Invesco Canada blog

Insights, commentary and investing expertise

Gold miner worth the wait

Earlier this month, I attended the opening ceremony of a gold mine in Mexico, along with the governor of Guerrero state, several federal cabinet ministers and the chairman and the CEO of Torex Gold Resources Inc., the company launching the mine. I’ve been investing in commodities for many years, and my focus has always been on high-quality assets run by high-quality people. For me, Torex fits the bill.

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Four reasons why oil prices should normalize


April 25, 2016
Subject | Active management | Commodities

When oil is trading at US$20–US$30, many energy companies are not profitable. When oil prices are that low, companies are operating simply to cover their cash costs – it can be very costly to restart a stopped oil well and companies stand to lose less money by continuing to produce, rather than ceasing production altogether.

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Question: What is your outlook on the energy sector?

Our team doesn’t see much benefit in trying to predict volatile commodity prices. Rather, we value natural resource companies using a constant commodity price that tends to focus on the marginal cost of new production. The benefit of this approach is that it cancels out the “cloud of noise” associated with volatile commodity prices.

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Iran deal’s effect on oil will be limited

Western sanctions on Iran have been in place since 2011. The country’s current production of ~2.9 million barrels per day (mb/d) is about 800 kb/d to 1 mb/d below pre-sanction levels. With a deal over Iran’s nuclear ambitions now signed, energy investors are trying to determine when physical Iranian barrels will return to the market and what quantity the country can export.

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Finding opportunity in Alberta’s NDP win

The NDP’s majority win in the Alberta provincial election definitely caught me by surprise – and this reaction is clearly visible in the stock market as well, with weakness in energy names across the board in the last few days. The market doesn’t like uncertainty and with this new government in place the policy changes are expected to be gradual so this uncertainty could last for a while.

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The market missed what Shell – and Trimark – saw


April 10, 2015
Subject | Active management | Commodities

Royal Dutch Shell PLC has offered to buy BG Group PLC for roughly US$70 billion, an offer that represents a 50% premium to the previous day’s closing price. Prior to the premium, the weight of BG Group in Trimark Resources Fund was approximately 3% and in Trimark Energy Class it was approximately 2%, so this is a significant win for both funds considering the premium being offered to date.

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OPEC decision brings buying opportunities


December 18, 2014
Subject | Active management | Commodities | Macro views

The Organization of Petroleum Exporting Countries (OPEC) caused commotion in markets last month when it announced its decision to maintain oil production targets despite decreased demand. I believe the decision not to cut oil production is the right call in the longer term.

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Making sense of evolving emerging markets

What investors thought about emerging markets two decades ago, does not reflect what it represents today. The emerging markets landscape has drastically evolved as evidenced by the vast differences between countries. Therefore, it’s now more appropriate to examine emerging markets on a country-by-country basis, rather than lumping them all into one market category.

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Zambia: On the ground research


April 4, 2014
Subject | Active management | Commodities

About 3,000 kilometres north of Cape Town sits Lusaka, Zambia, home to numerous copper and heavy metal mines as well as other resource-development projects. I headed there to see first-hand the status of a new open pit mine that one of the companies we hold is excavating. Like South Africa, Zambia is a country that, while blessed with substantial investment opportunities, is also rife with barriers to investing. To complicate matters, there are many widely held misconceptions about both the investment opportunities and risks present there.

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Is South Africa a “gold mine”?


March 27, 2014
Subject | Active management | Commodities

While it would be nice if the next deposits of copper, oil and gas were to crop up closer to home, the reality is many prolific resource zones are found offshore in places where  political and social unrest are commonplace. Some investment opportunities in Africa are a prime example of this, but it’s also a vast continent full of massive deposits, tremendous investment opportunities and well-run companies.

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Why gold stocks are on the rocks

I recently sat down with Morningstar Canada for an extended interview about the ongoing volatility in gold stocks. There are a number of reasons for the heavy sell-off in gold, but whatever the reasons, it’s clear to me that retail investors are seriously questioning the value of gold as a traditional safe-haven investment.

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On the road – Africa: Assessing political risk

There is political risk that comes into play when making investing decisions in Africa. If I’m looking a company with assets in, let’s say, Mozambique or Ghana, compared to a mining company doing business in Ontario or British Columbia, the political considerations are very different.

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On the road – Africa: In search of gems


March 28, 2012
Subject | Active management | Commodities

In February, I spent some time in Capetown, South Africa for the annual Investing in African Mining Conference. Unlike many mining conferences, this event is more industry-focused than investor-focused. The participants ranged from suppliers and geologists to executives and engineering companies. And there were investors like me.                

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