EAST ASIA MINERALS
Today was recognition that it is a new, new world out
there as India suggests their economy is now chugging
along at 7% GDP growth rate and they feel that within two
years, it will be back up to 9%.
It definitely is a new world out there as China, India and
Asia chug ahead, while the United States looks like it
could be mired in a bit of mess for years to come and
Europe, the old, old world, has too many countries with
too much debt problems.
Of course today making it an almost perfect world was
Greece looking like they are going to do what they have to
do to get their budget in line because after all, wouldn’t it
be embarrassing to have such a historical country declare
bankruptcy down the road.
With all the good news out today, it was a near perfect
day in the markets as oil for a while was above $80.00;
gold was flying and once again, it’s a reminder that as
long as the Indian, Chinese and Asian economies chug
along, our little sector of the world of metals, mining and
oil and gas can still be a profitable niche to be in.
Meanwhile, time to catch up with David Coffin, the Van-
couver-based editor of the Hard Rock Analyst because
East Asia Minerals comes up with another sweet result an-
nouncing 3.2 grams of gold over 61 metres within a much
bigger section of 116 metres of over 2 grams per ton gold.
Coffin suggests that this is just “more of the same in a
market that is still a little bit soggy.” “They keep building
up the resource” he suggests, “slowly and steadily.” We
ask, are they going to be hit like many other stocks with
the curse of PDAC?
Coffin replies that no, he is still more concerned with
tightening financial conditions in China and he doesn’t
think that the debt crisis is over.
Meanwhile, Coffin who had a great seat watching all
the developments on the Olympics, as he could see
Robson Square and the happenings right from his office
window. He takes his hat off to the volunteers of the
Olympic Organizing Committee and suggests that Robson
Square, with the fireworks every so many nights, the free
bands almost every night, all helped it make 17 wonderful
days. He suggested that the weather, which was so un-
usually warm and hurt some of the snow conditions, actu-
ally helped everyone get into the mood and party in down-
town Vancouver.
It truly was folks, an event Canada will be proud of for
some time...
OIL
(V-TAO)
As we mentioned earlier, it’s an almost perfect day world-
wide for the economy and it’s a time that Peter Tertzakian,
Chief Energy Economist at Arc Financial does a look/see at
the oil and gas sector.
He has quite a profile as the author of several books on
energy, but yesterday on a piece he writes, “Back to A Thou-
sand Barrels a Second...After over 18 months of crisis and
recession, world oil consumption has recovered back to
where it was at its pre-crash peak. Numbers published for
December 2009, and January 2010 show that demand for the
wonder-fuel once again touched 86.4 MB/d, or A Thousand
Barrels a Second. It’s a milestone rate-of-consumption that’s
tough to fathom, but can be envisioned by imagining an Olym-
pic sized swimming pool being drained every 15 seconds.
Admittedly, a metaphor from the winter Olympics would be
more appropriate, but frozen liquids don’t flow.”
Tertzakian continues, “A quick conclusion stemming from
this recovery in global oil demand is that one of the primary
pillars supporting positive price momentum is back in place.
That’s true, but consumption is only one pillar. The next indi-
cator that has to start aligning into place is a gradual decline
in OPEC spare capacity. It’s a likely trend; analysis shows
that the current 6.5 MMB/d capacity surplus, twice what it was
18 months ago, should start retreating again by year-end, po-
tentially by up to 8%.”
He continues, “The third pillar of oil price strength, produc-
tion declines among non-OPEC producers, is going to take a
little longer. Nevertheless, two out of three supporting factors
should be enough to gradually reinforce prices by the latter
half of this year.”
He continues, “While the barrels appear to be lining up for
higher prices, it’s too early for Canadian oil producers to pop
open the bubbly. That’s because the character of global oil
consumption, and the dynamics of oil supply, have shifted
over the past year and a half.”
Tertzakian also points to China noting, “China’s year-over-
year oil use continues to lead the emerging world’s uptrend.
Recent numbers continue to validate that world oil consump-
tion is going to grow by another 1.15 MMB/d in 2010. Impor-
tantly, none of the increment will come from North America,
the European Union or Japan.”
Meanwhile, for those looking for ultra-high risk, hopefully
high impact drilling plays, we featured recently, a pick by
Clive Stockdale, the analyst that some time ago got us into
Ultra Petroleum, one of the biggest plays we probably ever
been involved in. He now says Tag Oil is one to watch.
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