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Base Metals


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Pinetree's outlook for base metals in general remains positive, driven by the economic growth of China and India which is generating demand for construction materials and therefore base metals. Our top three base metal picks are copper, nickel and zinc. We are investing in junior mining companies exploring for these metals.[Most Recent Quotes from www.kitco.com]

  • Copper
    • Recent supply issues such as production outages, strikes, etc. have highlighted how tight the market is for copper and how fragile the supply/demand chain is for this commodity.  Disruptions have caused spikes in the price of copper and we continue to see this as a primary driver going forward. 
  • Nickel
    • Pinetree remains bullish on the nickel exploration companies as the price of nickel is still high [Most Recent Quotes from www.kitco.com]relative to historical levels. In late 2006 and early 2007, the price of nickel soared based on demand outstripping supply. With elevated prices, steel manufacturers consumed their stock piles and moved to cheaper alloys such as pig iron to make stainless steel. Pinetree sees nickel returning to the $20 mark as manufacturers begin to replenish their nickel stockpiles for higher grade stainless steel.
  • Zinc
    • Major zinc mines were being decommissioned in 2008 and there are no new mines going into [Most Recent Quotes from www.kitco.com]production in the same timeframe, creating a long term supply shortage. As the price of zinc rises, investors will initially invest in current producers and then look downstream at the junior exploration and development companies. Pinetree believes the most significant gains can be made by investing in the juniors early on and we are pursuing that strategy.

Sector Themes

  • Speciality metals are attracting a wider audience, as evidenced by recent LME listings for cobalt and molybdenum.
  • Rare earth elements are becoming recognized as strategic by governments.
  • Lithium is garnering major attention as a battery of choice for the next generation of clean vehicles.
  • Potash demand is supported by population growth and improvement in diet quality.

Base Metals Investments as at June 30, 2014.
Please see our disclosure criteria regarding the investments that are displayed below.

Cost Total fair value % of total fair value
41,543 10,671 6

 

Issuer Security Description Cost
('000)
Fair
Value
% of
Sector
(FV)
Coro Mining Corp.
COP:TSX
15,250,000 common shares
500,000 warrants expire Dec 20, 2016
6,623 1,068 10.0
Macarthur Minerals Ltd.
MMS:TSXV
8,672,500 common shares
9,705 1,561 14.6
Newport Exploration Ltd.
NWX:TSXV
6,250,000 common shares
1,000,000 warrants expire Mar 7, 2019
1,307 3,369 31.6
Superior Copper Corp.
SPC:TSXV
6,675,000 common shares
500,000 warrants expire Dec 28, 2014
750,000 warrants expire May 7, 2016
643 1,066 10.0
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