Dear VMS Ventures followers,

Today we wanted to share with you the following article published by Rick Mills of Ahead of the Herd on the state of the copper market and why Rick sees a bright future for this important base metal.  

Rick's article touches on some of the fundamental macro economic factors that will dictate the demand for copper in the future as well as limiting factors on the supply of copper to world markets.

As a Company in the first stage of production at our high grade Reed Copper Project, we are closely watching the copper market and thought you might enjoy this "big picture" analysis of the future and the implications on resource developers and investors. The article titled ‘Copper Catch Up’ can be found below.

Best regards,

John Roozendaal
President
VMS Ventures Inc.


VMS owns 23.9% of NAN

Copper Catch Up

Richard (Rick) Mills
Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

Until roughly 12,000 years ago – at least 90 percent of our history - we humans eked out a living by hunting and gathering. Our hunter-gatherer ancestors were replaced by farmers and herders who crowded into villages following the invention of agriculture.

Over the last 200 years a major resettlement pattern has emerged:

• In 1800 only about 2 percent of the world's population lived in urban areas
• In 1950, 30 percent of the world population was urban
• In 2000, 47 percent of the world population was urban
• Today, 53 percent of the world’s population is considered urban

What was predominately a rural culture has been turned into a predominately urban one and the transformation is expected to continue. By 2050, according to ‘Global Urbanization’ by Eugenie L. Birch and Susan M. Wachter, 70 percent of the world’s population will be urbanized.

Urbanization is defined as ‘a rapid and historic transformation of human social roots on a global scale.’ There are many reasons for the long underway rural flight; greater and more varied economic opportunities; enhanced education and health care; much improved services such as entertainment and other urban amenities and an expectation of social mobility.

The advantages of living in a city can be summed up as:

1. Proximity
2. Diversity
3. Marketplace competition

In China the average salary for urban residents stood at 22,068 yuan in the first three quarters of 2013, up 9.5 percent year on year. The figure for rural residents rose by 12.5 percent year on year to 7,627 yuan. Urban consumption hit 1.76 trillion yuan in September, up 13.1 percent year on year, while rural residents spent 304.7 billion yuan, up 14.8 percent from the previous year.

“The rural-urban divide is quite evident. Megacities and large cities are the richest and have far better access to basic public services; smaller towns, secondary cities, and areas on the perimeter of urban centers are less rich; and rural areas are the poorest,” Kaushik Basu, World Bank’s Chief Economist and Senior Vice President for Development Economics

In India there’s also a wide difference in wages between urban and rural areas. A male casual laborer can earn Rs 150 per day in rural areas, his urban counterpart receives Rs 180 a day – Indian Rupee (Rs) . A salaried employee in rural areas might earn Rs 300 per day but in urban areas the same employees daily earnings would rise to nearly Rs 450.

The Philippines’ overall ratio of rural-urban wage gap is 67 percent. When skilled and unskilled workers are considered separately a much higher ratio becomes evident.

Population Growth

At this moment there are slightly over 7 billion people living on this planet, an urbanization rate of 53 percent means there are roughly 3.71 billion urbanites in the world today. It has been estimated that by the year 2050 our global population will reach 10 billion people. If our global population does indeed reach 10 billion people and if Birch and Wachter’s expected urbanization rate of 70 percent is achieved, seven billion people, or almost the equal of today’s current world population will be considered urban.

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