VRIC 2020: What Will Move Gold, Expert Investing Tips and More

Precious Metals
Gold Investing

This year’s Vancouver Resource Investment Conference is over — here’s a rundown of three key themes that emerged at the show.

This year’s Vancouver Resource Investment Conference is over, and the Investing News Network was on the floor interviewing thought leaders, attending panels and speaking with exhibitors.

Held from Sunday (January 19) to Monday (January 20), the annual event, now in its 25th year, brought together mining companies, newsletter writers, the media and — of course — investors.

Read on to learn about a few of the main themes that emerged during the show, and stay tuned as we begin to post video interviews and other coverage from the conference.

Long-term (not short-term) factors will move gold

The gold price went on an impressive run in 2019, rising from less than US$1,300 per ounce to over US$1,500. Three weeks into 2020 its positive performance has continued, with the yellow metal topping US$1,600 in the wake of a spike in tensions between the US and Iran.

Though it’s cooled off since then, gold remains above the US$1,550 level, and many high-profile market participants at VRIC expressed optimism about its trajectory in the new year.

In fact, despite the exciting price activity being experienced by other precious metals — particularly palladium, which has rocketed to repeated new highs — a large number of industry insiders feel gold’s story will be the most interesting to watch this year.

EB Tucker of Casey Research and Metalla Royalty & Streaming (TSXV:MTA,OTCQX:MTAFF), who predicted well before it happened that gold would hit US$1,500 last year, reiterated at VRIC that he sees gold topping its previous high in 2020.

Tucker is also still waiting for silver to make it over US$20 per ounce, a move he has previously described as an easy trade for investors to make and profit from.

Interestingly, for the most part those commenting on the yellow metal emphasized that factors like the US-China trade war, US-Iran tensions and the upcoming US election are less important drivers for gold than deep, underlying issues like debt in the US, interest rates and the performance of the US dollar.

Times have changed, but investment strategies shouldn’t

Investors who have attended a mining conference before may be tired of hearing the same advice from the same speakers. But according to at least one of those pundits, there’s a reason for the repetition.

When asked on the sidelines of the show how investors should react in light of events like the trade war, the potential for an actual war and the election, Mercenary Geologist Mickey Fulp suggested that business as usual is the best path forward.

In other words, due diligence and other best practises for investing in mining stocks shouldn’t fall by the wayside just because of what’s going on in the world.

Fulp wasn’t the only one suggesting that investors stick to tried-and-true principles. In a workshop focused on private placements, Rick Rule of Sprott (TSX:SII,OTC Pink:SPOXF) shared a slew of tips that apply to resource investing in general.

Brent Cook of Exploration Insights also dropped some familiar kernels of wisdom in a talk at the show. His main point was that investors need to hone in on data and be willing to ask companies tough questions — those who can use that approach to successfully determine when to get in and out of a stock should be able to reap the rewards.

Canada losing shine as a mining jurisdiction?

VRIC’s headline event was Sunday’s keynote from financier and author Lord Conrad Black, who took the main stage to speak about Canada’s natural resource sector.

In a wide-ranging talk, he shared a brief history of the country before moving on to discuss ways that it could be improved, both as a whole and in terms of the resource industry.

Black stayed on stage for a Canada-centric panel discussion led by Jay Martin, president of Cambridge House, and also featuring Peter Brown, founder and former chairman of Canaccord Financial (now Canaccord Genuity Group), and Neils Veldhuis, president of the Fraser Institute.

The trio identified a slew of problems with the nation’s approach to the resource industry, with Black stating that the country is doing a poor job harnessing its potential.

“We’re … strangling our leading export revenue producer, and we’re doing it for (trendy) reasons that are stupid and unjustifiable.” Black was speaking about Alberta’s oil and gas industry, which he said is being hurt by the Canadian federal government’s focus on climate change, among other things.

Climate change is attracting increasing attention in the resource space due to interest in environmental, social and governance (ESG) investing, and is a key topic at major events like PDAC. There are currently close to 200 signatories to the Paris Agreement, a deal aimed at decreasing greenhouse gas emissions.

Ultimately, the three panelists ended on a positive note, suggesting that a return to better days in Canada is not only possible, but also not that difficult.

“What we have right now is we have a really great opportunity that we have just mismanaged,” said Brown. “We need to change management here, and we need to come back with a much broader plan … it’s almost a rudderless government.”

Even Black offered a positive stance on Canada’s future. “Tweaking the tax structure and a little discipline on how we spend the money, and ending the attempt to strangle our greatest industry … if we just did that, we’d resuscitate things quite well,” he said.

Stay tuned for more coverage of VRIC, including video interviews with many of the experts mentioned above and overviews of talks and panel discussions.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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