Monday, May 10, 2010

MAG Silver (TSE:MAG), Platinum Group Metals (TSE:PTM) Founder Likes Natural Gas

The founder of precious metal mining companies like MAG Silver (TSE:MAG), Platinum Group Metals (TSE:PTM), R. Michael Jones, likes what he sees in the natural gas sector, and is pursuing it with his latest startup, Nextraction Energy Corp. (TSE-V:NE).

Nextraction Energy targets gas development in the U.S., primarily shale gas which has been so abundantly discovered, and over the long-term will change the energy picture around the world, and bring the focus back on the U.S., which used to be the largest oil producer in the world.

Jones especially likes the emerging markets possibilities, where natural gas will serve them as an efficient energy supplement or replacement for oil, which will cost much less.

While in the short term natural gas is expected to remain depressed in price, over the long term it could rise some and stabilize, offering a predictable stream of income for companies positioned to take advantage of it.

But this is definitely a long-term play, as natural gas companies gravitate toward oil for profits in the low-margin, existing natural gas market.

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