Canada's Regulatory Regime

A lot of focus on regulatory regimes where commodities producers are being nationalized, or permitting issues are front and center have erased any consideration for deregulation in what is probably one of the most important mining stock exchanges in the world.

One country went out of its way to systematically destroy mining in its own country with a regulatory move that nobody noticed. That country is Canada. The 'no-down-tick' rule was abolished, meaning that anybody selling a stock without first owning it was not required to report that they did so, making it appear as if the stock was merely being sold into the market.

If you have a hedged or arbitraged position, (short-hand for derivatives) you do not have to report the short sale. The accumulated short sales on your account of any particular stock is held on balance as a hedged position. As a commercial banker, you would accumulate massive hedged positions across almost all asset classes, not just particular stocks.

As a miner producing commodity goods for the economy, not only do you pay ~35-40% tax for the priviledge of having the DFO bureaucratically vandalize your mining project, and wait several years for the permitting issue to resolve, but you are also bending over while the government positions your behind for a massive paddling at the hands of the commercial banking sector. (Do we need to remind people that this conservative government exists solely for the banking sector, to lovingly kiss its behind with shake of talcum on top?)

Nobody that I know of in the investment space that have been touting gold miners as an investment seem to even have the slightest clue about this key issue. NOBODY.

A second issue of concern is that while being intellectually lazy and jumping at the chance to blame management, the entire investment crowd in the gold sector made a fatal assumption, that gold mines would suddenly come to life should gold go over a certain price. That price has not yet been reached.

Paying a dividend is not solely for the benefit if the investors making demands, but would change those basic assumptions of those hedged positions and introduce arbitrage risk into the share price. It would benefit mining stocks, because they all have warrants and options on the books needing to be cashed.

MineWeb - Tocqueville

-F6