I’ve stated for months now that the junior resource industry has been badly damaged and even long after metals prices and the market have bottomed, much of what we knew the industry to be will have either been changed dramatically or be gone forever.
Given one of my livelihoods is being a compensated consultant to companies that make up that industry, such a belief shall likely not be beneficial to me. You can be assured some will not like hearing those words from my mouth (It’s already been expressed by some recent clients who I now call “ex”).
There’s no joy in this stance and losing millions of dollars speculating on juniors and many client companies throughout the ordeal is not exactly what the doctor ordered for my sanity. However, as much as a few poor souls would have you think, me and Hebrew National have one thing in common – we both answer to a higher authority.
I felt both gold and the mining shares bottomed of late and the lift we’re seeing in gold now should help us begin a decent rally off the lows in mining shares for at least the foreseeable future. With that in mind, I’m going to give short but to the point analogies of Grandich clients ; plus one former client who dislike an honest evaluation of mine to the point that it help lead to my ouster
Alderon Iron Ore – There’s a belief by some that iron ore demand is going to fall off sharply and that’s the only known legitimate reason I can conclude to have led to the share price falling under a buck. To those who don’t see such a negative iron ore price, ADV is a compelling speculation. IMHO, the company that paid more than twice the current price for a 25% stake, could conclude a bigger interest (or the whole enchilada) at these greatly reduced prices is worthy. ADV management has done a superb job (wish I could say that about every company I’ve been engaged by) and much of the depressed share price is out of their hands.
Big North Graphite – In 2+ decades of dealing with the principles of these juniors, I’ve found very few of them who have demonstrated a truly sincere and dedicated personality filled with compassion and void of ego. NRT may be a small junior with the typical uphill battle, but it’s led by a giant of a young man (Spiro Kletas) who would be among the small minority of people I run into a burning building to save at a Vancouver promoter’s conference.
Excelsior Mining – All I can get from management is they’re in the midst of corporate developments that if prove worthy, it can greatly enhance the future of the company. Obviously if not, we could be up the creek. Mark Morabito and his staff fight the good fight so let them keep swinging as long as they can.
Geologix Explorations – I was a participant in their recent small private placement. This is a well advanced project that still makes sense even at today’s metals prices. Management has suggested they could find a vehicle that can drive them done a lane other than simply equity financing to move this project forward. The man at the wheel, Dunham Craig, has been very upfront with me for years so I’m giving him a chance to steer us through this storm and come out the other side with the top down and cruising music playing on the radio.
Precipitate Gold – Please read my latest Q & A with Jeff Wilson (who is another young man I try to rescue with Spiro).
Prima Fluorspar Corp – It started trading in the worse junior market in history, but the fact that it held its own was worthy. This is a very speculative but interesting play that the biggest of gamblers should take a hard look at.
Sunridge Gold – I’ve just about doubled my position in SGC, including biding for 500K shares this morning. My thinking may be only logical to me but when I look at what’s left of my portfolio (its about 75% less than two years ago) and I say what company remains that has the most assets in the ground and selling for the least, its SGC hands down. So like a gambler who’s getting killed at a crap table (been there, done that), I’ve decided to press but will be killed if the man yells “seven-out”!
As I said earlier, I just can’t imagine how they can’t attract bigger fish given the enormity of their projects and how advanced they are. Come on SGC, daddy needs a new pair of shoes!
Timmins Gold - Has been without a doubt, the best performing client company bar-none. I suspect it can be a takeover target and should bounce nicely on any further gold rally.
And finally Oromin Explorations, my Albatross of all Albatross (OLE can only say adios once over me saying it). While nothing would surprise me anymore, I find it highly unlikely (but be the first to admit I was wrong) that a “White Knight” shall come in and lift us all. In the end, it should be what it would have been all the way back to December 2011 (if not for circumstances that have come to light in recent filings) – OLE and TGZ merge and we become TGZ shareholders.
It’s my plan to tender my shares before the deadline barring a rabbit out of the hat.