TORONTO, ONTARIO -- (Marketwire) -- 01/09/13 -- MacDonald Mines Exploration Ltd. (TSX VENTURE: BMK) ('MacDonald' or 'the Company') provides a mining industry update and an outline of its drill program scheduled for early 2013 to advance its potential VMS discovery at the highly prospective Butler 3 location (see Figure 3). The Butler property is located 36 kilometres west of Cliffs Natural Resources ('Cliffs') Big Daddy Chromite deposit (Click here for map).
Kirk McKinnon, President and CEO of MacDonald Mines comments, "As we enter 2013, MacDonald Mines believes it is important to provide a current backdrop for junior mining exploration companies. We find it extremely ironic that both the Prime Minister and the Ontario Premier have outlined natural resources as a prime catalyst for growth in the country and in the province of Ontario respectively. Specifically, Premier Dalton McGuinty outlined the James Bay Lowlands and Natural Resources as a prime catalyst for growth within the province. With this as a backdrop, we wonder why large trading institutions are allowed to impact junior mining stocks with high frequency trading (as profiled in the Financial Post, October 10, 2012 and the Huffington Post) and also receive trading credits from the TSX in return for placing bids. We are aware high frequency trading is active in the United States but has been banned in some jurisdictions. It has less impact in the United States because of the sheer critical mass in the number of stocks and the number of shares in their trading jurisdictions. Compounding this, large Canadian national banks have certainly discouraged, and all but disallowed, any trading in junior mining stocks. This makes it extremely difficult for their clients to even consider these stocks as part of their overall portfolio or as opportunities for making money. We realize that exploration stocks are high risk and do require some expertise and insight on the part of shareholders but they can also play a role in a balanced portfolio where it constitutes a small percentage of the total investment.
"So what is happening to junior exploration companies? In capsulated form, financings are becoming increasingly difficult to arrange, the stocks are at much lower prices versus historical levels; mostly because credible information and exploration success is not resonating and consequently the junior resource stocks have little or no resulting upward movement. The consequence of this is that much needed financings for exploration activity are now being transacted at historical low prices, creating an environment of super-dilution and a growing lack of interest for investment in this sector. The result: investors are moving away to similar types of investment opportunities in the high-tech and bio-tech industries.
"There are dire predictions that over half of the junior mining companies will disappear within the next few years (see articles from mining industry analysts and writers Brent Cook and John Kaiser) MacDonald is not sure whether our political leaders realize or care that the disappearance of such a large amount of these companies will constitute major layoffs in personnel and the country will likely lose key exploration scientists such as geologists and geophysicists whose experience, as well as the ongoing opportunity for experience, will be gone forever. Equally important, Canada will lose a significant portion of an industry whose participants today are recognized as the world's best.
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