Spring Edition Newsletter |  Release One of Four

Canada’s Resource Sector
- Perception is Reality

During 2007, Canadian resource companies undertook significant drilling activities as strong commodity prices have encouraged exploration and development of resource assets. Our Portfolio Manager, Jim Huang, believes that this robust level of drilling and activity bodes well for continued demand by Canadian resource companies for flow-through equity funding.

Companies in the resource sector are world leaders in spawning high-tech services and manufacturing industries, such as geometrics, robotics, optical controls and environmental engineering, and in applying these new technologies. The industry works closely with suppliers of research services and leading-edge technologies, and with customers to produce value-added products.

The sector’s long-term outlook has never been brighter.
Resource growth potential will continue to open doors for attractive long-term equity returns.

“The resource sector is a vital generator of living standards in Canada and boasts a strength and diversity that is matched by few nations around the world,” says Derek Burleton, an Associate Vice President and Senior Economist with TD Bank Financial Group.

The country’s status as a favourite global resource player has even more to do with the sector’s prominent position in the global marketplace. About one-fifth of mineral exploration expenditures are targeted for Canada, surpassing all other countries and the country is a world-leading producer in virtually every key area.
Canada’s resource-heavy financial markets will also be more susceptible to swings than those in most industrialized countries given that commodity prices are increasingly influenced by global investors – rather than commercial-flows.

“Geographic diversification is an excellent way for investors to manage the risk of short-term gyrations in Canadian equity markets that flow from ups and downs in commodity prices,” comments Jim Huang, Portfolio Manager.

Canada’s resource sector a big player internationally

Canada’s resource sector has a prominent position in the global marketplace. About one-fifth of mineral exploration expenditures are targeted for Canada, surpassing all other countries and the country continues to be a world-leader producer in virtually every key area. There are perhaps a few other nations that might compete with Canada in terms of diversity and size of resource wealth, such as Russia. But, if you take into account this country’s low political risk and open access to the US markets, Canada is second to none.

 

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