A Wall Street Transcript Interview with Stefan Ioannou, a Mining Analyst Covering Midcap Base Metal Companies at Haywood Securities

Companies include: Augusta Resource Corp. (AZC), Yamana Gold, Inc. (AUY), Goldcorp Inc. (GG), Teck Resources Limited (TCK) and many others.

In the following excerpt from the Metals & Mining Report, an expert analyst discusses the outlook for the sector and base metals pricing factors for investors:

TWST: Please begin with a brief overview of your coverage, including some of the names that you follow.

Mr. Ioannou: I'm a base metal analyst at Haywood Securities, and I tend to focus on the advanced-stage developers into the midtier producers of copper, zinc, nickel, moly - so those would be the sweet spot metals that I focus on most.

TWST: When you look at the metals, which one or two are you most bullish about right now, and what are some of the macro factors that are informing your positive view?

Mr. Ioannou: I think there has been a lot of attention given to zinc lately. Currently the zinc price is languishing with the rest of the base metals. It strengthened to about $1.00 per pound earlier this year, but has since pulled back to about $0.90. However, with zinc, it's not really a 2014 story. The excitement is looking forward to 2015 and beyond, in the wake of an anticipated supply deficit.

Right now the interesting dynamic in the zinc space is that there are a number of very key mine shutdowns coming down the pipeline here in the next two to three years. Last year alone we saw the big Brunswick mine in New Brunswick, Canada, shut down. That alone was about 2% of world supply. And there are a whole bunch of others; the next big one that guys are really focused on is the Century mine in Australia. That's about 4% of world supply, and it's going to shut down sometime in 2015. When you add up all the mines shutting down, you're looking at about 10% to 12% of zinc supply coming off the market in the next two to three years.

The flipside of that argument is when you look at what's out there to replace those lost mines, there really isn't much at all to fill the gap. More specifically, there aren't very many larger advanced-stage projects out there that can come online quickly to replace these mines facing reserve depletions, and so people are starting to look forward, anticipating a zinc price run in 2015 or so...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.