Tag Archives: Junior mining stocks

The Next Bull Move In Mining Stocks

The big rally in Q2 continued into Q3 until early August. At that point, all of the technical and sentiment indicators I monitor were registering levels which indicated that the speculative frenzy that developed in July had reached the point of “boiling over.” I see the decline in the sector that began in early August as a healthy “corrective” pullback that will set-up the next move higher.

The precious metals sector made a big run since mid-March, outperforming every asset class with the exception of a handful of insanely overvalued tech stocks. When a market makes a big run like we experienced in Q2, it’s not unusual to run into some interference while it consolidates and percolates for the next move higher.

Contrary to popular myth, it’s impossible to time a market top or bottom unless complete luck is involved. It’s always good to keep cash on hand to take advantage of opportunities in your favorite holdings or new ideas when the market creates those opportunities.

Bill Powers invited me back onto his Mining Stock Education podcast to discuss the precious metals sector and specifically the junior mining stocks:

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Buying physical gold and silver – not GLD or SLV – should be your first priority in seeking shelter from the eventual fate of the dollar.  But mining stocks offer the potential wealth enhancement as well “optionality” upside to the prices of gold and silver. If you would like some ideas for investing in mining stocks, take a look at my  Mining Stock Journal.

The Precious Metals Bull Market Is Just Revving Up

The monetary “gods” at the Federal Reserve have created the perfect monetary policy recipe to fuel gold, silver and mining stocks to new all-time highs and beyond. While the bubbleheads in the financial media have been garishly cheerleading the general stock market as it heads to an extreme overvaluation that will not end well, the mining stocks have outperformed the big three stock indices by a considerable margin.  As an example, since the March bottom, GDX is up over 100%, while the Nasdaq Composite is up 51.6% and the SPX is up 40%. And the mining stocks are just getting warmed up.

Relative to the prices of gold and silver, the mining stocks are still extraordinarily undervalued. In 2011 when gold peaked at $1900, the HUI index was trading over 600. It just recently crossed over 300.

Bill Powers of Mining Stock Education and I discuss the bullish set-up for the precious metals sector, including the gold/silver ratio, specific junior mining stocks and a couple other timely topics:

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You can learn more about the Mining Stock Journal by following this link:   MSJ Subscription Info.  In the next issue released July 9th I discuss several of the stocks I follow, recommend and in which I invest, capital management strategies and I present a junior exploration “venture capital” idea that has the potential to be a 5-bagger from its current level.

The Bull Move In Gold, Silver And Mining Stocks Is Just Getting Started

The current financial and economic environment supporting a significant and durable move in the precious metals sector is similar to conditions in 2000 through 2008 that fueled the 11 year run from 2000 – 2011.  Only this time those factors – Fed money printing, a collapsing financial system and massive financial asset bubbles – are several multiples more powerful.

Bill Powers invited me onto his Mining Stock Education podcast to discuss risks involved in investing in junior mining stocks, use of stop-losses and attributes which underlie junior exploration projects that become successful, including a couple junior stocks I think could do well in the next few years:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Note:  I do not receive any promotion or sponsor payments in any form from the mining stock companies I present in my newsletter. Furthermore, I invest in many of the ideas personally or in my fund.

Cheap Oil And Money Printing: Rocket Fuel For Mining Stocks

“Gold, unlike all other commodities, is a currency…and the major thrust in the demand for gold is not for jewelry. It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.” … Alan Greenspan, ex-US Federal Reserve Chairman, August 23, 2011

For now the price of gold has found resistance – likely official resistance – in the high $1700’s. I think there’s a good chance gold pops over $1800 before Memorial Day weekend, if not sooner. Silver continues to frustrate but the gold/silver ratio appears to be headed lower. Patience with silver will eventually be highly rewarded and rewarded in spades with the silver mining stocks.

Bill Powers of Mining Stock Education invited me to chat about oil, the economy, money printing and mining stocks:

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You can learn more about  Investment Research Dynamics newsletters by following these links (note: a minimum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information   –   Mining Stock Journal subscription information

Bullion Shortages Will Push Junior Mining Stocks Higher in 2020

The chart above shows the ratio of GDXJ/GDX. Although I don’t consider GDXJ to be a junior ETF per se, the GDXJ index does contain smaller cap, later-stage juniors and smaller cap producers. In that sense, it offers slightly higher risk/returns than GDX. That ratio has popped above the downtrend line that was established at the peak of the last bull cycle in the sector.  Prospectively, as long as it stays above that trendline and moves higher, it’s a great indicator that the precious metals sector will stage a big move higher for the next couple of years.

Trevor Hall and I discuss the physical bullion shortage developing in London and New York and why the precious metals sector will likely make a big move in 2020 – click on the graphic below or this link to listen:

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I cover several junior exploration stocks with upside that is several multiples of their current price. I also specialize in looking for value plays in larger cap producing miners as well as reviewing stocks to avoid.  You can learn more about this mining stock newsletter here:   Mining Stock Journal information.

NOTE: I do not receive compensation from any mining stock companies and I do not accept any precious metals industry sponsors. My research and my views are my own and I invest my own money in many of the stocks I present.

With The Return Of QE, Mining Stocks Are Cheap

There’s a strong probability that the Fed’s “non-QE” QE operations will morph into a full-blown money printing program that will exceed the one implemented starting in late 2008. The same fundamentals variables that fueled a massive move in the the precious metals sector from late 2008 thru mid-2011 have resurfaced with a vengeance.

The pullback in gold, silver and the mining stocks that began in early September appears to have run its course. Currently the entire sector is technically and fundamentally set-up for a big run into the end of the year. The re-activation of Indian imports last week for the first time since June will give the coming bull move a powerful boost.

Bill Powers of MiningStockEducation.com invited me back onto his podcast to discuss some of the stocks that I believe will outperform the sector. These three ideas are among several that I cover in my Mining Stock Journal:

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The Mining Stock Journal  covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers.  You can learn more about this newsletter here:   Mining Stock Journal information.

Subscriber feedback: “I am a professor of aerospace engineering. I have studied and invested in junior mining stocks for 25 years. I have learned much about this sector. The stocks that you have recommended since starting MSJ have outperformed the other junior investment services that I follow. Perhaps one reason is that, because your service has a smaller circulation, you can find and recommend smaller companies that have not been discovered and cannot be recommended by services with huge circulations.”

Massive Bull Run In Gold And Silver Is Just Starting

Several Central Banks already buy stocks and bonds with printed money, including the Bank of Japan, Swiss National Bank and the PBoC.  It now looks like Germany’s Bundesbank is going to begin dabbling in the German stock market, extending  its market invention beyond the bond market.

I’m certain the United States’ Exchange Stabilization Fund buys at least stock index futures, if not the shares of companies deemed essential to “national security.”   Given Trump’s tendencies toward dictatorial decrees (see “The Wall” debacle), I suspect eventually he’ll order the Fed to print money and buy stocks directly rather than by proxy via the ESF in an effort to keep the stock bubble from blowing up in the context of a deepening economic recession.

Bill Powers invited me onto his Mining Stock Education podcast to discuss why I believe the move in the precious metals this summer is just beginning.  We also discuss why it will pay off to focus on junior exploration “venture capital” companies, many of which will throw off 50-1000% returns (or more) if gold and silver continue to move higher:

If I’m right, and if the metals continue moving a lot higher, we should start to see stocks like AG move well above their 2016 highs. Eventually many of the juniors will be 3-5x higher than their current level. We got a taste of the type of moves juniors will start to make this week.

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The Mining Stock Journal  covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers.  You can learn more about this newsletter here:   Mining Stock Journal information.

Gold, Silver, Mining Stocks: Quo Vadimus? (Where Are We Going?)

The chart above was sourced from spiralcalendar.com with a couple edits of mine. It shows the S&P 500/gold ratio going back to 1980, when the 1970’s gold bull market culminated. I believe before the a complete financial “reset” is imposed on the global financial system, we could see the SPX/gold ratio fall to the level it hit in 1980.

A subscriber asked me if I thought that the fact that stocks like AG, EXK and HL, among many others, are only 50% as high in price as they were when silver hit $20 in the summer of 2016 is a red flag.

I said that I do not see it as red flag for the sector. Rather, I see it as just one measure by which mining shares are extremely undervalued relative to gold and silver and to the rest of the stock market. I always thought that the mining shares ran up in price too quickly during the 2016 rally. The GDXJ rose 300% in six months and investor sentiment had become far too frothy.

In my observation of the moves in the sector from 2001 to mid-2006 and from November 2008 to mid/late 2011, gold and silver lead the sector at first, followed by the large cap producers, with the juniors lagging and then outperforming gold/silver/large caps. That seems to be the progression unfolding now.

If I’m right, and if the metals continue moving a lot higher, we should start to see stocks like AG move well above their 2016 highs. Eventually many of the juniors will be 3-5x higher than their current level. We got a taste of the type of moves juniors will start to make this week.

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The Mining Stock Journal  covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers.  You can learn more about this newsletter here:   Mining Stock Journal information.

“Thanks for today’s latest issue. It’s value to me is increasing with time.” – From “Greg”

Barkerville Gold: Quickly De-Risking And Undervalued

Barkerville Gold (BGMZF, BGM.V) is advancing it Cariboo Gold Project in British Columbia.  The Cariboo Project is a district-scale, massive land package loaded with gold mineralization (over 110 gold-bearing streams on the property).  Osisko Mining took operational control of the Project, with the transition beginning in mid-2015.  Chairman, Sean Roosen, took the old Osisko Mining’s Canadian Malarctic Project purchased for about $90,000 and developed it into what is now one of the largest gold mines in the world, selling it to Yamana/Agnico-Eagle in deal worth nearly US$3 billion.

BGM currently has a resource consisting of a little more than 3 million ozs of measured, indicated and inferred gold averaging 6 grams/tonne.  It also has an operating mine at the Bonanza Ledge/BC deposits which has been successfully tested recovering over 20,000 ozs of gold at a 91% recovery rate.  This is important for two reasons:  1) the mine will used to generate cash flow to help fund the massive exploration program in progress; 2) it confirms that the ore can be extracted economically at the current price of gold.

The current market cap of BGM using the 555.6 million fully-diluted share-count is US$194 million. It would be a mistake to dismiss this investment opportunity because of the high share-count.  The resource could easily end up at least 3-4x larger than the current 3 million ozs. with a production profile of 400-500,000 ozs of production  per year.  With a higher price of gold, this company has $1 billion market-cap potential. Even if there’s 1 billion fully-diluted shares outstanding at the time, that’s a triple from the current price.  That said, I can guarantee that Sean Roosen did not just invest another $1mm of his own money for only  a triple.

You can view a webcast presentation of Barkerville by BGM’s President/COO, Chris Loder, with intermittent comments from Sean Roosen by clicking on the link below.  The webcast is hosted by O&M Partners, which produces live management presentations of mining stocks for retail/high net worth/small institutional investors.  I have found these webcasts to be invaluable. I was invited to give brief opening remarks on gold and junior mining stocks  (note: you will need to fill out form with your name and email information – this will only be used by O&M to invite you future webcasts):

BARKERVILLE GOLD MINES Management Presentation

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You can learn more about Vista Gold and other highly undervalued junior mining stock in the Mining Stock Journal:   Mining Stock Journal information

Paramount Gold: An Undervalued Advanced-Stage Junior Gold Stock

Paramount Gold (PZG) owns a 100% interest in the Grassy Mountain Gold Project in eastern Oregon and a 100% interest in the Sleeper Gold Project in northern Nevada. PZG acquired Grassy Mountain (GM) in July 2016 via the acquisition of Calico Resources for $15 million in PZG shares. GM has a total resource of 1.65 million ozs of gold (mostly measured) and 4.96 million ozs of silver. Of this, 504k ozs of the gold is underground with a grade of 5.32 g/tonne. The rest is 1.15 million ozs of low grade, open pit resource. PZG now controls all of the mining claims within its 10,000 acre Grassy Mountain land package.

Contrary to what one might think, the State of Oregon is highly supportive of developing the mining industry in eastern Oregon.  At this point, PZG is in the final stages of permitting. The Company has already received preliminary outline proposals for financing mine construction. The existing PEA shows a project with an after-tax NPV of $87 million. The market cap of the stock, fully diluted, is $30 million. Because of the high-grade nature of the underground material, at higher gold prices this project is a literal cash cow.

The Sleeper Gold Project is a former high-grade open pit gold mine operated by AMAX Gold from 1986-1996 (AMAX closed the mine due to the falling price of gold). It produced 1.66 million ozs of gold and 2.3 million ozs of silver. This asset has over 4 million ozs of low-grade measured, indicated and inferred resource. With a gold price a few hundred dollars higher, this project is potentially a home run for a large mining company.

My colleague, Trevor Hall, sat down with PZG’s Executive Chairman, John Seaberg, to take an in-depth look at Paramount’s operations (you can download this podcast from 11 different platforms – MSD apps) :

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