|By: Richard Mowat||POSTED: 07/17/12 12:44 PM
FILED AS: Lomiko Metals Inc.
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Graphite Stocks And Elections
Just thought it would be a good time to provide my take on the current global conditions and how they might effect Commodities and Junior Mining Companies from my perspective as a participant in junior mining, specifically in graphite.
We are in a wait and see market. Its summer. The American election in this Fall. There is a build-up of capital in companies in North America that could be creating jobs or buying assets. Will QE3 be the sign? I think so. Early September we should see an announcement and there will also be a clear indication of who is winning the election. MItt Romney is playing his cards close to his chest. Either he has a trump card (perhaps a Trump card?) or he is a patsy that will make sure Obama wins. An Obama win will be very good for Canadian markets. Its a safe haven of conservatism right now with Harper elcted with a majority last year and spending cuts being rolled out.
So summer is slower than most right now as can be seen by volumes at most stock markets. Europe isn’t going away but as soon as CNN stops paying attention – things will get better- just like the Swine Flu did….there is nothing positive that will capture the imagination of investors. Or is there?
I have followed Electric Metals since 2009 and graphite and graphene for about a year now and we jumped into the space with Lomiko Metals optioning the Quatre Milles Property.
We have been undergoing the Internet Revolution and the Mobile Phone Revolution for 30 years now. My first computer was a Commodre 64 in 1984. The last time I saw one was in a Museum. What will happen in the next 25 years? Where is the money going? For sure, Health Care and Technology are two big sectors. R&D continues. Underlying that is the Energy Sector and the push towards Clean Energy. The biggest idea in this area has been the electric car. This has to be as revolutionary as the cell phone and the internet. Its going to be slow – 1984 – 2014 is 30 years. 2009 – 2029 is the changeover period to electric cars and new innovations.
The most promising thing I have come across during that period is graphite and graphene. The best solution to a problem is sometimes the most beautiful one. What is more elegant than using a substance we have known about for 100 years or more to make up the products in our daily lives? Products that are game-changers? Graphene will allow for 5000 foot buildings, floating crusie ships, heli-cars and applications in military, health care and the space industry are endless.
Shockingly, Canada was slow until last month when it was revealed that foreign groups are pouring money into Canada. TSX, TSX-Venture volumes were down a 1/3 for the last 8 months while graphite stocks volume went through the roof. I can harldy believe that Lomiko traded 70 million shares this year already – more than its float. THis bodes well for the sector in the coming months.
With the graphite boom in Vancouver in Janaury 2012 came a huge amount of new IPOs and deals jumping into the graphite exploration game. The downtrend in graphite stocks on the TSX-Venture for the last 2 months has effectively closed the door on new companies. The market had enough. For the few that survived and thrived raising money, it means good times ahead because there is a limited number of horses.
Lomiko has now reached the point when the drills will be turning soon. So it is a critical time for the company at a time when the graphite market is set to take off again with a new wave of investors.
That’s my outlook for now. There should be a recovery in Fall and a run in equities including juniors.
Article By: Paul Gillon