A nice thing about looking for stocks in a market everybody is ignoring, like in gold, silver and other metals, is that you can find really under loved and underpriced stocks.
It is surprising that the mining stocks are so under loved, primarily because the metals they are exploring for and mining are doing very well. And it is not like the metals, lead by gold, just started getting stronger.
Gold bottomed in December, 2015 and then started a new bull market in January, 2016. Yet the gold stocks, for the most part haven't joined the party. If I haven't seen this movie before, I would be worried.
But, I have, this is much the same as the market for gold stocks during the first couple years of the 2001-2011 gold bull market. It was like nobody believed it was for real, this sounds familiar.
The first couple years of that great bull market, also saw the juniors and middle tiers underperform. Then they caught up, and took off to significantly outperform the move in gold.
This is kind of the anatomy of a bull market for gold stocks, especially the smaller names that offer the most bang for your buck.
To me it is a very simple question, are the gold stocks lying or the metals. I happen to think it is gold telling the truth.
Gold has gone through more than a couple decades of under funding exploration, having not enough success to replace what is being mined. In the last bull market, plenty of the majors bought overpriced assets that they now are writing off.
The supply chain is weaker than most realize, and at the same time, the USD is under pressure which is fuelling the strength in gold. Trump wants wars, and trade wars, plus wants to crank up spending with his wall of racism.
Trump's goofball economics and the growth in the debt will keep pressure on the USD. It is a very good time to be a bull on gold, soon silver will join the party, as well as certain base metals, plus certain battery metals.
Gold is giving us the green light, to be getting greedy while others are fearful and pretty much ignoring quality in the juniors.
A Golden Junior Pick
At the PDAC last month, I was pretty busy and didn't get a chance to walk the floor as much as I would like. I did happen to stop by the booth that GT Gold (GTT.V) had at the Core Shack section of the floor.
I was able to take a couple photos that I think will help you understand their exploration potential. I made this a pick because of the high-grade gold they hit with the truth machine, early in the season. It was great to see what the entire season of exploration showed them about their potential.
In the image below, there are some things I want to point out. The image in the top right corner, it shows the geophysics. That very large anomaly is the Saddle North anomaly, the smaller one is the Saddle South.
The next image I want to highlight is the one on the bottom left, which is a satellite image of their project. If you zoom in, if the images were both taken from the same direction, you can see that the anomalies line up on the satellite images, between the mountains.
This is one of the reasons that I think for investors, Google Earth is one of the greatest tools ever for investors in mining. Whenever I look at a project, and I hear the story, I take their work and then find where they are on Google Earth and see if things match up. You should as well.
So the geophysics line up nicely with the structural features on their project. Which is a great start, but without the results from truth machine, then they are just nice pictures.
The image on the top left corner is from drilling, if you look closely down those holes you will see a couple really encouraging things, they have lots of gold in those holes and plenty of spikes in the high-grade.
As they say, a picture tells a story don't it.
These pictures are certainly telling us a good gold exploration story, they have large geophysical anomalies that presents a very good structural story, plus they have hit a lot of gold suggesting a very big gold system.
I'm more bullish on the company than I was before, they have increased the chances of success substantially. Armed with the knowledge from last year's exploration and drilling, they are primed to be worth a lot more when they get back in the field in the coming months.
That’s all for now,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
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.
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Advance Gold (AAX.V)
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Gold focused, with an enviable portfolio of projects from exploration to mining in Ontario, Nevada and Mexico. 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.
Tudor Gold (TUD.V)
Gold exploration with a strong portfolio of projects in heart of the Golden Triangle of BC, founded by Walter Storm of Osisko fame. Visit their website at www.tudor-gold.com to do your homework.
Wolfden Resources (WLF.V)
Base metals focused, with a discovery of high-grade nickel-copper near Snow Lake, Manitoba and recently added an impressive base metals project in the state of Maine. Visit their website at www.wolfdenresources.com to do your homework.