Newsletter: 2012, September
RSC’s Resource Market Outlook
Welcome to RSC’s September Newsletter!
You are receiving this newsletter because we either like you, want to like you, have worked with you, want to work with you or think you want to hear more from us and our perspectives on the mineral exploration industry.
However, if this is not the case and you never wish to hear from us again, we apologise and there is a one-click unsubscribe button below.
Assuming you are still with us, in September’s RSC newsletter we share our on-the-ground perception of changes currently occurring in the mineral exploration industry.
First though, here’s what we’ve been up to recently.
RSC helps discover Li-Ta mineralised system in Mozambique
RSC client, Kimberley Rare Earths (ASX:KRE), has gained from the diligent efforts of our exploration team led by Matthew Wood, resulting in the discovery of a large Li-Ta mineralised system in west Mozambique.
RSC exhibition at 34th IGC huge success!
Conferences are a great opportunity to meet and learn from interesting people. There was no lack of opportunity at the IGC in Brisbane last month where over 6000 delegates from 112 countries attended, mostly geologists. Among the highlights, our Project Administrator Nikola got friendly with a snake.
RSC at Africa Down Under and NZ AusIMM
Craig, Shaun, Paul, Nik and Rene represented RSC at the New Zealand AusIMM conference, closely followed by the Africa Down Under Conference in Perth. Seventeen African resources ministers and 2500 delegates attended the 3 day event where an opinion poll shows Australian mining company investment.
The market, prices, employment and ….what do we think about it?
Now, we don’t really believe in doomsday scenarios. Usually those who report these kinds of developments inevitably contribute to the spiral of negative sentiment. There is no denying, however, that most of the recent news points towards a challenging time ahead.
What to read into it? At RSC we try to keep our heads cool while we keep track of what the self-proclaimed experts say. On one day we hear from an expert that gold will go to $2000 before Christmas, but the next day another will say gold will finish the year on $1500.
Commodity prices have come down, cost prices have risen and readjustments are happening everywhere. Some companies are specifically planning for the future by cutting down on FIFO costs and setting up local exploration teams. (Diggers & Dealers Annual Review).
On the other hand, we were speaking to some iron ore focused clients at the IGC. They had always budgeted on $80/tonne and with recent news that prices may resurge back from the recent new established low of $90/t, some people may freak out, but it’s not all that bad.
We think the price adjustment will open up this market a bit more so in the medium to long term we see no dramas. Coal follows a similar story. When it comes to gold … who knows what to say but gold being categorically under-owned, the outlook is similar.
In the short term and over the last 3 months, we have seen a huge increase in the number of CVs we receive from geologists. If drillers start ringing our clients up asking whether they have a need for a rig, we know that the mining and exploration service industry is feeling the pinch.
So what do we think? In the short term, between now and perhaps March 2013 there will be tough times for junior explorers without cash. Contractors, consultants and other service providers will also feel the pinch as they are often last in and first out.
Given the fact that basic supply and demand chains aren’t really changing and the financial system that influences the gold market isn’t set to categorically change anytime soon, we think that by March 2013 after New-Years break and the wet seasons, we will be back into the swing of things. Perhaps a bit less manic than the circus of earlier this year but still steady. We see this as a positive readjustment as it will allow us all to focus on quality of service. Let us know what you think on our Facebook, LinkedIn or Twitter accounts.
So what does RSC do?
RSC provides geological contracting services with a difference: we don’t just send out geologists to help with a programme; we make sure our professionals have excellent support and come with all the tools, hardware and software necessary to hit the ground running.
We do more than just fill a gap in your busy exploration and mining programmes; we add genuine value, whether it is logging core on an underground rig, logging RC chips on a surface rig, or looking after an exploration programme from A to Z.
We understand of course that we are not the only ones offering these kind of services but RSC feels strongly that its clients shouldn’t have to pay for a contractor, pay higher than normal rates and at the same time have to educate and kit them up as well, something that we hear only too often!
We look after our clients as well as our geologists, charge very affordable rates and invest in the training of our geologists to make sure they add value from day one. We operate worldwide and work for junior explorers as well as for bigger companies such as Barrick. For more info see www.rscmme.com.
We would value the opportunity to follow up to discuss our services in greater detail and how we could cater for and be of benefit to your team and project goals.