I made some bold bullish calls on gold at the beginning of the year and picked a number of gold stocks that have easily outperformed their peers. My whole argument back then was that I saw a new bull market for gold starting after a multiple years bear market. I picked a group of gold stocks that I felt were well positioned to not only participate in the more bullish market but be leaders.
Recently, I shook up my top group of stock picks because I wanted to make room for new picks. In the new batch, I’m focusing more on my roots in the mining business, exploration. Not only do I see exploration stocks being where the market gets valuations the most out of whack with reality.
I also see exploration being the most poorly covered and the most under-funded segment in the mining business. This creates opportunities, and I have a new addition to my Radar Screen Picks list for you in this report.
Radar Screen Picks are purely for investors looking for cheap stocks they can get in on the ground floor, well before the elevator starts to make the move up to higher floors. These are dirt cheap picks that are under loved and ready for a change. They just need someone like me to come along and help them find a new audience of sharp and patient investors.
A Zombie Stock coming back to life
Tarku Resources (TKU.V)
One of my favourite new shows that I’ve been working on is the Zombie Search and Rescue Mission. In these shows, John Kaiser and I, use the features on Kaiser Research Online website for subscribers, to filter out junior mining stocks that are broke and have tiny market values.
During the bear market that ended in December 2015, over half the companies on the TSX Venture market were in this zombie category. John and I felt that some of them looked like zombies, but had the potential to come back to life.
With the market for junior mining stocks improving, and my belief this is the start of a multiple year bull market for gold that will also help pull up other commodities as well. I recently decided that the best way to cover up-and-coming juniors is in my Radar Screen Picks. The goal is to find ones that become members of my website sponsorship program, so I can take them under my wing and be part of having my audience follow their progress closely.
Tarku Resources came to my attention in the first Zombie Search and Rescue Mission show. What caught my attention was they had a small amount of stock out, they also looked to have an interesting project, and a management team that was working to build the junior. These are the key criteria I look for in a zombie stock that can come back to life. It was an easy thumbs-up call from John and I as a rescue mission pick.
After we covered them on the show, Sylvain Laberge, President and CEO of Tarku, got in touch with me. He was the new leader of Tarku and wanted to talk with me about his goals and game plan for the company. When we met it was clear that he wanted to discuss why he felt that Tarku was not a zombie and explain what they were doing to turn the company around.
Sylvain is based in Quebec and was in Vancouver for meetings so we made plans to get together. At our meeting, he made a really good first impression. One of my pet peeves with juniors like this is management usually wants to talk about why their stock is going to go up. With Sylvain, he wanted to tell me about the efforts he wanted to make as the new leader of the company to build it into a larger company.
If I get the stock pitch, it is usually the first strike against a company. I always want to hear about the people involved, the project and how they plan on funding moving the company forward.
Sylvain told me about the efforts to save the company when it was so down-and-out they couldn’t afford to hold an annual general meeting. This can put companies in danger of being delisted. His team came in to save the company. I could see one key reason was it didn’t have a lot of stock out.
They had also been able to cobble the funds together during the brutal bear market of 2015 to do a geophysical survey over their Chateau Fort project in Quebec. This project is located just off the highway being built for the Renard Diamond mine in Quebec. The past producing Eastmain gold mine is next door and the geological structure that hosts the Eastmain mine also continues onto Tarku’s ground.
In addition to this target, there is another key area on their ground with a solid geophysical target. Both of these areas on the property need sampling to see if they are more than interesting prospects. Their geological team has come up with a modest exploration plan to do surface sampling near these two target areas.
I like the game plan because they have the funds in place to start to test the exploration story. Being located so close to the road, and it being a gold target it could catch the attention of a larger audience if they can find good sample results near their geophysical anomalies.
Sylvain Laberge is an entrepreneur that has been involved in the mining sector for several years, including working with Renmark Corporate Communications. They are a large investor relations firm with a strong roster of clients.
When I met with him, I could tell that he understands his job is to work for the shareholders. It was also clear he gets the big picture to make a success requires building a strong company and the stock will be strong as well.
Another catalyst that could help them grow would be adding more projects. Combined with the exploration sampling work they have the realistic potential to bring a larger audience of investors to the stock.
They have a tiny market valuation, and to make that grow needs someone that wants to take the reigns and build something. They have someone steering the ship and I’m glad to add them at this stage. I will be watching for more developments to show they are determined to turn this zombie into a serious junior exploration company.
All the best,
Allan Barry Laboucan
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.
Website Sponsor Messages
My work is made possible through website sponsorship and consulting; I invite you to check out my sponsors.
Nevada Exploration (NGE.V)
Gold focused in Nevada, using a unique gold exploration method to unlock Nevada’s under-explored regions. Visit their website at www.nevadaexploration.com to do your homework.
Premier Gold Mines (PG.T)
Gold focused, with strong projects from exploration to mining in Ontario and Nevada. Visit their website at www.premiergoldmines.com to do your homework.
Sirios Resources (SOI.V)
Gold focused, drilling high-grade gold target at Cheechoo project in Quebec, located next door to Goldcorp’s Eleanore gold mine. Visit their website at www.sirios.com/en/ to do your homework.
West Red Lake Gold Mines (CSE: RLG)
Gold focused, drilling high-grade gold, targeting Hinge Zone in Red Lake, with Goldcorp as their partner. Visit their website at www.westredlakegold.com to do your homework.
Wolfden Resources (WLF.V)
Base metals focused, with a discovery of high-grade nickel-copper near Snow Lake, Manitoba. Visit their website at www.wolfdenresources.com to do your homework.