Canadian Mining Companies Operating Abroad

November 23, 2009

Good Morning

Canadian Mining Companies Operating Abroad

I have frequently stated my belief that one risk element that must take center stage in any thoughtful investment research and analysis of a company are the politics, economics, and prospective economic well-being of the country(ies) in which that company principally operates. That is one important reason StockResearchPortal.com categorizes each mining and oil & gas company in its Company Universe by it business 'type' (e.g. explorer or producer) and the geography in which it principally operates. You can find these categorizations on the 'Company Overview' page on each 'Company Data Page' in our website, in the 'Compare & Rank Companies' data component in our website, and in several other tables and data components in our website. You can also review the latest write-up on countries in which companies in our Company Universe principally operate by visiting 'Economic Research' on our Main Nav, clicking on it, and then clicking on 'Country Specific Economic and Political Commentary' found on top of the left Navigation Bar of the resultant webpage.

I recommend you read an article titled 'One man's defence of a national reputation' in its entirety by clicking here. The article discusses a Private Member's bill currently before the Canadian Parliament that "aims to impose controls on powerful Canadian mining companies that operate overseas". The Conservative Party, who currently operate under Canada's Parliamentary System of Government as 'minority government' (the party with the largest number of Members of Parliament, but without a majority of those Members) are reported as having "vowed to kill the bill", which apparently is going to be debated in a House of Commons Committee this week. The Bill is opposed by Canada's Mining Industry which is reported in the article as:

· being comprised (in 2007) of 1,373 mining companies listed on the Toronto Stock Exchange ('TSX');

· having had (in 2007) 79 billion shares traded on the TSX collectively valued at Cdn$482 billion;

· representing 60% of all world mining companies;

· representing 43% of total world mining exploration; and,

· allegedly having violated human rights in 30 countries, in circumstances the companies say they have done nothing wrong and, where there are no Canadian laws that regulate mining companies abroad.

Canada's International Trade Minister Stockwell Day is reported as saying there will be no legislative action because it would not work, the companies do not need it, and "one country doesn't develop laws that apply in another country".

The article also reports that while Canada's Members of Parliament consider controls, foreign pension funds have signaled they won't invest in Canadian mining companies unless they adopt firm corporate responsibility rules abroad.

My comments on all of this are:

· first, having spent my adult life as an objective expert witness in major corporate litigation matters I can tell you unequivocally that its is easy to allege wrong-doing, that there are two sides (or more) to every story, that in litigation plaintiffs (i.e. in this case the countries that are protesting) often act for opportunistic reasons that go beyond the claims they make, and allegations in lawsuits often 'overreach' and are 'overstated'. Stated simply, while I recommend you click here and read the referenced article, I suggest you do not leap to the conclusion that Canadian mining companies who operate abroad are guilty of anything until a Court decides otherwise;

· second, that mining (or any other type of) companies operating abroad have documented 'corporate responsibility rules' makes good sense to me as part of a company's overall Corporate Governance. While I don't know how many companies operating in foreign jurisdictions have such 'documented rules', I expect many do - and that going forward any that don't likely will create such documentation; and,

· three, I think the fact that the referenced Private Member's Bill has been put forward should be seen by investors as nothing more but something that focuses them, not on the behavior of the Canadian mining companies in foreign jurisdictions, but on the question of how (if at all) the politics and economics of any particular jurisdiction influences the 'risk profile' of a company operating in that jurisdiction.

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Best Regards,



Ian R. Campbell
President
StockResearchPortal.com