We have David Baines of the Vancouver Sun to thank for a new story on mining investment gone bad. We use this case history to formulate another Investment Rule: Do not buy shares in a mining company controlled by one man. (more…)
Archive for October, 2009
Design is the art of applying the principles of science in formulating practical solutions to real-life problems. Design is the act of coming up with a cost-effective way to build and operate a physical structure, whether it be a bridge, a building, a tailings impoundment, a heap leach pad, or an access road to the new mine. Design is an act of creation; a good design comes seemingly out of nowhere; yet a good design comes from everywhere, being a reflection of past practice, knowledge, understanding, calculation, perspiration, inspiration, and judgment. (more…)
If you invest in mining stocks by the numbers and trends, you must read the article in the October 12, 2009 New Yorker. The article is called The Secret Cycle. I provide a copy of the summary of the article at the end of this posting. The complete article is at this link.
The story is that of Martin Armstrong. He concocted a theory of economic cycles and used his theory to grow rich investing in gold. That is until he was imprisoned for running a Ponzi scheme. Still in prison, he writes long articles on the cycles that “govern” investing. You can read most at his website at this link. A bizarre collection of ideas.
The funny thing is many in mining and investing believe in cycles. Recall Douglas B Silver and his Super Cycle that graced the pages of the SME magazine and conference last year–before the economy changed. I remarked on all this in a previous posting .
After the past few months, can anybody still be a believer in mining cycles? We will have to come up with new theories to explain what drives mining and investing. I write about my theories at this link: it boils down to managerial and technical competence and incompetence.
Here is the summary from the New Yorker site of the article on investment cycles: (more…)
Idle travel has me in Elko, Nevada after two days in Reno. Reno is ringed with hills that you spy vaguely through the look-alike office buildings sprouting in impossible green lawns and standard nursery flower beds. In Elko the mountains dominate the landscape and thankfully there are no artificial lawn and flower beds. This is the honest center of farming, ranching, mining, and gamblers fleeing Utah. (more…)
A true story. A young mining engineer asked his consultant: “Why are you so worried about putting your professional engineering stamp to this design? ” The crusty old consultant snarled back: “Because if the structure fails, the shareholders could sue the mine, you, and me.” I interjected that there are class action law suites pending against those involved in Galore Creek and Bellavista. This brought silence to the room. The young mining engineer agreed to the necessary testing and analysis. (more…)
Last I was in Edmonton, my host exclaimed loudly when his Blackberry told him the ERCB were going to have on their website all the documents submitted to tell how oil sand companies will reclaim and close their tailings impoundments. That promised to be a signal day in the history of tailings impoundment closure and regulatory (more…)
Does ICMM have a comment on Vedanta and their mining practices in India? Namely planning to cut down the trees that are sacred to the local tribe and then proceed to mine? Now the British Government has told British-registered mining company Vedanta, owned by an Indian national turned Brit, that they have been behaving badly. (more…)
A week of flights and meetings: Vancouver to Fort McMurray to Edmonton to YVR. Long discussions around tables and papers flying fast and furious. We argued how to cap an oil sands tailings impoundment. We were held up by arcane arguments about strength, density, analytical method, material purchase, equipment selection, and the opinions of the local regulators—all of whom seem to think we are doing something new. (more…)