Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 1% and 2% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 17 2017
By: Ira Epstein

Next-Generation Crazy: The Fed Plans For The Coming Recession
By: John Rubino

COT Gold, Silver and US Dollar Index Report - November 17, 2017
By: GoldSeek.com

Gold Miners’ Q3’17 Fundamentals
By: Adam Hamilton, CPA

Bonfire of the Absurdities
By: John Mauldin

The Social Security Inflation Lag Calendar - Partial Indexing Part 1
By: Daniel R. Amerman, CFA

Rob From The Middle Class Economics
By: Gary Christenson

GoldSeek Radio Nugget: John Williams and Chris Waltzek
By: radio.GoldSeek.com

The Metals Market Is A Mess And Will Likely Continue To Frustrate You
By: Avi Gilburt

 
Search

GoldSeek Web

 
Eric Lemieux: What Does 2014 Hold for Metals?


 -- Published: Wednesday, 22 January 2014 | Print  | Disqus 

Eric Lemieux, a mining analyst with Laurentian Bank Securities in Québec, is a realist, which makes his optimistic outlook for miners in 2014 that much more compelling. Lemieux believes that with the wheat separated from the chaff over the past tumultuous year, the truly strong companies have emerged. But you may be surprised by his predictions for 2014. Lemieux makes some startling, but happy forecasts in this interview with The Gold Report.

The Mining Report: Eric, your top stock pick in 2013 outperformed the S&P/TSX SmallCap Index. What's your recipe for picking stocks in 2014?

Eric Lemieux: The secret to success in picking stocks in 2014 will be simple: management. The senior vice president of Laurentian Bank Securities, who recruited me, asked me a question during my interview way back in 2007: What was the most important element when I was looking at a company? I started to talk about some financial ratios, etc. He began to laugh. He said there are three things: management, management and management. I know that's easy to say, but it is true. It is the team that's behind the company. That's the most important secret for success.

TMR: You're predicting an average gold price of $1,400/ounce ($1,400/oz) in 2014. That's down from the previous estimate of $1,750/oz. Nonetheless, most observers would call $1,400/oz optimistic given the current spot price. What gives you confidence that the gold price will rise in 2014?

EL: I'm fairly optimistic. The price of gold is gravitating around $1,200/oz, so there's a substantial difference. I'm looking at the global picture. Yes, the price of gold has gone down, but it's approaching a floor of production costs. By midyear the price of gold will be higher.

TMR: Many of the companies you cover operate in Québec, which just passed a new mining act. Is that good news for investors?

EL: By and large, all this is good news for companies operating in Québec. It's not perfect. There are a few irritants, but it is a middle ground—a relatively well-balanced law.

TMR: An application for a mining lease now requires a feasibility study. What do you make of that?

EL: Well, feasibility studies are necessary. A company needs to go through the steps of a feasibility study for the normal process of calling a mineral reserve and getting financing, etc. The industry has to realize certain levels of obtainment and it is a normal process to have feasibility studies to receive the proper permits to achieve the proper level. The new act (as amended) states that an application for a mining lease must be accompanied with a scoping study and market study; note that previous Bill 43 had proposed a feasibility study for securing second and third transformation. The new dispositions are fair and less burdensome.

TMR: Does Québec remain the best jurisdiction in Canada in which to operate a junior mining exploration company?

EL: I would simply say no, but I would point out the positive is that Québec has stopped dropping in the standings. We've gained clarity with the Québec mining law and royalty revisions. All in all, we're not the best jurisdiction anymore, but at least we're not falling down the slope.

TMR: What would you say is the best jurisdiction?

EL: This is an ever-evolving element. What is considered the best jurisdiction today could not be so a year from now. Québec is a case-in-point. It was one of the best jurisdictions a few years ago and it slid down. At least with the passage of the royalty and mining law, the worst is over.

TMR: Despite your optimism for precious metals, you've rolled back almost all of the target prices on the companies you cover, some by as much as 35%. What prompted that action?

EL: General market sentiment has obliged me to remove or decrease substantially my exploration goodwill, which was a proxy of the quality of the teams, the quality of the projects and the general market sentiment. I had to bring that goodwill down, and for certain explorers I had to completely remove it. Having said that, companies that are well managed, have a good portfolio of projects and are able to sustain a minimum of activities will be poised to bounce back eventually. Although I brought down the target price, I kept my recommendations. That's a powerful statement. I just needed to effectively downsize some of the expectations.

TMR: What's going to keep you optimistic in 2014?

EL: I'm optimistic. It was a difficult year for the mining industry in 2013. The fundamentals are still strong and the long-term story is solid. I believe that this will be able to set in during 2014. Companies have been tightening their belts and streamlining operations. Juniors are going back to the basics. There's no more waste. There's been a reality check. The companies that have been able to survive and sustain a minimum of operations and activities are going to be set for 2014.

The mining industry is a necessity. There's always a reason to go out and search for metals and commodities because the population continues to grow and needs resources. It may be through electronic devices. It may be through food or infrastructure. The overall portrait is interesting and positive. I'm optimistic for 2014.

TMR: Thanks for chatting today. I've enjoyed it.

EL: You're certainly welcome and as we say in French—merci!

Eric Lemieux is a mining analyst who joined Laurentian Bank Securities in 2008. He worked for nine years as a consultant responsible for applying Regulation NI 43-101. He has worked at the Montreal Exchange, and prior to that managed exploration projects for Cambior, Noranda and Soquem. He holds two masters degrees, in mineral economics from the Colorado School of Mines and in metamorphic-structural geology from Laval University.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:
1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor.
2) Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Eric Lemieux: I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise - The Gold Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Gold Report. These logos are trademarks and are the property of the individual companies.


| Digg This Article
 -- Published: Wednesday, 22 January 2014 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.