It’s over. We have run out of all cheap commodities. Today’s announcement by Barrick Gold is the proof. In a shocking disclosure, Barrick revealed that its proposed mine in Chile will cost 60% more to build. Barrick is not alone in this. Over the past few weeks, Teck Resources, Inmet Mining, Suncor, Kinross Gold and many, many other commodity miners have announced delays or rising costs for many of their projects. For junior miners, it truly is game over. Financing has dried up. Who in their right mind is going to lend money to a miner with no current production?

The headlines have it all wrong. The focus on the demand side is irrelevant. Demand is cyclical and will ebb and flow with the global economy. The supply side however, will be constrained for the foreseeable future. It is laughable that analysts still use $2.25 copper as a long term price. There is no mine being built right now that can make money off of $2.25 copper. Investors take note, the valuations of many of these commodity stocks are too cheap to ignore and too focused on today’s prices.

Disclosure: The author owns share of Inmet Mining. Clients of Baskin Financial own shares in Inmet Mining, Suncor Energy and Teck Resources.