The direction of the global economy remains a subject of much debate. The juxtaposition of thriving emerging nations and the stagnancy of the U.S. and Europe have been the source of considerable confusion among analysts struggling to determine the next move. Investors too are in the unique position of attempting to successfully position themselves for an uncertain market. There are few options capable of strength in any economy.
Some choose to invest in gold, on a decade long bull run, as complicated financial systems heighten the risk for volatility. The threat of inflation and a weak dollar both increase gold’s appeal.
There’s also copper, which may benefit from the current construction and production booms in China and other emerging nations. Should development in these countries continue at its current rate, the demand for industrial metals of this kind will rise.
There are elements that could favor both gold and copper, potentially simultaneously, given the growth disparity. An investment in Red Metal Resources (RMES), a mineral exploration company with four copper-gold assets in Chile, accounts for both of those scenarios.
Exploration companies with dual assets like this are unique and could be considered especially attractive during the present economy. For Red Metal, that appeal is compounded by the fact their interests lie in Chile, a nation that has only recently authorized investment in their rich mining industry.
"Chile is one of the top countries in the world to be mining in," says Caitlin Jeffs, President and CEO of Red Metal Resources. "It is a mining country, absolutely. That is what they do. Chile produces 34 percent of the world's copper, therefore, we were attracted to it because of that reason, and also the potential in the properties. The areas that we're looking in are very unexplored."
The delay on permitting mining has positioned Chile well for the current market where metals, especially gold, are pricy and in high demand. Today, there are uninvestigated areas of Chile with significant potential for metals. In light of the strong demand, these metals will offer greater possible profit than they would in another economy.
The robust potential for metals in Chile and consequently for Red Metal are evident in the results from the company’s most recent sampling program. The returned assay results of reconnaissance samples taken over its 100% owned Mateo Property in Chile revealed considerable promise. A recent detailed mapping and sampling program over Mateo samples collected on multiple mineralized structures from mantos, veins and mineralized breccia bodies showed strong levels of both copper and gold. 36 of 138 samples returned Au results greater than 1.00g/t Au while 59 of 138 samples returned Cu results greater than 1.00% Cu.
The Mateo property is only one among several in the Red Metal repertoire. The Farellon project, which the company acquired in 2008, is Red Metal Resource's premiere and most advanced. In April of this year, Red Metal raised $2 million through a private placement to begin drilling at the site as well as to fund other parts of its operations.
"That project for us is quite fantastic," says Jeffs. "It has copper and gold, so it has a sort of internal hedge depending on which way the economy is going to go.”
Mateo’s latest investigation has proven a comparable asset. Red Metal, as Jeffs points out, through its various properties and the wealth they maintain, appears well-positioned for the twists and turns the global economy is likely to take in the upcoming months and years.
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