Local Snow Lake Article

Copper-zinc exploration in the Flin Flon-Snow Lake VMS Belt

Recent Results Include 6.69% Copper Over 71.69 Metres and 3.74% Copper Over 21.77 Metres

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articsun55

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Local Snow Lake Article

in response to

DJ BHP Confident Of Commodity Demand Despite Volatility

Aurony

posted on Sep 17, 2008 07:21AM

Despite the market carnage, it is business as usual in Snow Lake and this is a very positive indicator!

Volume 12, Issue 19 Snow Lake Manitoba September 18, 2008

Boom or bust... it depends

HudBay's Chisel North Mine ~ photo by Marc Jackson

t seems it’s all about who you want to listen to or believe in relation to both the short and long term outlook for the metals that fuel Snow Lake’s economy. Zinc, Copper, and Gold... all three lie in great abundance below the forests and overburden of the prolific

Snow Lake camp. However, will they languish beneath the surface, or be brought above to take up their rightful place in the homes, cars, and jewelry boxes of the nation, and the world?

In some instances, the heady days of discovery holes and drill results have given way to speculation on whether mines will result in the near or not too distant future. Others surmise that

markets and supply will be fine,

but raising the cash to do anything with either will be the challenge.

According to Daniel Sacks, Investec’s AAA-rated gold fund manager, A rising dollar and falling

oil prices is the fly in the ointment for gold producers, while André C. Tessier, CEO of Murgor Resources says that instability in the world economy, fuelled in part by the raising price of oil, has brought a lack of investor confidence and

volatility to the base metal market.

In that line of thinking, CHR Metals which is an Internet-based provider of analysis on the lead and zinc market; say that while there may be the occasional upward movement in the zinc price, the current downturn will continue for the next three years at least. "At best, work on some new projects may cease in response to a drop in the price, and thereby ease the downward trend," they stated in a web based news release. "Zinc prices are expected to remain at or around current levels until the turn of the year, but as new production comes on stream, they could begin a long-term decline," they added.

As gloomy as that outlook

reads, a few more clicks of the mouse can bring up one that is a little more palatable. BMO Global Commodity Strategist Bart Melek says that "Rising cost structures, equipment and skilled labour shortages all give support to the BMO thesis that the short- and long-term metal prices are not likely to revert to historic means as long as the global demand outlook remain intact." Melek has forecast that global demand for many metals and bulk commodities, including copper, zinc, and metallurgical coal, is expected to grow as much as 40-50% over the next decade. "Since supply is proving to have a very hard time keeping up with demand growth, metal and bulk commodity prices appear well supported over the long term," he said.

And in relation to the gold markets, ABN Amro Asset Management's François Mouté, thinks the gold price could hit $1600 per troy ounce this year.

Regardless of what you read, whom you listen to… or whether your glass is half full, half empty, or in need of filling, it should all be taken at face value… actions speak much louder than words. As you read this, the NI 43-101 is done on the Lalor Lake property, six drills still turn there, while HudBay continues to construct the road to access it. The drills at VMS’s Reed Lake Discovery Zone continue to cut and turn out amazing intersections of high grade copper. The lights are still on in Garson Gold’s office on the hill, people go to work there every day, and as far as I know, they still have one drill turning on the property.

Add to this the recent statement by HudBay CEO, Allen Palmiere, when his words corresponded with the company’s actions. He said that because of the strength of HudBay’s balance sheet and the continuation of good cash flow, the company is in a unique position to be able to take advantage of the opportunities the market is creating. Between cash on hand, and anticipated cash flow from operations, they could fund their new Fenix project in Guatemala, they could fund Lalor Lake; they could even fund Reed Lake, if and when it turns into a mine… without having to access the debt market…