Filtering the Opportunities and Location of Mining Properties
Commodities / Metals & Mining Oct 25, 2007 - 08:18 PM GMT
There are literally no geographical boundaries for companies in search of natural resources. Nearly every country from the United States , Peru , Ecuador , Brazil , Argentina , Venezuela , China , Turkey , Mexico and even under the ocean floor, offer the potential for incredible opportunities.
Opportunities in some these foreign countries do not come without some risk. As investors we must be aware of and consider the political climate of each company with mining properties. We must weigh this potential ‘geo-political risk' with the potential gain to be derived.
Most notably we think of Venezuela and Chavez, but recently we have witnessed other decisions (at least short-term) adverse to mining companies in Turkey and Columbia . This important investment decision should be carefully considered before committing your hard earned dollars investing in the mining shares.
To us, the areas most favorable to mining activity are Canada , Mexico , Australia and the United States , specifically, the State of Nevada . Investors concerned of the ‘geo-political risk' may wish to limit their investments to these countries.
Another area of risk is the currency risk. With the U.S. Dollar teetering with all time lows this represents good news and bad news for mining companies, depending on the location of their properties.
The Canadian Dollar is hitting highs and the Australian Dollar not far behind. What this means is the cost of labor, supplies, etc priced in these currencies makes the bottom-line less attractive. We continue to invest in shares in these countries but caution investors to the effects of the currency on the cost aspects of doing business in those countries.
As the U.S. Dollar hovers near lows, it seems to us this represents a great opportunity for say, Canadian based mining companies. The costs are actually dropping doing business in the U.S. , at least from the currency perspective.
We see the same scenario for Mexico where the Mexico Peso has dropped along with the U.S. Dollar. As a side note, living in Mexico , we see the exchange rate for the Peso to the U.S. Dollar
Stay rather constant. What most Americans living here do not realize is that the Peso is dropping like a rock just like the U.S. Dollar.
In conclusion, we see the best potential opportunities (currently) for those resource companies doing business in Mexico and the United States , specifically, Nevada . We suggest the mining shares and long-term warrants trading on those companies.
For those readers interested in education and information on warrants, we encourage you to visit our website where you can now signup to receive our Free Saturday newsletter which is appropriately titled, The Warrant Report .
Dudley Pierce Baker
Guadalajara/Ajijic, México
Email: info@preciousmetalswarrants.com
Website: PreciousMetalsWarrants
Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much, much more. We do not make any specific recommendations in our service. We do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders.
Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.
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