Mining slump has paved the way for smaller,more bullish resource companies

Introduction Our society is currently experiencing a change in civil philosophy toward US industrialization. We have become increasingly bent on the pursuit of a nirvanic state of zero risk. The money supply has become inversely proportional to its sources. And most mining companies, traditionally conservative, have become increasingly risk conscious. Rising taxes, high inflation, and decades of a steadily decreasing gross national product (GNP) - coincident with moral decay and disarmament - have eroded America's economic health. Psychology of US metal markets has shifted across the economic spectrum to disillusionment and discouragement. The sagging national economy, expanding governmental debt, and a backward mineral policy in concert with worldwide unrest and turmoil have caused great volatility in the metal markets. Congressional inaccessibility of US resources has contributed to its loss in strategic leadership and dependency on foreign suppliers and the common market. Large scale mining activities are now on the decline. And there is an overall slump in mineral exploration in this country. America now faces the sobering reality of almost total importation of 13 key mineral commodities and total dependence on foreign sources for five of them. There is a growing dependency on 21 of the 34 minerals vital to the US economy. And virtually everything needed can be imported directly from third world countries. Almost 85% of the free world's supply or production of vanadium, chromium, platinoids, manganese, and titanium - an essential to the aerospace industry - comes from South Africa. That country now plays a forefront position in supplying the West with minerals. The Soviets have become increasingly aware of this situation. They have made key moves in procuring for their own purposes major raw materials markets, particularly in South Africa. This is obviously threatening to the US' direction and brings about vulnerability to shortages and cutoffs. In spite of these developments and the overall change in the mining industry, there is good opportunity for growth ahead. The way has been paved for the smaller mining companies, particularly the more bullish of these. Smaller mining organizations possess a tight management and strong sense of direction. They can easily adapt to and cope with change. "Windows" that exist in the industry directly depend on a number of factors. These include the busi¬ness climate, market research and planning, management and human resources, applied appropriate technology, favorable hunting ground, and entrepreneurship. Mining as business Mining (and exploration) as a business is by its very nature highly speculative. It involves greater risk for a longer period of time than most other businesses. The entire mineral estate in the US continues to shrink. This is primarily because of various legislated wilderness measures. Consequently, the probability of finding an economic ore deposit in the US has decayed to less than 1%. Although the risk is high, the stakes far outweigh the gamble and are larger than most other businesses can offer. Mining properties, as investments or business opportunities, can provide effective hedges against long-term inflation because the real price for selected commodities, such as gold, may sometimes rise faster than inflation. Recessionary periods seem to provide the best climate for entering the mineral business or for a particular mining organization to expand its activities. Looking ahead and seizing opportunities during a depressed market will pay off. Property payments and royalties are likely to be lower. And the potential for an upward shift in prices for a given commodity is very positive. The decision to invest in a prom-