gold and copper the big plus

Can't help but think of TTRs Phillips River Project when I read analysts views about the positives for new copper and gold projects as the world moves into economic recovery mode.

It is the new discoveries (the ones ready to go) that will benefit most over the next couple of years. As demand picks up with manufacturers restocking inventories, supply will be stretched, which suggests commodities and copper in particular will do very well. Copper will hold above US$2/Pound and possibly peak up to US$4 during 2010/2011 and match highs of the last cycle. Infrastructure projects have been driving demand recently but over the next 12 months to 2 years manufacturing and housing demand will also kick in.

For Gold there are so many positives but the main one is inflationary pressures that will flow on with the recovery. Gold is likely to hit new highs later this year and next as the value of the US$ comes under pressure. Globally gold and other commodities are seen as the best hedge against inflation. Why has China been spending its cash reserves to stockpile commodities, buying overseas miners and increasing their gold reserves - because they are smart cookies.

Not pre-empting their Scoping Study, it is pretty obvious TTR will initially target the shallow Gold / Copper resource with multiple smaller open pits at Kundip and a larger open pit at Trilogy. With mining and production anticipated to be at the lower end of the cost spectrum due to the simplicity of the deposits and metallurgy, early cash flow will be strong and essentially will self fund Kundip underground and extensions to Trilogy "deeps".

Although shrewed advisors are nominating some of the better know copper gold projects coming on line over the next two years their share prices have already started to factor in what the experts are predicting. However, even better gains I suggest will be seen with some of the smaller juniors like TTR (and BSM - sorry but that another favorite of mine).

There are some that say the world economy could still swing further down and into chaos and kill of any hope of recovery. If that is the case Gold will go through the roof. 60% of Phillips Rivers value is in gold so the project has it good both ways. The only risk in my mind is if recovery is thwarted with global stagflation.