Dear Hinterland Shareholders,
In our ongoing efforts to provide broader communications and market information, we are pleased to provide you with Industry Sector Bulletins discussing current market opinions and/or conditions that affect the price, supply, and demand of platinum group metals.
The following article argues why Platinum is a better alternative than Gold for investment purposes and why "Platinum stocks are preferred as a medium to long-term investment over Gold"
If the article holds true, then resource exploration companies focused on platinum, such as Hinterland Metals Inc., will benefit from the current firm platinum supply and demand fundamentals.
Recently, Hinterland Metals has provided a Summer 2007 Exploration Update to investors. If interested, feel free to
Click here to view the press release.
For Further information on Hinterland Metals Inc. please feel free to click the following link to visit the Company's Investor Relations Hub.
Hinterland IR HUBRegards,
AGORACOM Investor Relations
Platinum better long term than gold?
Foord Asset Management says platinum stocks are a
better long term investment, despite the strong gold price.Tessa Kruger
Monday , 17 Sep 2007
JOHANNESBURG - Platinum stocks are preferred as a medium to long-term investment over gold which recently saw powerful rallies in its price. This comes as platinum supply and demand fundamentals are firm and platinum companies are set to grow production volumes.
Mike Townshend, resource analyst at Foord Asset Management, told Mineweb today that platinum stocks would outperform gold over the next two to five years as platinum demand was driven by environmental legislation (62%) and the Chinese jewellery market (22%).
Platinum companies have the underground and capital resources to boost their production volumes and take advantage of demand growth.
This compared to gold companies which did not only have declining production but also had to contend with ageing mines and infrastructure and an increasing cost base.
"The rate of decline in gold production is slowing, but it is difficult to see where growth volumes will come from," he said.
Gold demand - over 60% of it - is driven by jewellery demand emanating mainly from India. But this demand is not certain as it depends on the success of India's harvest crops.
"Gold companies could certainly benefit from the stronger gold price if they were able to control costs.
"But South African gold companies have showed an alarming trend of cost increases as mines age and they mine further away from shafts, wage settlements exceed inflation, while productivity does not improve and grades decline."
Townshend said platinum companies had the benefit of by-products rhodium, ruthenium and nickel, which boosted earnings with their stronger prices. Platinum mining did not take place as deep below the surface as gold mining.
"Another factor is that platinum companies are generating sufficient money to pay good dividends and have adequate cash-flow to finance growth."
Townshend added that while both gold and platinum metals prices have rocketed, earnings of gold companies have not grown over the past ten years. The earnings of platinum companies grew more than tenfold over the same period.
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