The Problem with Mines & Money.  Too many great speakers.

This year’s Mines & Money London ended Thursday and I have to say it probably brought together the best array of mining, metals and minerals expert speakers perhaps ever assembled under one roof.  Its problem – a great problem to have perhaps – was that there were so many really strong individual presentations, panel discussions and one-on-one interviews (with good moderators who ensured everything ran smoothly and to schedule – a major achievement in itself) that for major parts of the four day event the talks had to be split into three streams and it was thus impossible to take in all those one would have liked to have listened to.  And, to an extent one suffered from information overload anyway.  How the organisers can top this in the future in terms of invited high quality speakers is hard to contemplate.

I suppose the other basic difficulty facing the organisers is how the conference is paid for and the effects this has on speaker distribution through the various streaming locations.  While the conference centre in Islington – although not basically designed as such – did have space to accommodate all these, the fact is that the way these conferences are financed is for the greater part of income to be provided in speaker/exhibitor packages to be sold to those companies which wish to put their investment case forward – and these speakers almost certainly needed to have the main presentation auditorium to present in to keep them happy.  In a publishing parallel, these are the advertisers while the expert speakers provide the editorial.  This means that some of the plethora of really strong speakers and discussions get relegated to the smaller satellite conference rooms which accommodate fewer people while the ‘advertisers’ find themselves presenting to sometimes a three-quarters empty auditorium (but for them it is perhaps better than to an even smaller audience in one of the smaller satellite presenting rooms.)

The alternative, of course is to only have the expert speakers but charge much larger sums for conference attendees to come in – which would then almost certainly substantially reduce the revenues and the overall event size.  This would reduces too the networking opportunities, which provide one of such a conference’s other main strengths.  Mines & Money combines both sides here, but many delegates consider the price to attend is already too high anyway, so bumping this up could be very counter productive.  A major dilemma for the organisers.

Mines & Money is thus not the only major event which utilises this kind of business plan.  The ever popular Mining Indaba in Cape Town in February (a great location advantage in the heart of the northern winter) works similarly, although perhaps its specific problem is that it has thrown its exhibition space open to the big mining equipment manufacturers which have much more money to spend on the exhibits and thus dominate the space – so much so that the junior and mid-tier miners and explorers at whom the conference was originally aimed – feel they are being squeezed out.

But back to this year’s Mines & Money – the speaker programme was, as mentioned above, exceptional, right from day 1.  The big names here were legion.  Presentations ranged from the sublime – perhaps Grant Williams’ polished performance presentation on the final day was the absolute highlight in that it combined music, graphics, lots of humour and some great analytical content, but with other hugely polished presenters like Rick Rule, Frank Holmes, Pierre Lassonde, Tom Albanese, David Humphreys, Mark Bristow, Ian Hannam, Robin Griffiths to name just a few on the main programme.  There were also many more top names on the various panels and discussion groups – together with an array of perhaps lesser known, but hugely informative presenters covering virtually all aspects of global mining, metals and minerals.  This was a great conference line-up.  Even yours truly got into the act interviewing Grant Williams in one of the on-on-ones – an easy task give Grant has so much to say.

Perhaps the other criticism – if one can criticise such a strong event at all – is that nearly all the main presenter speaker slots were only 20 minutes in length, whereas so many of the main speakers would have happily been able to take much more time putting their views across.  Because they were all such strong presenters (I perhaps only attended one main presentation which could have been described as under-prepared and disappointing, even though the speaker had good presence), this would not have been a problem in audience attention – indeed would have been welcomed.  But there are only so many hours in the day, and even a four day conference is considered long nowadays.  Who would be a conference organiser?

The accompanying exhibition this year was considerably smaller than in previous years, but that was hardly surprising given the state of the resource sector.  It did seem to be pretty well attended throughout and the exhibit floor also provided a great networking space.

Overall  a really good event for those wishing to hear some great expert views on our industry.

Another 49 t withdrawn from China’s SGE in week 46 – huge 2,362 t YTD

China’s Shanghai Gold Exchange withdrawals continue strong with another 49 tonnes taken out in the week ended November 27th bringing the year to date total to just over 2,362 tonnes.  For comparison the previous full year record total achieved in 2013 has already been exceeded by around  180 tonnes, with just over a month to go until this year end.  We are downgrading our full year forecast to 2,580 tonnes from the previous 2,600 tonnes plus, but this would still be 18% higher than the previous record – and around 23% higher than last year’s total withdrawal figure.

Much is made in the West of the downturn in the Chinese economy – but this is a reduction in percentage growth – not a recession.  Sometimes the two seem to be confused by the media.  The Chinese middle classes are continuing to grow and employment is being pushed in the government’s economic reboot to the services and domestic consumption sectors which tend to pay higher wages than manufacturing and thus the disposable wealth within this ever growing population segment is growing rather than diminishing.

As one of the speakers at this week’s Mines & Money conference in London pointed out, for thousands of years China and India were the world’s richest countries – a position they mostly lost in the 19th and 20th centuries.  They are becoming so again – a return to the status quo ante perhaps – and with their huge inherent disposition to accumulate gold (which has served their people well over the centuries as a store of wealth and protector against economic downturns and inflation) we can only see the gold acquisition trend continuing to build.

We are already close to the crunch situation in the supply/demand equation for gold and again, as a number of highly respected speakers suggested at Mines & Money, the gold price will go up, and likely go up very sharply, although none would really commit themselves on a timescale for this to occur.  Perhaps the nearest was Pierre Lassonde who reckoned the U.S. Fed has talked itself into virtually having to start raising rates this month, or lose all credibility, but that it will be forced to backtrack before the middle of next year, cutting rates again – or even implementing QE4 – and this would be the trigger for the start of a gold perception resurgence.  Grant Williams (no relation) talking at the same event somewhat concurred and commented that when gold does rise it will likely move rapidly and comfortably take out the previous all-time price high.  Good fodder for the remaining gold bulls!

The COMEX paper gold casino

Speaking yesterday at Mines & Money London among one of the best speaker programmes at any conference I’ve attended recently, perhaps the stand-out presentation was from John Hathaway, Senior Portfolio Manager for Tocqueville Asset Management of the U.S. – and when I say it was the standout that was praise indeed given the remarkable array of top speakers presenting on the day.  Perhaps the only real problem is that with 20 minute speaker slots, kept to remarkably rigorously by the organisers, many of the speakers could have gone on far longer.  But the organisers have to be commended for bringing so many top names to a London conference.

Going through the speaker slate for the day we had Rick Rule, Frank Holmes, David Humphreys, Pierre Lassonde, Evy Hambro, Mark Bristow, Peter Hambro, Oskar Lewnowski, John Kaiser, Graham Tuckwell, Rob McEwen, Grant Williams and many more, as well as some cracking panel discussions featuring most of the above, and others.  Today’s programme is almost equally strong.  Mines & Money’s format seems to be working well and as well as events in Hong Kong and Australia the conference company is planning a North American event next year too, to be held in Toronto in September.

But back to John Hathaway – there’s a more comprehensive article on his presentation written by me on the Sharps Pixley website – click here to read it – but for the record here he climbed into paper gold on COMEX and its undue effects on the gold price, in the light of the huge amount of paper being traded – latest figures suggest that paper gold trades in a single day can reach as much as 300 times daily global physical gold supply.  Overall this has the effect of the gold price being set based on U.S. paper trades, almost totally ignoring supply/demand fundamentals – which are far more positive for gold, particularly now the big liquidations out of the gold ETFs are diminishing drastically, and in view of the record gold demand coming out of China and India, which between them are on their own accounting for around all globally new mined gold.

Hathaway also looked at a number of other aspects on gold supply and demand, and like a number of the other gold oriented speakers is convinced that the fundamentals for gold are so positive that the price must turn positive sooner rather than later, but the actual timescale remains obscure.