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June 8, 2009 Dear Friend, We are pleased to report we received a plaque from First Coverage indicating we were the third best stock pickers in the natural resource sector last year that they monitored. Further, we are #1 in 2009 ytd in natural resources and #6 out of more than 800 across all sectors. We continue to work hard. Attached are reports on China's Next Investment Alternatives, Thompson Creek Metals and our weekly Spot Market Review. The rejection of potential large investments in Rio Tinto and Oz Minerals may incline China to build even larger stockpiles of gold, crude oil or individual base metals beyond the prior plans. Chinese policymakers distain large holdings of the U.S. dollar, treasury bonds or other financial instruments. Their quest for hard assets continues. They best way to play it may be the very large diversified mines, such as Overweight rated BHP, Rio Tinto, Vale, Teck, Xstrata or Anglo-American or individual large cap mines. Translation, due diligence, negotiations and decision-making take time. The same government officials travel throughout China to make both domestic or overseas capital investments. They do not have "capacity" to make more than one big new decision each month, in our opinion. It may be simpler to build stockpiles, make domestic mining investments in China or make infrastructure, social or military investments in China. We downgraded Thompson Creek to Neutral owing to price appreciation and an estimated 195 mm lbs of potential increased moly supplies. We note that the inventory trends in aluminum and copper reversed last week, as well as the price trend for gold. Faithfully, John C. Tumazos |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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