Thursday, September 22, 2011

Here is the problem!!!

Here are some insights from an article on Globe & Mail.  You can read it here:

Mr. O’Rourke, a 47-year veteran of mining, insists long-term demand for copper is strong and other commodities is strong. Copper Mountain is the first major mine to open in B.C. since 1998 and is the third-largest copper mine in Canada. It was opened to capitalize on higher prices and was greenlighted on a feasibility study that rested on $1.80 a pound copper.

The price per pound fell on Thursday to about $3.50, from $3.75 on Wednesday, and an average of $4.20 in August, an extremely lofty level for copper. Mr. O’Rourke said his company would still make money at $2.50.

He also noted prices remain high. Copper is higher than it was a year ago and precious metals remain lofty, though off their peaks.  “Gold is still $1,730 an ounce,” said Mr. O’Rourke. “Silver’s $36. I mean, those are unbelievable prices for miners.”

Yes Mr O'Rourke...prices are high!  They are unbelievable prices!  So unbelievable that they are about to fall. 

As an investor I look for downside risk protection and those comments above are some huge red flags. 

Best Regards,

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