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The title 'The Business of
Mining" sounds very simple doesn't it? But the 'business of mining' may
not be what you think.
I recently attended my first mining
conference in Mexico, actually in Durango, MX, August
29 - September 1. While this may have been my first, it will not be my last
conference in Mexico and as I have met many new friends and have great
respect for their hard work in this business.
My previous experiences with mining
conferences in the United States and Canada draw a striking contrast.
There are 2000 to 3000 companies in
the natural resource sector including gold, silver, copper, zinc, oil and
gas, etc. Most of these companies are headquartered in Canada, either
Vancouver or Toronto and are listed on the Toronto Venture Exchange or the Toronto
Stock Exchange.
Many of the companies have operations
and mining activities around the world but Mexico has become one of the
favorite countries to do business because of its long mining history, great
resources within the Country, a very favorable mining environment and mining
friendly laws.
The number of employees in the mining
industry has risen to almost 286,000,
according to the Mexican Social Security Institute's latest data and women
are a growing part of the work force here in Mexico. For more information on
mining in Mexico, click
here.
In the United States and Canada the
purpose of most mining conferences is to attract investors and provide them
with the opportunity to meet with the management of mining companies with the
intent of these potential investors buying shares in the companies.
These 'north of the border' conferences
are a great platform for the thousands of resource companies to showcase
their particular company. But again, the focus is on the investors or
potential investors. Most of the attendees are concerned with current price
of gold and silver, the continuing trend and climate for the resource shares
and how that will affect the performance of the shares.
We don't find any of the Canadian
mining companies operating in Mexico with a listing on the Mexican Stock
Exchange, the BOLSA. Many of these
Canadian companies have a listing in Germany on the Frankfurt Exchange, but
not in Mexico. In my opinion, those companies with significant activities in
Mexico would be well served to get a
BOLSA listing making it easier for the Mexican investors to buy the
shares in Mexico without having to access either the Canadian or United
States markets. I can only ask, why not? Por Que No? What is the problem?
Now fast forward to my recent
experience and observations in Durango, MX.
No one I met was talking about the
price of gold and silver or even knows where the price is currently. Out of
the 100 or so vendors attending the conference only 3 were mining companies
with shares trading in Canada and/or the United States. There was no top
management from Canada of these 3 companies in attendance but the booths were
represented by qualified Mexican employees. There were virtually no American
or Canadians present and only those like myself, living in Mexico and working
in the mining business.
What I discovered first hand is the
'business of mining' is a very serious business.
The vendors at the Durango conference
consisted of those truly performing the 'business of mining' at the ground
floor level. Equipment companies like Case and Caterpillar, drillers and
manufactures of drilling equipment, manufactures of drill bits, cables,
cement, mining supplies, clothing, safety equipment, petroleum representatives
from Conoco and all of the other support services you can imagine.
Immediately one realizes the
'business of mining' is very capital intensive and requires much time and
patience. There may be many years from the time a mining company acquires a
property until production, if ever. The odds of actually finding and
developing a commercially productive mine any where
in the world is very, very small. Great odds and much capital must expended
by companies to accomplish this task.
Mining is truly a people business and
I was pleased to meet many of the Mexican business men and women at the
conference, the owners and representatives of the companies which actually
make this business happen. These are professionals and many speaking great
English making this conference easier for me and a wonderful experience.
I now see the many players and
vendors and the complexity of the business of mining and have met many new
friends which I will see again at the next
conference in Hermosillo, MX, October 23 - 26. Visit their website for full details. For
those up north, remember, we are in Mexico and the seminars, speeches or
workshops will be in Espanol.
It will never be easy to discover
those mining companies which will provide us as investors an extraordinary
return on our investment. But, this is our business to seek resource
companies which we believe will greatly reward investors but with the full
awareness of the difficulty, capital intensive, uncontrollable costs, i.e.,
fuel and labor, in this 'business of mining'.
Congratulations on a great
conference,
Dudley Baker
PreciousMetalsWarrants
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