Prime Meridians - The Pierce Points Weekly Projects Letter

This week in Pierce Points:

China reconsidered a ban on bad coal. The world’s biggest consuming nation may look to outlaw low-quality imports, with big implications for pricing.

U.K. jewelers used 40.4% more silver. Industry reports showed lower prices are spurring increased use of precious metals.

Big investors looked to natural gas. Private equity giants Carlyle Group are reportedly considering a $2 billion asset purchase from major producer EnCana.

LNG imports unexpectedly leaped. Shipments into China surged 76.2% in January, driven by rising consumption of natgas across the country.

Today’s Top 3 Most Critical Resource Trends

Here it is. Hot off the press, the latest issue of Boundary Conditions, Q2 2014.

I’ve been discussing these themes in meetings with many of you the last few weeks. Highlighting this quarter’s three top trends, and what they mean for new project development.

On the energy side, the biggest story is emergence of next-generation drilling technology. That’s allowing oil producers to drill faster and more accurately—unlocking billions of barrels in new reserves in places like the Gulf of Mexico Shelf.

This is going to spread to other parts of the world. Creating new discoveries, and valuable expansions of existing oil fields. If you’ve got access to stacked, clastic reservoirs, this is a must-look opportunity. Drop me a line on ideas.

In minerals, two stories jumping out as critical right now.

One is platinum. Where big producers are getting increasingly edgy about the future.

With labor tensions in South Africa still high and rising, platinum companies are asking: where in the world can we find new deposits?

There aren’t a lot of easy answers. The problem being a lack of established and expandable primary production outside of South Africa, Russia and Zimbabwe.

Those nations are going to remain relevant. But mining companies are today looking for additional exploration prospects—with an urgency they’ve never shown before. Leading to some unusually high-concept programs in unexpected parts of the world. More details in the presentation.

This is a great opportunity for platinum exploration. I’m looking globally for new districts that have the right “ingredients” for major deposits. Regional fault systems capable of tapping mantle plumbing—along with reducing horizons like coal or black shales that increasingly appear to play a critical role in creating big deposits like Norilsk. If you have an interest or ideas on particular rocks to be turning over, I’d love to hear them.

The final theme is a familiar one to daily readers—India’s surging coal demand.

Indian imports of thermal coal and showing few signs of slowing down. And over the last two months we’ve seen increasing signs that major exporting nation Indonesia is going to struggle to grow supply in 2014.

That could mean a pinch point coming for the global thermal coal market. It also has the potential to make coal deposits within shipping distance of India very valuable.

Increasingly, I believe East Africa is the place to look. Thanks to those of you who’ve helped recently on sourcing projects here. If you’ve got leads in this part of the world, now is the time to aggressively push them forward.

As a final note, I’m planning a few swings over the next few months to discuss all of these ideas. South America looks likely for early August (Brazil, Colombia and Chile at the moment). Asia (Hong Kong, Bangkok, and perhaps New Delhi) may be a go in June.

The schedule is as fluid as it’s going to get right now—drop me a line to discuss an in-person presentation on Boundary Conditions, a sit-down on projects, or both.

Here’s to pushing the boundaries,

Dave Forest

dforest@piercepoints.com