Blue Skies, and Unbridled Upside: Continued PDAC Coverage

Today, Kevin McElroy, editor of Wyatt Investment Research's daily e-letter, Resource Prospector, will share some of his insights from the Prospectors and Developers Association of Canada (PDAC) International Convention.

"I'm here in Toronto writing live from the Prospectors and Developers Association of Canada (PDAC) conference.

Tyler Laundon and I are working closely together to find promising mining companies to write up full research reports for Wyatt Research readers such as you.

It's easier said than done. The PDAC conference is the largest mining conference in the world. Hundreds of companies are here, vying for attention. Many of them are tiny companies.

Despite the well documented challenging track record of mining success (only 1 in 3,000 firms ever builds a mine), everyone we talk to is all smiles, full of vim and glowing with confidence.

For instance, we met face to face yesterday with a small western firm with good looking resources in an area not currently known for gold mining. It's a small company, less than $100 million market cap. They're trying to get permitted to build a small mine at this point.

They haven't produced a single ounce. They don't have a mine built. The area they're in doesn't have a ton of gold mining going on currently, although there are some mines in operation. The government they're trying to secure permits from is not known for being quick-moving or especially friendly to gold miners. Sounds like a recipe for difficulty, at least.

But the gentlemen we talked to were adamant. Nothing but blue skies. No limit to the potential. Lots of upside.

He could be right. We're doing our research to find out and will let you know what we find.

*****We're also looking into a small African country's mining industry. Ten years ago no one had heard of Burkina Faso, let alone started building mines, let alone producing gold!

As you may know, it takes between five and ten years to do the kind of preliminary work, testing, drilling, permitting, surveying and finally building to get a mine from an idea into production.

But the Burkina Faso government has made mining a top-line priority. It's now one of the most mining friendly countries in the world, with practically no bureaucratic difficulties for companies in the area to find the gold and dig it out.

That's important, and it can make a less-than-stellar deposit become more valuable than it might be in an area where the government is ambivalent or hostile to the mining business.

*****I know as soon as I mention Africa that some people just shut down their emails. The Vice President of Marketing here at Wyatt Research has a minor stroke every time someone mentions Africa. For some people, Africa evokes images of bloodshed, corruption, wild lands, brutal dictators, and more recently, rebellion, rioting and civil war.

Or maybe they think of Joseph Conrad's novel "The Heart of Darkness" or the modernized film edition "Apocalypse Now."

In either case, the main antagonist in the story dies at the end, uttering the words "the horror...the horror."

And while he's not speaking those final words because he's in Africa, it's an image that sticks with people: when they think of investing in Africa, they think of losing all of their money down a horrible hole.

But that's a naïve way to look at Africa, and the world in general.

If you keep your head about you, you're no more likely to get fleeced from an African investment than you are an American investment. By avoiding Africa, you're not avoiding risk - but that's how some people look at the situation there.

For now, I'm really excited about some of the opportunities in Africa in general and Burkina Faso in particular. It's in the Western Africa region that's home to some of the largest, oldest, best producing gold mines in history. And moreover, it's more or less unexplored and undiscovered by modern mining techniques. The companies in this region are at the front of the line, and they're proving that there's plenty of gold in Burkina Faso's hills.

We'll flesh out our research on these firms and publish some specific recommendations in the coming weeks.

But for sure, don't turn your nose up at Africa. It will likely be home to some of the best investment opportunities in the coming years." - Kevin McElroy

Additional coverage of the PDAC can be found here:

Live From Toronto - The Biggest Mining Conference in the World (EXK)

Silver and Gold Rule the Stage