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Friday, August 6, 2010

Will Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA), NovaGold (AMEX:NG) Be Beneficiaries of China's Targeting Precious Metals and Gold?

Flush with capital, China has been eyeing mining properties and companies around the world for some time to invest in preparation for meeting their needs long into the future.

They recently have increased their scrutiny and commitment, noting the lack of capital available because of weakened credit markets.

Consequently, the central bank of China has instructed their banks to offer credit to Chinese companies attempting to make acquisitions around the world, as well as directly to non-Chinese companies producing gold and silver.

This could strongly benefit companies like Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA) and NovaGold (AMEX:NG), who are sitting on large gold deposits, as those are the types of companies China is targeting to invest in.

Some have been castigating John Paulson for his investment in NovaGold, but in light of the direction China is taking, he's probably going to get the last laugh here, although it'll take a little time for it to take hold. This assumes China investing in NovaGold in some way, but the assets of NovaGold fit into the strategy of China perfectly. So the assumption is a healthy one.

China has already invested in Teck Resources, which has joint ventures with NovaGold, and are surely eyeing ways they can increase their stake in both companies.

For Seabridge, it's their Kerr-Sulphurets-Mitchell project which would be appealing to China, or anyone else interested in the sector that has the capital to invest.

There are of course many other possibilities, but the huge resources mentioned above are surely on the radar of China, and have a high probability of receiving the attention of the middle kingdom, along with a significant investment.

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