The Critical Metals Report: Siddharth, despite the poor price performance of critical metals equities since the fall of 2011, most of the prices for the underlying commodities have indicated relatively stable demand. What's your view?
Siddharth Rajeev: It's tough to generalize on the mining sector because each critical element has its own supply and demand drivers. We have a positive outlook on a few elements; this is not so with others. However, it's true that commodity prices have not dropped as much as equities. If you look at industry data, you can see that mining companies are in a much better position now compared to four or five years ago. For example, the margins, return on equity and balance sheets of gold and copper producers have improved significantly over the past five years. Despite that, why is the TSX Venture, 50% of which is comprised of mining companies, down by 60%? I believe that the market is overreacting, just as it did in 2008. Therefore, we believe there is a good opportunity to buy quality assets at this time at cheap valuations. Continue reading "REE Stocks Are Down but Not Out: Siddharth Rajeev"
