13-44, also intersected the interpreted extension of the Audney vein returning an intercept of 178.00 g/t gold over 1.00 metre.

To view a table of the results – CLICK HERE.

CompanyFeed™

Clean 1+ carat colorless synthetics are hitting the market for the first time, and with a consistent stream of recycled polished making their way back into the market, the dynamics of diamond supply may for forever be changed.

Unprecedented Gem-Quality Synthetics

Last month, a 1.29 carat colorless “E” synthetic with almost no inclusions (the largest of its kind in history) hit the polished diamond market. While synthetics have been produced since the 1950’s, the technology has been primarily used to supply the market with industrial grade stones, not gem-quality diamonds.

The record breaking 1.29 carat stone mentioned above was created using CVD, and is currently on the market for $7,633, about 38% cheaper than a natural equivalent which can currently be found on the market for around $10,500.

The impact that clean, colorless gem-quality synthetics will have on the jewelry market will greatly depend on consumer demand for non-natural diamonds, as synthetics currently only account for approximately 2% of supply. As a proxy, synthetic gem-quality rubies and sapphires have been produced in labs for over 100 years, but their availability has not reduced the demand for natural stones, as the premium for natural over synthetic has held over the years. It will take substantial shifts in marketing campaigns and consumer attitudes for synthetic diamonds to pose a significant threat to natural diamonds in the jewelry market.

On a De Beers conference call in November 2012, when asked if the company is concerned about the impact of synthetics on their natural gem business, an executive said “so, while there may be a business for [lab-growth diamonds], we don’t see that it is a cannibalizing business of ours on the basis that we maintain the dream and the emotion and the symbolism and the luxury and the value associated with the natural diamond.” On the same call De Beers went on to express the importance of disclosure of synthetics to alleviate customer concern of being sold a synthetic when paying for the price of a natural.

Technology has recently been developed capable distinguishing synthetic from natural diamonds in a way that is financially and technically within the reach of jewelers. In addition, there is an inherent incentive for jewelers to use proper disclosure when selling synthetics, as it would be fatal for a jeweler to be caught selling an undisclosed synthetic as a natural.

Synthetic gem-quality diamonds will most likely have a greater impact on technology than jewelry. There is unquestionable pent up demand for more affordable flawless diamonds in the semiconductor industry. Since diamonds have a higher thermal conductivity than any other material, diamond microprocessors can run at speeds that would cause ordinary silicon chips to melt. Flawless synthetics are demanded in other high-tech applications as well, including infrared radiation transmission and high-sensitivity sensors. Up until now, diamond use in high tech industries has been limited because the cost has been prohibitive, but expect new lower price points to unleash years of pent up demand.

Recycling/Re-Selling of Polished

Also impacting global diamond supply is the recycling of polished diamonds, which is by no means a new phenomenon but rarely talked about, and could account for 5-10% of current market supply.

Even at the high end of current estimates, recycling of diamonds relative to supply has been minimal compared to the recycling of other hard assets such as gold. This is primarily because it traditionally has been difficult for consumers to sell-back diamonds.

Despite the liquidity constraints of selling-back diamonds, there have always been instances in which diamonds have been resold. For example, a diamond engagement ring sold regardless of price in an attempt to erase a memory after a divorce, or the desperate pawning of a gold ring with diamonds to payoff a debt. But sales such as these historically have not occurred frequently enough to significantly impact the market.

However, in recent years, as high-quality rough is becoming more difficult to find, and more expensive to produce, the industry is seeing historic levels of recycling as high diamond prices rival the sentimental value of consumers jewelry. In addition to higher prices, the availability of diamond pricing information available to the public on the internet is also leading to more consumers willing to sell-back. As an anecdote, I surveyed some independent jewelers in New York’s diamond district, and it is was not difficult to find a jeweler willing to buy a diamond at a 15-20% discount from the price that they would sell a similar stone. It appears as if people are ‘hitting this bid’ as quite a few of the stores disclosed that up to 25% of their current inventory is recycled.

It’s worth noting that investment in diamonds is becoming increasing popular, especially in Asia, as high-net-worth individuals are buying the rarest high quality diamonds and storing them away in safe boxes. These diamonds are temporarily taken off of the market as they are held in anticipation of price appreciation, and eventually ‘recycled’. The investment community for diamonds is still very small though, estimated to represent less than 1% of current diamond demand (for comparative purposes, gold investment represents 40-50% of current gold demand).

Its difficult to precisely quantify the overall impact that recycling currently has on the market given that most buy-backs take place in non-transparent environments such as independent or “street” jewelers, and pawn shops. Most mainstream jewelers still do not buy-back. In addition, a lot or recycled diamonds are recut by jewelers converting old shapes into more fashionable designs, making tracking recycled diamonds that much more difficult.

Paul Zimnisky, Guest Contributor to MiningFeeds.com

About the author: Paul Zimnisky, has worked in the financial industry for almost 10 years, primarily as a buy-side equity analyst focused on the metals and mining space, and as an ETF arbitrage trader.  Paul currently creates and develops new exchange-traded products.  Paul has a finance degree from the University of Maryland.

NEWS RELEASE.

May 17, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) announced it is adjusting the company’s strategy under current market conditions, and for the next phase of the development and advancement of the Chinchillas silver project, it is enacting a program to review and restructure the management team. In this light, the employment agreement with Carlos Fernandez will not be renewed. Accordingly, the company will not be proceeding with the previously announced private placement and loan (see news release dated May 3, 2013). The company wishes Mr. Fernandez well in his future endeavours. In the interim, Joseph Grosso, the company’s executive chairman, will act as president and chief executive officer.

While the status of the current economy persists and calls for management to implement a conservative approach toward corporate expenditures, the technical team will continue with the advancement of the Chinchillas project. This includes further metallurgical testing, an internal preliminary economic assessment, and an exploration program aimed at upgrading and expanding the current resources.

To learn more about Golden Arrow – CLICK HERE.

CompanyFeed™

Gold bullion prices fell to three week lows around $1,410 an ounce Wednesday, as European stock markets ticked higher, reversing earlier losses following disappointing Eurozone growth data. Gold in Euros fell as low as €1,094 an ounce, while gold in Sterling fell below £930 an ounce.

“Gold spot is approaching the support [level] of $1,403 [an ounce],” say technical analysts at Societe Generale.

“There is no significant level of support between here and the low from April 16 in the $1,322 area,” adds the latest technical analysis from Scotia Mocatta.

The world’s biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) could lose up to a further four million ounces (almost 125 tonnes) to add to the nearly 300 tonnes it has lost through redemptions since the start of the year, according to analysts at Deutsche Bank.

“We expect that the bulk of the drawdown comes from institutional investors rather than retail investors,” says a report from Deutsche. “If in fact only institutional selling is occurring in the gold E.T.F. then we expect that nearly two-thirds of the selling that is likely has probably already passed. As SPDR is roughly half of total physically backed E.T.F.s, this could imply a further 4 to 8 million ounces [approx. 125 to 250 tonnes] selling [from all gold E.T.F.s] if macro fundamentals continue to move against gold.”

“In the short term, gold prices remain caught between the recent slowdown in US activity and the significant decline in ETF holdings,” adds a note from Goldman Sachs, whose analysts have a 12-month gold forecast of $1390 an ounce. “While the sell-off in gold prices has been faster than we expected, with prices below our near-term forecasts, further unwind of ETF positions would likely continue to precipitate this decline…going forward, we expect that gold prices will continue to decline should our economists’ forecast for a reacceleration in US growth later this year prove correct.”

“Gold is likely to remain sensitive to potential dialog regarding the Fed’s QE intentions,” adds a note from HSBC, referring to the US Federal Reserve’s ongoing $85 billion a month quantitative easing policy. “Further comments by Fed members for scaling back QE would be negative for bullion prices.”

On the currency markets, the Euro fell to a six-week low against the Dollar Wednesday, while the Yen touched a fresh four-and-a-half year low, as Japan’s Nikkei 225 index breached 15,000 for the first time in over five years.

Over in Europe, France fell back into recession in the first quarter, according to provisional GDP data published Wednesday that show a second successive quarter of negative growth. German Q1 growth meantime was 0.1%, provisional figures show, less than the consensus forecast among analysts. GDP for the Eurozone as a whole contracted 0.2% in Q1, data published this morning show, to make a 1% year-on-year drop in economic output.

Ratings agency Fitch meantime upgraded its credit rating for Greece Tuesday, citing progress on cutting the government budget deficit, although Fitch still rates Greek government bonds as junk with a rating of B-.

The latest Bank of England Quarterly Inflation report, published this morning, shows a “welcome change in the economic outlook”, according to outgoing governor Mervyn King. “Today’s projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago,” King told reporters this morning.

“That is the first time I have been able to say that since before the financial crisis.” King added however that “the challenges facing central bankers are as great as they have ever been”.

NEWS RELEASE.

May 13, 2013: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF) reported that widely spaced drilling has successfully extended the Bug Lake Gold Zone by 350 metres to the south, effectively doubling the known strike extent of the Zone. With the southern-most hole of the current program returning some of the strongest intercepts reported today the Zone remains open to the south and to depth on all sections. The Bug Lake Trend, which includes the Bug Lake, BL Hanging Wall and BL Footwall Zones, is one of two prominent gold bearing trends located on Balmoral’s Martiniere Property. The Martiniere Property forms part of the Company’s wholly owned 82 kilometre long Detour Gold Trend Project in Quebec.

“Our winter program focused on expanding the scale of the Martiniere Gold system, and has now successfully doubled the known extent of both the Martiniere West and Bug Lake Gold Trends, with both remaining open for additional expansion,” said Darin Wagner, President and CEO of Balmoral Resources. “Our planned summer diamond drill program, which is fully funded, will work to quantify the potential economic impact of the recent expansions and further delineate the extensive zones of gold mineralization located along both trends and elsewhere within the expanding Martiniere Gold System.”

For more information on the results – CLICK HERE.

CompanyFeed™

Spot gold prices slipped back below $1470 per ounce Thursday morning in London, drifting as world stock markets failed to follow Wall Street higher, where equities yesterday hit new all-time highs. Silver held above $24.00 per ounce, just shy of last week’s finish, as commodities slipped overall.

A rise in Sterling after the Bank of England held its monetary policy unchanged drove gold prices down to £942 per ounce for UK investors.

Government bond prices meantime rose everywhere except Australia and New Zealand, where strong new jobs data saw both currencies jump together with interest rates.

In Europre, Spain today raised €4.5 billion ($6.5 billion) in new debt at sharply lower interest rates from its last bond auction in April. Neighboring Portugal has “already been able to totally finance our needs for this year” the finance minister said earlier this week, adding that Lisbon is now aiming to start pre-financing its 2014 needs and plan an exit from the €78 billion bail-out it received from the European Union and IMF in 2011.

“The downtrend in [gold’s Relative Strength Index] is bearish,” says the latest technical comment from bullion bank Scotia Mocatta, “as it indicates that gold is becoming overbought at progressively lower levels, and becoming oversold at progressively lower levels.” Even so, “Gold still has some room to move higher before making its next leg down,” Scotia’s note adds.

In terms of private-investor demand, “The pace of buying has cooled,” says another broker, pointing to “the frenzied pace” following the 30-year record price crash of mid-April. “We suspect that those sitting on the fence and waiting for cheaper prices may yet have another shot at getting back in.”

Amongst the exchange-traded trust funds favored by money managers buying gold, the giant SPDR Gold Trust shed another 6 tonnes on Wednesday, taking the quantity of bullion held to back its shares to the lowest level since March 2009 at 1051 tonnes.

“Indian physical demand is strong,” says James Steel at London market-maker HSBC, “and the combined response by consumers and retail investors to the plunge in prices since mid-April is absorbing a portion of the liquidation in the gold-exchange traded funds.”

“No end in sight for precious metals appetite across the globe,” agrees Swiss refining and finance group MKS, “especially out of China and India” – the world’s No. 2 and No.1 consumer markets respectively. “The question is who will win the battle between the unprecedented physical demand, and the unrelenting ETF supply.”

Importers are rushing to beat new gold restrictions proposed by India’s central bank, according to Rajesh Khosla, managing director at MMTC-PAMP India, in New Delhi.

“Supported by strong physical demand from India and China,” says Mumbai-based brokerage Emkay, “gold prices in India can be supported by physical demand ahead of Akshay Tritiya” – the spring festival celebrated this year on May 13 and traditionally an auspicious day on some Hindu calendars for buying gold. 

Indian jewelers are buying gold at up to $12 an ounce over benchmark London prices, Livemint quotes Bachhraj Bamalwa, a director of the All India Gems & Jewellery Trade Federation. That compares with $2 an ounce before mid-April’s slump in global gold prices.

With gold gifts now in demand for the Indian wedding season – which runs until July –”Should you buy gold [for your own portfolio] this Akshaya Tritiya?” asks Jayant Manglik, president of retail distribution at Indian brokerage Religare Capital, writing for MoneyControl. “The unambiguous answer is yes. Having gold in the portfolio increases diversification & security while reducing risk & volatility. It is liquid in any country in the world and is virtually physically indestructible. “The right mix would have between 10 to 15% of your investible surplus.”

On the supply side, meantime, the world’s largest gold miner corporation – Barrick Gold – has restructured a deal with the Dominican Republic to share more of the revenues from its giant Pueblo Viejo project with the government. Barrick cut half-a-billion Dollars of new exploration spending from its 2013 plans following April’s price crash.

Gold mining output from South Africa – formerly the world’s #1 producer nation, but now in 6th place after production halved since 2000 – fell again in March, new data showed today, down a further 6.2% from a year earlier to the lowest levels in nine decades.

NEWS RELEASE.

May 9, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) released the results from its initial independent NI 43-101 complaint resource estimate for the Chinchillas silver-lead-zinc project in Jujuy, Argentina. The resource estimate includes 7.2 million tonnes grading 119 g/t silver, 0.57% lead and 0.48% zinc (32.6 million ounces silver equivalent (Ag Eq) at 141 g/t Ag Eq, and a 50g/t Ag Eq cut-off) in the indicated category, and a further 21 million tonnes grading 78 g/t Ag, 0.69% Pb and 0.62% Zn (72.2 million ounces Ag Eq at 107 g/t Ag Eq grade and 50 g/t Ag Eq cut-off) in the inferred category.

“The Company is thrilled to have completed its first NI 43-101 resource estimate of more than 100 million ounces of silver equivalent combined in indicated and inferred categories. Given that the deposit appears to be open in all directions, the Company is confident that the potential for the estimate to increase is high with the completion of the Phase 3 drill program planned for the third quarter of this year. The favorable geometry of the deposit for open pit mining, combined with our recently completed metallurgical test program, and good infrastructure should allow us to advance this to a preliminary economic evaluation quickly as we expand the resource estimate.” stated Brian McEwen, VP Exploration and Development.

For more on the report – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

May 9, 2013: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF) has been advised by GTA Resources and Mining Inc. that initial results from the Phase 4 drilling program on the Company’s Northshore Property located near Schreiber, Ontario have successfully continued to expand the Afric Gold Zone. Results reported today confirm the presence of a north-east extension of the mineralized system into an area which has seen little historic testing.

Results also continued to demonstrate broad zones of gold mineralization along the previously defined east-northeast trending portion of the Afric Gold Zone, including 1.47 g/t gold over 70.0 metres in hole WB-13-38. Drilling also continues to intersect a series of higher-grade gold-bearing structures within the broader Afric Zone along both the Northeast and East limbs of the system.

To view a table of the results – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

May 7, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) welcomes the recent announcement by the government of Quebec pertaining to future legislation for mining taxation and royalties. The announcement will help to alleviate the uncertainty around taxation that has been prevalent in the Quebec mining sector for several months. The Government of Quebec has demonstrated a balanced approach that is sensitive to the challenges facing the industry, and which recognises the importance of maintaining Quebec’s status as a premier destination for mining investment.

Matt Manson, Stornoway’s President and CEO, commented: “We welcome the confirmation given by the government of Madame Pauline Marois today that it recognizes the important place of mining in the Quebec economy. The new system of mining taxation that is being proposed is a reasonable balance between maximising both taxation revenue and the type of returns that are expected by investors and lenders in an increasingly competitive world for mining capital allocation. Over the past few weeks, Stornoway has participated fully in the public consultation process for the new legislation, and presented the perspective of a major project developer actively engaged in mine project financing. With this review behind us, we look forward to advancing the development of Quebec’s first diamond mine.”

To learn more about Stornoway Diamond – CLICK HERE

CompanyFeed™

NEWS RELEASE.

May 6, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) has provided the results of the preliminary bench-scale metallurgical test program on representative samples from the Chinchillas silver-zinc-lead project in Argentina. Conclusions from the metallurgical report include, “The samples responded very well to sulphide flotation, with silver recoveries averaging 98.7%, accompanied by very high lead and zinc recoveries.”

“We are very pleased that this initial program indicates that we can expect excellent recoveries of silver and base metals using conventional flotation methods with standard reagents. These results, together with our upcoming resource estimate, will aid in evaluating the economics and viability of mineral production at Chinchillas,” stated Brian McEwen, vice-president of exploration and development.

For more on the metallurgical program – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

May 3, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) has received approval from the TSX Venture Exchange to complete the loan to Carlos Fernandez Mazzi, the company’s president and chief executive officer, to provide sufficient funds for Mr. Fernandez to purchase 750,000 units of Golden Arrow, pursuant to a private placement, at the price of 30 cents per unit.

Each unit consists of one common share of Golden Arrow and one non-transferable share purchase warrant. Each whole warrant will entitle Mr. Fernandez to purchase one additional common share of Golden Arrow for a period of 24 months at the price of 37 cents per common share. All securities issued are subject to a minimum four-month hold period pursuant to Canadian securities laws. The loan is non-interest bearing unless there is a default in repayment, and will be secured by a first-priority charge and security interest over the units acquired by Mr. Fernandez.

To learn more about Golden Arrow Resources – CLICK HERE.

CompanyFeed™

“Did you know you were getting the better end of that deal with Kinross?” I asked Lukas Lundin in his Vancouver office earlier this week.

“No No No,” he told me, “we thought it was worth more. You always love your own stuff.” Lukas laughed infectiously. Soon I was laughing along with him.

The Lundin organization’s $9.2 billion sale of Red Back Mining to Kinross Gold (Stock Profile – NYSE:KGC) in 2010 knighted the Sweden-born magnate into the Resource Hall Of Fame. For this was a deal that led to billions in writedowns for Kinross and the early retirement of Kinross CEO Tye Burt. Some say the sale was a sign of the times, perfectly encapsulating the excess that characterized the past decade’s resource bull market.

For the Lundins, it was a demonstration of impeccable timing. For their shareholders, incredible value was created — in all, they saw a 1041% return (total investment minus cash flows vs. final consideration).

*

The Lundins control exploration, development and production interests covering virtually every commodity around the world. For over 40 years, they’ve been one of the sharpest organizations in the sector, identifying exceptional resource projects, unlocking their value, and earning tens of billions for investors.

Family patriarch Adolf Lundin, who succumbed to leukemia in 2006, devoted the better part of his life to wildcatting, taking spectacular risks that eventually paid off.

In one of his first forays into the business in 1972, Adolf famously bet a Qatari Sheikh a million dollars it would rain the following day in the deserts of Qatar. The Sheikh accepted the bet and won. Shortly thereafter, Lundin was granted the licenses that led to the discovery of one the world’s largest gas/condensate fields.

With no guts, no glory as their family motto, the Lundins are just as comfortable in the jungles and deserts of Congo and Kurdistan as they are in boardrooms in Vancouver and Geneva. In 1992, with sons Lukas and Ian on board, the family invested $12 million in an Argentinian copper asset, Bajo de la Alumbrera. In 1995, it sold for $500 million. Today, the Lundin Organization controls mining and energy interests worth over $13 billion.

*

Success in the resource business takes three things, Lukas told me. “First — risk taking. Second — you have to be a giant optimist. Third — you have to be willing to go out there and do it. It’s easy to sit on a couch and talk about it, but then you have to actually fly to some crazy place and pick up the concessions and develop them.”

Some of Lundin’s views are not as conventional as you might expect of a corporate titan. For example, Lukas argues that demand for commodities is still strong, and the situation in Europe overblown. Most interesting is his forecast for America: “I think the US is on a complete tear. The next 10 years will bring the biggest economic boom you’ll see in your lifetime, because of free energy, a very flexible and productive workforce, and automation. You don’t need to send it to Japan and China anymore — you can do it at home.”

Investors will again see staggering returns in the resource business, Lundin predicted, but without a discovery, it doesn’t work. “Very few oil and gas and mining professionals — only a handful of people in the world — actually find deposits. It’s a mixture of art and geology.”

*

The Lundin Group is known for providing its technical people with the leeway necessary for trying out new ideas and making the important mistakes that can foster a mineral or energy discovery. Lundin Petroleum (TSX:LUP) recently tested a new concept in Norway on an area that had previously been drilled without success. Here they discovered an amazing 2 billion barrels of oil on the second go around, which Lukas believes are now worth over $12 billion. The market currently values Lundin Petroleum at $8 billion — not bad for an 11-year-old company.

Another Lundin venture, Africa Oil (TSXV:AOI), made a massive discovery in Kenya in 2012. The find resulted in yet another billion dollar score for investors.

But not all Lundin ventures are a resource investor’s fantasy. ShaMaran Petroleum (TSXV:SNM), the Kurdish oil and gas company, trades at just 31 cents. “That’s the one that’ll get you the biggest bang for your buck in the short term,” Lundin told us. “The Atrush Field we recently discovered looks really good. If we have success with the next well, and when we communicate our production plan, I think the company should be worth at least a buck a share. These are massive wells and the market just doesn’t understand yet.”

Lundin also has Blackpearl Resources (TSX:PXX) focused on heavy oil in Alberta. “The problem with the Canadian oil sector is the price differential due to lack of transportation,” he said. “In Eastern Canada, you sell oil for $90. In Alberta it’s $50. I don’t know why we’re not building a pipeline to the west coast. To rely on the US is crazy. With all the money we’ve invested in our oil sands, it couldn’t get much dumber.”

As for mining finance, Lundin sees things turning around in the fourth quarter of this year, but only for the best projects. “[Resource companies] have something like $50 billion of CapEx postponed around the world. Only the really good deposits will get financed for construction. What happens with majors is they buy everything at the peak and sell it at the bottom. It happens over and over.”

Over the next 18 months, Lundin Mining Corp. (Stock Profile – TSX:LUN) is hoping to take advantage of that pattern by buying the copper assets distressed majors are getting rid of. Lundin Mining was after the Pinto Valley asset sold to Capstone last week, but they’ll keep looking. “There aren’t that many buyers left. Capstone is probably out of the picture for a while, Hudbay too, and First Quantum has a lot on their plate, so it’s a very exciting time for us to look for assets.”

Lucara Diamond Corp (Stock Profile – TSX:LUC), the African miner, has done such a good job executing that the asset is performing better than Lukas expected. Unfortunately this isn’t the case for its stock price. “If you have a good asset and it’s doing well, it will reflect in the stock price over time. It has to,” Lukas told me. “We need another six months of production to show the market what we’re doing.”

On the Uranium front, Lundin’s Denison Mines (Stock Profile – TSX:DML) is focusing on the Athabasca Basin, having just acquired two smaller companies and spun off their US assets. The company is looking at additional acquisitions, and Lundin told me that he’s been very impressed with recent drill results coming out the Western side of the Basin. “I think it’s a very good time for us to grow the company in the Basin. We’re looking for more advanced assets, not drill plays.”

Lundin thinks it’s cheaper to buy development assets today than it is to explore for new deposits. Flat commodities prices mean fewer junior companies, but if there’s any movement in prices at all, more are bound to spring up. “It’s almost like driving through a desert. When it rains, it becomes green in a minute. The junior market is similar. When there’s positive news, suddenly, there are 50 new companies. It’s very receptive, there are a lot of people out there trying to make a buck, and we should encourage them.”

I asked Lukas for his take on the upcoming BC Election. “An NDP win is a certainty,” he said, “But that shouldn’t be too bad for Vancouver’s resource sector. How much worse can it get? It’s like kicking a dead horse!”

Should the resource business be privately financed, I wondered? Lukas believes there’s not enough private money. “Private equity can’t wrap their heads around the risks. Mining’s not like building a TV,” he said.

“One drill hole changes the game,” he continued, “It’s very hard to decide who gets to make it and who doesn’t. It’s a big gate, and yet very few can make it through. But you have to let them try, it’s healthy to have it public, as long as there are some rules, and not all the money goes to restaurant bills.” He went on, “It’s up to the investor to figure out what to do. To invest in the junior market if you’re not part of it, I wouldn’t recommend it. It’s very tough. There’s some good stuff out there but it’s hard, even in this market, to find good assets.”

Lundin also thinks Vancouver is losing a bit of its influence in the global natural resources business. “Have you been to Perth?” he asked. “It’s a town in the middle of nowhere with less than a million people, but internationally you always run into guys from Perth, they’re very entrepreneurial, and take a lot of risks.”

*

Of his peers in the business, Lundin complimented 36-year-old Timothy Young, an up and coming prospector. “Tim’s doing a good job. He’s smart because he’s not looking for a giant score, he exits, he’s very disciplined with what he does, and makes good money.”

“Robert Friedland has done a hell of a job. He works hard, has made mistakes. But he single-handedly carried all those land rushes, in Venezuela and Mongolia. It’s really incredible.”

Ross Beaty is another Lundin favorite. “Ross has all these crazy ideas about the world,” Lukas said affectionately, “and I disagree with basically all of them.” You could tell the two men are close.

I called on longtime Lundin lawyer and close business associate Brian Edgar, Chairman of Silver Bull Resources, Inc. (Stock Profile – TSX:SVB & AMEX:SVBL), to comment on what makes Lundin such a force. “Lukas doesn’t have a blackberry nor does he answer emails, his assistants handle that, but he has an amazing ability to grasp what’s important and ignore the minutiae. He is extremely loyal to his people and this loyalty is reciprocated. His powers of observation are as good as anybody I’ve ever met. Lukas can walk through a room in one minute and write down two pages of notes about what’s going on in that room. All of the skills you need for this business, he’s got in spades. His success has not come by accident or simply good luck.”

Veteran BMO Nesbitt Burns institutional equity salesman Colin Gibson, a friend and financier of the Lundins for two decades, added, “Lukas is very reliable, and he’s such a quick thinker. His incisiveness, curiosity and optimism are what sets him apart.”

Lundin doesn’t credit all his success to having guts. “You need luck, but you have to create a reaction to make luck. It also helps to be a great salesman, like Ross Beaty. The trick to being a great salesman is to never stop talking,” he laughed.

Lundin also had a piece of advice for promoters hit hard by the recent venture market meltdown. “If you have something of substance that’s really beaten up, don’t feel bad if your stock price was $5 and now its .50, and nothing has changed. You should go out and talk about it. This is our sector. Don’t hide.”

Lukas’s contagious enthusiasm shined bright throughout our conversation, as it has throughout his career. He’s got a lot to be excited about — his methodical risk-taking has paid off big. So here’s to Lukas’s optimism about the family’s current projects and the resource sector’s future as a whole. No guts, no glory.

Sentry manages over $10 billion in assets, representing over 300,000 Canadian clients, and has further received numerous industry distinctions. I had the chance to connect recently with one of Canada’s rising fund managers, Jon Case, portfolio manager with Sentry Investments.

Serving as co-portfolio manager to over $1 billion in precious metals and natural resource funds, Jon was kind enough to share some commentary on the challenging environment of the mining sector, and recent sell-offs in the price of gold.

Here are the written notes from that conversation:

TD: Jon, looking at the action over the last few weeks – anecdotally, was there anything that really shocked you guys there at Sentry?

JC: I think everyone, ourselves included, have been surprised by the magnitude of the pullback in gold, given that none of underlying drivers for gold have changed. With the benefit of hindsight some are attributing the sell-off in gold to ETF selling, a potential gold sale from Cyprus, and downgraded price forecasts from Goldman Sachs and SocGen. In our opinion, those events do not represent a fundamental change in the drivers of gold, and, therefore, they should have had [only] temporary price impacts.

Broad measures of liquidity (Federal Reserve Balance) show that the global balance sheet continues to trend upwards, with no end in sight (though recently it did decrease in size due to a reduction in the ECB balance from the return of LTRO funds – however, we expect this reduction to be an aberration in the rise of global central bank balances, with US and Japan poised to expand their balance sheets at a rate that will more than offset ECB losses). Economic data points such as GDP, non-farm payrolls, and retail sales continue to show an economy that is barely growing (despite massive government stimulus in the form of deficit spending). Lastly, speculative positioning in the gold futures market is at a relatively low level, in the context of the range of positioning over the last four years.

TD: What do you make of the conflicting message we’re seeing in gold – in terms of the paper markets selling off so strongly, but yet retail buyers flooding the bullion shops worldwide…what are your thoughts there? And do you see any similar institutional rush?

JC: The futures market overwhelms the physical market in value, so imbalances in the supply/demand dynamic in the latter have a tough time pushing around the former over small time periods. But over a sustained period of tightness in physical supply vs. strong demand, price would respond, and the paper market will follow suit. We track the supply/demand dynamics in the paper market by looking at the shape of the forward curve and the Commitment of Traders report; and in the physical market by looking at the physical premiums paid for gold delivered to India and China—the main sources of demand in the physical market.

On the physical front, we are seeing evidence of very strong physical demand coming from Asia, with premiums of $2 – $3/oz. in Hong Kong, which is why we believe gold bounced off its lows. Whether that demand will continue to persist as gold pushes higher is not as clear, and there is some evidence of physicals premiums dropping off at current levels with gold up $125/oz. from its lows (at time of writing). This is not surprising, given that retail demand is highly price-sensitive, especially in India.

As for an institutional rush into gold, I don’t think that’s likely until we see some price stability, or until negative changes in other asset classes drive funds into gold. We believe the recent high volatility could discourage institutional activity over the near term, and, therefore, we expect gold to consolidate in a range for a few months, before we see it resume its climb higher.

TD: And the mining shares Jon – they’ve been mutilated. Is this the end of the mining industry, or possibly one of the great markets that will be written about for years to come?

JC: There are tremendous opportunities to be found in the gold equities; however, the opportunity is not uniform across the sector, which is to say not all the gold equities are cheap. The sad reality is that weak price performance of some gold producers is justified, given that many cannot make positive free cash flow at current gold prices.

In 2012 we estimate that the four largest, publically listed gold producers on North American exchanges, which represent 41% of the total capitalization of all publically listed gold producers in North America, generated –$3.0 billion in free cash flow. In gold terms, that’s equivalent to saying the YoY change in their balance sheets reflected a cost of gold production of $1,839/oz. in a year where gold is $1,669/oz. So with gold off 12% YTD, some investors may see the drop in the broader gold equities of 35% as an opportunity, but in certain cases value has dropped by a similar or greater amount: if they weren’t profitable at $1,700, their prospects look dim at $1,450/oz.

On a more positive note, there are real businesses in the gold space that generate strong free cash flow at the current gold price. The recent pull-back in the equities has been more or less uniform – all gold equities have been painted with the same brush – and the result is an over-reaction in the share price declines of the top-quality producers, where the pull-back in price represents a gross exaggeration of the erosion to their profitability.

We are seeing valuation levels never seen before, with some gold producers now carrying free cash flow yields (implied by their current capitalization) at spot gold price in the double digits (10% – 15%) – a unique buying opportunity.

TD: As a final question Jon, you guys have some of the world’s top fund managers working there at the firm—what would you say might be the the overall fund consensus about this environment that we’re in?

JC: Kevin MacLean, my colleague, and the lead portfolio manager on Sentry Precious Metals Growth fund has been managing investments in the gold space since the 1980s, so he has seen multiple cycle peaks and crashes in gold and gold equities. His message is that he has seen this before—it’s quite common for the sector to look broken at the bottom, and that’s always the best time to buy.