Stockhouse Movers & Shakers: Gold to rule in commodities super cycle

Veteran B.C. mining executive sees no end to the commodities super cycle despite stock market jitters caused by debt problems in Europe and the United States.

Ross Beaty has some good news for believers in the commodities super cycle. The Vancouver-based geologist and mining entrepreneur said it remains intact in spite of sovereign Eurozone debt problems and other global issues, which have recently caused stock and commodity prices to tumble.

“We are having a road bump right now. This is not the end of the party,” he said during a speech to the Association for Mineral Exploration BC in Vancouver, Wednesday.

A veteran of 40 years in the mining sector, Beaty has a major portion of his wealth tied up in companies that aim to cash on periods of historically high global growth, which can last a generation or more, and are driven by increasing trade, high rates of investment, urbanization and technical innovation.

Known as super cycles, they can feature the emergence of large new economies which drive demand for key commodities such as copper, nickel and zinc.

He is a founder and major shareholder of Lumina Copper Corp. (TSX: V.LCC, Stock Forum), which is exploring the Taca Taca copper-gold-molybdenum project in the Salta province of Argentina.

He is also on the boards of Pan American Silver Corp. (TSX: T.PAA, Stock Forum) -- the second largest primary silver mining company in the world -- and Alterra Power Corp. (TSX: T.AXY, Stock Forum), a Vancouver company which aims to take advantage of rising demand for electricity in British Columbia.

Beaty was making his speech on a day when stock prices tumbled yet again amid reports that sovereign debt problems are spreading to Europe’s two biggest economies, Germany and France.

But he said he is convinced that Europe will eventually devalue its way out of the crisis, by printing money, saving its banks, and getting back in the game with a devalued Euro.

“Gold should be the best performing metal in the next 12 months,’’ he said. Beaty declined to offer a price target, but said his forecast is based on the fact that gold is a monetary metal. Therefore, its price will be driven by powerful economic forces that are devaluing paper currencies such as the U.S. dollar.

“This is very bullish for gold,’’ he said.

Beaty remains optimistic about the outlook for silver. But after a long career in mineral exploration and development, he is also focusing on renewable energy and the future demand that he forsees in regions such as B.C.

“B.C. is on the cusp of incredible demand growth,’’ he said. It will be driven in part by expectations that as many as nine new mines may developed in the province within the next decade. As Chairman of Alterra Power, Beaty is betting on the future demand from new liquefied natural gas operations, including pipelines and a shipping terminal in Kitimat, B.C.

Last month Royal Dutch Shell PLC (NYSE: RDS.B, Stock Forum) said it has purchased a marine terminal near Kitimat as part of preliminary stage work to determine whether or not it should build an LNG export facility to supply customers in Asia with Canadian gas.

Beaty predicted that the combination of new mines and LNG operations will require another 2,000 megawatts of power.

With over $1 billion in assets, $110 million in anticipated annual revenues and Alterra is the product of the amalgamation of Magma Energy Corp. and Plutonic Power Corp. The company’s assets include the largest run of river hydro project and largest wind farm in B.C.

The Beaty portfolio:

Ross Beaty is also an investor in CB Gold Inc. (TSX: V.CBJ, Stock Forum), Augusta Resources Corp. (TSX: T.AZC, Stock Forum), Amerigo Resources Ltd. (TSX: T.ARG, Stock Forum) and Anfield Nickel Corp. (TSX: V.ANF, Stock Forum).