Financing is becoming quite difficult for the mining industry.
For example, Canadian Royalties' copper-nickel project, 20 kilometers south of Raglan is being postponed after spending over 180 million dollars because they can't find any financing. 350 workers will be laid off.
This is just the beginning of where the mining sector is going. Many juniors will meet refinancing difficulties and they will see there projects stalled. The big institution knows all this and therefore are not there to buy yet. They (the institutions) are more on the sell than on the buy as they are trying to clean there mess (financial it is) to make things worst. On the other hand, some big companies,like Gold Corp, with over 1.5 billion dollars in cash on hand, are just waiting to grab (in an agreesive bid) interesting properties and companies with some decent reserves...
The sharks are lurking while the juniors are beginning to struggle. And they, who think that the TSX will rebound quickly like a spring to figures above 1500, are dreaming. There is still a long way to go before this is over. The housing market is beginning to slow in Canada and big banks are still coming up with losses. RBC just came up with a 4 billion$ mortgage related loss and there is more up the pipe.
Europe is officially in a recession and the housing market in the US has still some way to go before it hits the bottom. Bear Stern was bailed out, the came Fanny Mae and Freedy mac that will cost over 300 Billion$ to the taxpayers, and now Lehman Brothers, and so on. Not to mention Merrill Linch and the others. 170 banks in the US on the brink of defaulting.
It seems to me that many don't understand where we stand here?? I am fully invested in the mining sector and have been here before. Get rid of your margin position and sit tight. This can go on for a few years and the bottom has not been reached yet. You have to remember that it will eventually turn around. When? I don't know, but you better be patient.
This is a global crises ripping through all regions of the world and before the dust settles it may be a year or two from now??? Hope I am wrong. Just my humble opinion. Don't shoot me yet, wait awhile first.
JH
