One common criteria that value investors are looking for is cash flow and which companies have the ability to increase earnings. Keep a close eye on emerging gold and silver producers in mining friendly jurisdictions looking to increase production, resource growth and of course cash flow. Over the past few months I alerted you that there are emerging producers in mining friendly jurisdictions that may be a better bet than some of the large majors who have made some very risky moves in high cost projects in questionable places. I originally highlighted one junior miner in a piece entitled "Why Cash Flow Is Crucial To Gold and Silver Mining Investors", before the company began production. In that article I wrote,"I believe the recent acquisition of shares by Gabelli and U.S. Global Investors may just be the beginning of major institutions becoming aware of this emerging Nevada producer." Now three quarters later the institutions have increased their holdings from 5 million to 14 million shares in search of value and cash flow. In addition to Gabelli and U.S. Global, Century Management a value investing fund from Texas with over 2 billion under assets bought around 4 million shares in the last quarter.Read more
Time to Buy Junior Potash Mining Stocks?
Potash is a fertilizer that is critical for emerging economies with rising populations that need increasing amounts of food. Most of the supply is controlled by a handful of companies such as Potash Corp. of Saskatchewan (POT) and Mosaic (MOS). These companies control pricing and some of the large consumers may want to secure more affordable long term supplies from quality juniors. If demand increases, the majors may not be able to boost mine output. The large caps may be ready to break out as prices find support at decade long trendlines and the juniors are all beginning to show signs of life.Read more
A Junior Gold Mining Survivor In Nevada and Colombia
There is no doubt about it. Junior gold mining companies are going through a time of testing. Gold and silver prices are basing at multi-year lows. Financing markets are tough for junior precious metal miners. Many of these companies will not succeed in these difficult times without a strong treasury and shareholder support to weather the storm. These corrections separate the quality junior miners from the weak ones as the smart management teams pick up quality assets for pennies on the dollar and actually build value during these cyclical corrections. This is the evolutionary way of the markets to weed out the weak entities. Junior mining investors especially during these trying times must constantly reevaluate and make sure their junior mining investment has the ability not only to survive this market, but to possibly thrive in this environment by picking up quality assets on the cheap. Instead of exploration capital being put into the ground, there may be opportunities in undervalued assets, if you are connected to the right technical team.Read more
Bullish Engulfing Pattern In Gold, Silver and The Miners May Signal Near Term Bottom
We saw gold, silver and both the large and junior miners dip lower at the open and close above Friday's high on more than triple average volume. This is a significant technical development as it means the gold bulls have regained control at a key technical low. See the following charts...Read more
Is The Uranium Price Forming A Potential Double Bottom Breakout?
While most of the resource market has been in red, I am witnessing one of our sectors, the uranium miners (URA), solidly in the green. They are being led by one of our long term uranium recommendations. Recently one of our long term recommendations announced good news that they were granted $20 million from the State of Wyoming to fund completion of construction at Nichols Ranch. In today’s market environment where resource capital is hard to come by, to see this form of support through non-dilutive and low interest rate loans is truly remarkable. This is a testament to the quality of the companies assets and the management team.Read more
Turning Point For Uranium and Rare Earth Miners?
This recovery in the large rare earth miners may prove to be a turning point for the junior rare earth developers of critical and heavy rare earths. In 2010, rare earth prices exploded as diplomatic tensions built up with China. The demand for these metals are rising exponentially as they are used for smart phones and TV’s which is just entering the emerging world. In the Western World, there are more than seven screens per household. In China there is less than one.Read more
Look For Bullish Reversal In Uranium Miners As Electricity and Air Pollution Rates Soar
The uranium price is down 40% percent since the Fukushima disaster in March of 2011 as Japan and Germany made a political, knee-jerk reaction to shut down reactors and rely heavily on natural gas. Many investors continue to look backwards, contrarians like us take a look forward. Natural gas is above $4.25 and rising. It has doubled over the past year. The Fukushima reaction may have been a boom to natural gas in the short term, but utilities are passing on the high costs to consumers. Japan and Germany who have relied on importing natural gas now have some of the highest electricity costs in the world and this is causing a major backlash from domestic industries. Consumers are being crippled by these high rates. Voters have elected in a pro-nuclear government in Japan and may oust Germany's Merkel as the economy is on the brink of recession.Read more