When there's a boom in a particular metal, explorers flock to the location, then news media, and then investors. Although booms in a particular area can be exciting, it's easy for investors to develop "blinders" to what else is happening around the world.
There might be some exciting gold developing going on in Alaska right now but other parts of the world are definitely worth noticing. At the recent San Francisco Hard Assets Investment Conference, attendees heard about a lot of different opportunities. And one presenter, Thom Calandra, told the attendees about Africa.
We caught up to him only a few hours after his speech to ask him about it: "This morning we talked about Africa," and then he added, "we also talked about how nobody is making any money in the metals equities market right now but it looks like it's getting a little better. I had a very receptive audience this morning; they believe that we may be at the end of a 6 month terrible drying up of equity values."
Like many experts, Mr. Calandra has a couple of specialties. But his specialties are geographically focused on areas that may not get as much attention right now: "I specialize in a few jurisdictions – West Africa, East Africa, Colombia, and Quebec." So we spent the rest of our conversation talking about some of those jurisdictions.
"My favorite jurisdiction is Ghana. I just love Ghana," said Mr. Calandra. The Republic of Ghana is located in West Africa, and is bordered by Cote d'Ivoire, Burkina Faso, and Togo, and boasts a population of 24 million people. Ghana has one of the fastest growing countries in the world. Mr. Calandra continued: "Ghana has been a democracy for 55 years or maybe longer. It's the longest standing democracy on the continent, just like Colombia in Latin America is the longest standing democracy on that continent. The Kibi gold belt (in Ghana) is relatively undiscovered compared to the other major gold belts in West Africa."
So, what is Mr. Calandra paying attention to in Ghana? "I follow some of the gold producers in Ghana very closely. Two of them include Xtra Gold Resources (TSX: XTG) and African Gold Group (TSX: AGG)."
"I've been going to Ghana for years," said Mr. Calandra. "There's something about Africa that's intoxicating. When you go there you want to keep going back. From 2001 to 2003, Ghana was fairly cheap. Now that gold production is over 3 million ounces per year for the country – and it's been growing steadily every year since the late 1980's – you have to pay a premium." Investors will find that interesting! Mr. Calandra continued: "The Ghana companies – whether they are prospectors or near-term producers – are actually performing better in this sell-off than most other prospectors or near-term producers. You still have to pay a bit of a premium for Xtra Gold Resources and for African Gold Group."
There's a lot of other opportunity in other West African countries, explained Mr. Calandra, and he's paying attention to Sierra Leone, Burkina Faso, and Guinea ("where we're seeing a lot of iron ore right now", he said). And he added something else for investors to pay attention to: "We're seeing a lot of consolidation among West African mining companies right now and I think that's going to continue."
Then we moved our attention to another jurisdiction that Mr. Calandra is paying attention to, Colombia. This South American country is better known (compared to Ghana) for its gold production. Colombia has a population of about 45 million people and its economy has been growing for the past few years. "I love Colombia," said Mr. Calandra. "It's not as cheap as it was in 2007 when I first returned there (I used to live there). There is some tremendous potential for the entire country to once again become the largest gold producing country, which it was in the 1930's and 1940's."
Mr. Calandra then told us about the gold companies he's paying attention to there: "In Colombia, I'm very closely aligned with Bellhaven (TSX-V: BHV) because I own a significant percentage of the company and helped put Bellhaven together and helped install some of the current management. Another company I like is Solvista Gold (TSX-V: SVV)."
Lastly, we asked what Mr. Calandra was doing in the market right now and if there was anything else he was investing in that he hadn't mentioned yet. He told us: "I'm waiting for the tax loss selling to stop and I have been buying some companies lately in the last couple of weeks in November, including African Gold Group and Golden Valley Mines (TSX-V: GZZ). Golden Valley Mines also has property in Quebec and in Sierra Leone. I think there is lot of opportunity in the market."
Mr. Calandra's insight was enjoyed by conference attendees, but what many attendees might not have known was that Mr. Calandra used to cover this show as a newspaper reporter for some local papers. "That was in the late 1980's and 1990's," he said. "I spoke at this show for many years when it was run [by another company] and I'm happy to be speaking again because I'm a local and I know a lot of people in the audience. I'm always pleasantly surprised at the turnout, which can be in the thousands. I hope that this show once again regains the stature it had years ago."
When Mr. Calandra isn't travelling to Africa or South America, he is writing for www.babybulls.com, a site affiliated with an Investor Relations firm.
Baby Bulls: www.babybulls.com
San Francisco Hard Assets Investment Conference: http://www.hardassetssf.com/
Xtra Gold Resources: http://www.xtragold.com/
African Gold Group: http://www.africangoldgroup.com/
Bellhaven Copper and Gold: http://www.bellhavencg.com/inc/
Solvista Gold: http://www.bellhavencg.com/inc/
Golden Valley Mines: http://www.goldenvalleymines.com/