We noted in the last issue that pull backs in resource stocks seem to follow on the heels of the PDAC. The conference is often held a little later in the month of March, and it coincides with the largest freeing up of private placement stock most years. That coincidence of timing is a big part of the reason for the pullback.

Given that this is common knowledge, how hard would it be to hold PDAC in September, say a week or two after Labor Day, following the old saying?

Something else I'd like to see is a PDAC ratio - that is, the number of companies attending vs. the number of attendees. Does anyone track this?

There's another number I'd like to see, although I doubt anyone publishes it. It's the ratio of new subscriptions to cancellations in the letter writing trade.

Both numbers would give you some idea of how much money there is to go around, and how thin it will be spread.

It's all about supply and demand, including the supply of companies vs. investors. On the company side we've had a fairly long run, and you can expect a larger number of low quality companies the further out you go. Nothing new here, happens in all bull markets. Think Pets Dot Com.

On the investor side, how many were taken down in 2008/9 and either never recovered, or left the game in search of safer pastures? Bear in mind this cohort roughly matches the boomer demographic, many of whom are now retiring and cashing out. New money coming in (those that can actually find work) isn't going to mining stocks so much as managed funds. You have to have a certain amount of discretionary income plus a penchant for risk to play in our sandbox. So, how many of us are left?

While I'm being gloomy, there's yet another factor to consider. The back-story on mining is similar to peak oil. Mammoth discoveries are becoming as rare as, well... mammoths. How many district plays of any significance have we seen compared to former times, and how many of those have been snuffed out in their infancy by bad politics? Spin is a big part of the marketing in our sector, but aside from the Yukon (which is mostly spin) where are the new discoveries? These days most companies are chasing known low grade ounces in open pit scenarios. You need a lot of ounces to make that work and you don't get the same excitement (spin) as from a high grade strike like Aurelian, with all its implied potential.

Just some thoughts to ponder. I'm not completely down on the sector, I just think it requires more attention to detail and more realistic expectations than in prior times. A gold price that holds above $2000 would certainly help, but that's beyond my ability to predict, so I'll just leave it at that.

ebear