Richard Karn                                            Managing Editor                                      The Emerging ...
The Emerging Trends Report LLC is neither a registeredInvestment Advisor nor a Broker/Dealer. Readers are advised thatall ...
www.emergingtrendsreport.com
www.emergingtrendsreport.com
Putin: “...the parasitic nature of the US dollar...”Wen: “...irresponsible money printing ...”Roessef: “...perverse effect...
www.emergingtrendsreport.com
www.emergingtrendsreport.com
Totalitarian regimes tend to attribute     their motives to their enemies as a way     to justify pre-emptive strikes.    ...
www.emergingtrendsreport.com
If you want to save money: gold bullionIf you want to grow your wealth in a negative realinterest rate environment, you ca...
1. fiat currency abuse/corruption2. long overdue infrastructure restoration and /or   expansion in both the USA and EU   a...
Our take is that in the years ahead, perceptions will shift and three things will transpire in the gold sector:1.   gold w...
www.emergingtrendsreport.com
www.emergingtrendsreport.com
www.emergingtrendsreport.com
Not easy to grasp or invest in: mis- & disinformationMurky pricing: few are traded on an exchangeOff-exchange traded metal...
Endless pursuit of higher quality, ever more efficient devices at ever lowerpricesTechnology-enabled explosion in material...
HDD Capacity Growth            The Great Stabilizer:- 3G and 4G super alloys- perpendicular bit stacking HDDs- artificial ...
Nature of Specialty Metal Supply Threats:Sovereign Risk Scarcity No Substitute By-product Dissipative Use        48 Metals...
supply problems are entrenched, structural and lack quick remedyprice response very strong over 2009-11 and acceleratingmi...
www.emergingtrendsreport.com   21
Hageluken, Christian:”Sustainable metals recycling from waste electronics”; South Pacific Regional E-waste Workshop; Brisb...
321m computers sold globally in 2010, 98m in US alone1.3b cell phones sold globally in 2010; number in usesurpassed 4.8b i...
Fiat Currency Abuse                             History+ discovery-driven trend                      + Free Marketeers vs ...
The ETR reads mainstream publications, identifies anomalies, researches the industry to confirm a long term trend, makes l...
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40 elements in demand: finding opportunities in Australian speciality metals - presented at www.minesandmoney.com

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Emerging usage trends for speciality metals
Exploring Australia’s growing role in the supply of speciality and precious metals
Understanding the complex price drivers impacting speciality metals
Why the rare earths are still a hot commodity

Richard Karn, Managing Director, The Emerging Trends Report

Published in: Economy & Finance, Business
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40 elements in demand: finding opportunities in Australian speciality metals - presented at www.minesandmoney.com

  1. 1. Richard Karn Managing Editor The Emerging Trends Report Anchorage, AlaskaMines & Money: Sydney, October 2011 www.emergingtrendsreport.com
  2. 2. The Emerging Trends Report LLC is neither a registeredInvestment Advisor nor a Broker/Dealer. Readers are advised thatall information is issued solely for informational purposes and isnot to be construed as an offer to sell or the solicitation of an offerto buy, nor is it to be construed as a recommendation to buy, holdor sell (short or otherwise) any security. All opinions, analysesand information included herein are based on sources believed tobe reliable and written in good faith, but no representation orwarranty of any kind, expressed or implied, is made including butnot limited to any representation or warranty concerningaccuracy, completeness, correctness, timeliness or appropriateness.In addition, we do not necessarily update such opinions, analysisor information. Owners, employees and writers may have long orshort positions in the securities that are discussed. Readers areurged to consult with their own independent financial advisorswith respect to any investment. All information contained in thisreport and website should be independently verified. www.emergingtrendsreport.com
  3. 3. www.emergingtrendsreport.com
  4. 4. www.emergingtrendsreport.com
  5. 5. Putin: “...the parasitic nature of the US dollar...”Wen: “...irresponsible money printing ...”Roessef: “...perverse effects of (US dollar) policy...” www.emergingtrendsreport.com
  6. 6. www.emergingtrendsreport.com
  7. 7. www.emergingtrendsreport.com
  8. 8. Totalitarian regimes tend to attribute their motives to their enemies as a way to justify pre-emptive strikes. (paraphrased from Arendt, H.: Totalitarianism)www.emergingtrendsreport.com
  9. 9. www.emergingtrendsreport.com
  10. 10. If you want to save money: gold bullionIf you want to grow your wealth in a negative realinterest rate environment, you cannot NOTspeculate; but where? Gold, Silver and PGM stocks Hard Assets: Energy, Resources & Agriculture Specialty Metal stocks www.emergingtrendsreport.com
  11. 11. 1. fiat currency abuse/corruption2. long overdue infrastructure restoration and /or expansion in both the USA and EU a) water & wastewater treatment b) Oil & Gas pipelines (400,000 & 270,000 miles respectively), pumping stations, and refineries c) North American Electrical Grid d) 103 nuclear power plants, some dating from the ’60s3. nature of bureaucracies www.emergingtrendsreport.com
  12. 12. Our take is that in the years ahead, perceptions will shift and three things will transpire in the gold sector:1. gold will continue to as act like a leveraged inverse short ETF against confidence in central banking and interventionist policies (Grice/Hoye);2. whether a broad decline in input costs outpacing the decline in the gold price or the price of gold outpacing the increase in input costs, we believe gold mining profits will outperform most if not all other sectors, which we anticipate will experience a decline in earnings due to weakening prices globally; and,3. shareholder dividends will attract significant interest because the companies are backed by gold and motivated by profit rather than being backed by the full faith and credit of a leftist government and corrupt central bank administering a fiat currency regime. www.emergingtrendsreport.com
  13. 13. www.emergingtrendsreport.com
  14. 14. www.emergingtrendsreport.com
  15. 15. www.emergingtrendsreport.com
  16. 16. Not easy to grasp or invest in: mis- & disinformationMurky pricing: few are traded on an exchangeOff-exchange traded metals are unhedgeableMany are by-products and sold forwardPricing is discovery-driven, not GDP-correlatedFree Marketeers in denial about Neomercantilist intentions www.emergingtrendsreport.com
  17. 17. Endless pursuit of higher quality, ever more efficient devices at ever lowerpricesTechnology-enabled explosion in material science R&DUnique performance characteristics in tech alloysLimited substitution + trace amounts used = price inelasticScarcity or byproduct sourcing = supply inelasticMany have dissipative uses but no recycling protocolsSpecialty metal demand trajectory is discovery-driven and largelyindependent of GDP (unlike oil, base metals, lumber etc) …cycle back to top and repeat—faster. 17
  18. 18. HDD Capacity Growth The Great Stabilizer:- 3G and 4G super alloys- perpendicular bit stacking HDDs- artificial photosynthesis- nano-lattice for targeted drug delivery Note that the vertical axis is logarithmic, so the ‘fit’ to reflect growth in HDD capacity reflects exponential growth. www.emergingtrendsreport.com
  19. 19. Nature of Specialty Metal Supply Threats:Sovereign Risk Scarcity No Substitute By-product Dissipative Use 48 Metals Experiencing Supply Threat (number of threats) antimony (5) beryllium (3) bismuth (3) cobalt (3) fluorspar (2) gallium (3) germanium (3) graphite (3) hafnium (2) indium (3) lithium (2) magnesia (3) manganese (2) molybdenum (2) niobium (4) 6 PGMs (5) 15 REEs (4) rhenium (3) scandium (3) selenium (4) silicon (2) silver (3) tantalum (2) tellurium (4) tin (3) titanium (3) tungsten (3) vanadium (2) zirconium (3) 19
  20. 20. supply problems are entrenched, structural and lack quick remedyprice response very strong over 2009-11 and acceleratingmines closed not for lack of ore but undercut by China on pricetoday China is major producer / price setter of specialty metals butincreasingly unwilling/unable to meet global demandresource nationalism increasing (Bolivia, Peru, Namibia,Kazakhstan, South Africa, China)escalating clash of Free Marketeers and Neo-mercantilists 20
  21. 21. www.emergingtrendsreport.com 21
  22. 22. Hageluken, Christian:”Sustainable metals recycling from waste electronics”; South Pacific Regional E-waste Workshop; Brisbane,QLD, 21.07.2010. www.emergingtrendsreport.com
  23. 23. 321m computers sold globally in 2010, 98m in US alone1.3b cell phones sold globally in 2010; number in usesurpassed 4.8b in 2009 (Gartner)123,000 computers are discarded every day in the US--19% arerecycled402,000 cell phones are discarded every day in the US--13%are recycled (EPA)200 g/t Au in PC motherboard scrap;mobile phone scrap: 340 g/t Au, 3500 g/t Ag, 140 g/t Pd, 130kg Cu (EPA) www.emergingtrendsreport.co m
  24. 24. Fiat Currency Abuse History+ discovery-driven trend + Free Marketeers vs Neo-mercantilists+ resource nationalism/corruption + increasing resource nationalism+ increasingly intrusive bureaucracies + EM demand+ politically-motivated export restrictions + China fears+ deeper mines, more accidents + relentless demand+ declining # of qualified personnel + few threats under investor control+ ever more environmental restrictions + project finance improving+ civil conflicts+ power supply disruptions + uniquely varied & stable geology+ national/corporate/private stockpiling+ low hanging fruit (deposits) long gone+ exploration venturing farther afield AUSTRALIA+ lack of recycling protocols+ relentless demand gold miners mid-cap producers (M&A)HIGHER METAL PRICES proven micro-cap deposits micro-cap historic mines www.emergingtrendsreport.com
  25. 25. The ETR reads mainstream publications, identifies anomalies, researches the industry to confirm a long term trend, makes long term investment recommendations that strive to make our clients conversant on the subject.We also conduct contract research—and it is what we discovered in this process in 2006 that led us to Australia.“Coalescence” (2005): environmental movement (EM) crowing about the death of coal“The Gold Treatment” (2005): Greenspan “saves US taxpayers $50m” by discontinuing M-3 figures + the Rothschilds stopped doing a.m.-p.m. fix in their London office after >100 years because gold trading was “unprofitable” = buy with both hands“Agua Caliente” (2006): clean water is the biggest environmental issue facing the planet, but there is no money in it, and people have forgotten that water = food“Nuclear Tide” (2006): nuclear energy was the most heavily propagandized, polemic issue on the planet until AGW“The Silver Intersection” (2006): arguably the most useful metal on the planet, silver is also the most conflicted“Electrifying Change” (2007): the greatest technological achievement of the 20th century was evolutionary, not revolutionary“Fuelhardy” (2007): free market ideology runs headlong into resource nationalism and neo-mercantilism“Scrap in the Time of Scarcity” (2008): paradox of metal being infinitely renewable but mining stifled by EM“Gas Panic” (2008): emergence of horizontal drilling an fracking amidst hysteria over North America running out of gasCredit & Credibility (2009): eBook exploring 5 most critical issues attendant to the GFC; updates our 9 trends within this context www.emergingtrendsreport.com

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