Winds Of Change
When I started the Allan Barry Reports in 2005, they were an email only newsletter, that I sent to family, friends and business associates. Maybe a 150 poor souls had to put up with my writing, luckily, I made a few good picks along the way as well. Around a year after starting the reports, I was invited on BNN for the first of several appearances which helped grow my audience and reach in the mining industry and the investing community. It has been a very fun adventure, bumps along the way and all. I haven’t been doing a lot of reporting on my website, or in email newsletters for two reasons. One is that since I started running public companies a couple years ago it has been taking up most of my time. The other reason is that the market was pretty brutal for explorers and the smaller developers and producers with not a lot of action in the mining stocks. Sure the odd stock came along that would pop, but it was a pretty small group. Lately, I have been finding trading opportunities for the first time in a long time. Some juniors are hitting and starting to gain serious traction. Earlier this year, I cleared up part of my workload when I went from being CEO of two companies to only running Advance Gold Corp (AAX.V). It is much easier for me to focus on running one company and we have made some significant progress drilling our Tabasquena project near Ojocaliente, Mexico. Of late, I’ve been thinking of what I want to do with the Allan Barry Reports, Advance Gold keeps me the most busy, and I’m also doing some trading. Of course, I also like discussing what I’m doing with Advance and reporting on the sector and certain stocks. I think I have a gameplan that will enable me to combine things in a way that makes it all work. I’m going to start with, returning to the email format, I will post the contents of the reports in various places online to gain viewers, and will also encourage readers to share them. People interested in subscribing can still do it through the website. Sometimes, I might put out a longer report discussing trends I’m seeing in the industry, or stock alerts when I see something that gets my attention. I want to be upfront and clear, the main thing on my mind these days is what Advance Gold is doing, so I will often weave it into the reports where I see fit. By writing reports it can help all those that have followed my work for many years, and also help me gain investor awareness for Advance Gold. At the end of this year, all of my sponsorships will have expired and I won’t be inviting any to renew, nor will I be bringing on any new ones. I will cease to have Allan Barry Reports as a going concern. I will continue to keep the website alive with all my content available so those wanting to see all of the past content will still be able to easily find it. Not totally sure what I plan to do with the website longer term, for now, I like the idea of it being a place where folks can find my past reports and also sign up for the email newsletter. Now that I’ve got that update on the Allan Barry Reports out of the way, I’d like to discuss some of the trends I’m seeing in the juniors and middle tier mining stocks that I follow. Winds of Change I’m pretty happy to see the market for mining stocks improving and some exploration that is delivering serious results. This has caused a group of juniors to come to life in a big way, the mining sector needs more discoveries with the potential to become future mines. The supply chains of gold, silver, copper and other metals are in shambles and will be that way for a couple decades at least. While everybody in the world needs metals and are consuming more and more every year. It was pretty challenging for mining stocks for the past couple years with a lot of folks chasing after the cryptocurrency and blockchain stocks. It sucked a lot of money away from the junior mining sector, until it reached mania proportion and has since rolled over. During the time that the Crypto Craze was happening, Weed-a-Mania started running wild. Practically everything that had crypto or weed in their names or in their “business” plans was going crazy. I mean like Dotcom era crazy valuations prior to the Dotbomb hit the market. Crypto stocks have come back to earth, and the signs of the top of the weed mania are everywhere. One of the key signals to look for is when a group of stocks that are hot are having money thrown at them and landing bought deal financings. I’ve seen it in every hot market in mining, we saw it in the past when uranium was the craze, and when gold, silver and other metals have been in aggressively bullish markets. We saw it in the crypto and blockchain space, and we are now seeing it in the weed deals. Investors often say that the market doesn’t ring a bell at the bottom or tops of markets, I contend it does, in fact very loud and clear. The problem is few listen to it. The bought-deal-alarm is ringing loudly at the mania top of weed stocks. Ignore it if you are in them if you want, just don’t say the alarm bells weren’t ringing. The opportunity bell is also ringing for the juniors and other mining stocks that have been looked at with scorn as a group for too long The only movement was down for a long time, to the point that we are at valuations so cheap that I’ve only seen them like this a few times during my 25 years in the business. When valuations are this dirt cheap, the opportunity bell should be going off in investor’s heads. Instead they look at stocks and their projects and say well if it is so good, how come the stocks are so cheap. If you hear that coming from yourself, or from other investors, it should be like when the bell rings in a boxing match. It is time to come out swinging buying the cheap stocks. The current market for juniors is a serious buyers market, but what sets it apart and suggests to me that things are getting better fast, is when some juniors are delivering serious results, their stocks start trading with improved liquidity and tradeable swings in prices. This creates opportunities that with good timing and a sharp eye for quality one can get significant returns rapidly. Personally, I won’t trade the juniors, unless it is a tradeable market, and lately I have seen some really good opportunities rise up. A Couple Stocks to Trade One of the stocks that I recently bought for a trade is Sokoman Iron Corp (SIC.V), not to worry, I’m not suddenly into iron ore stocks. What happened is while they were trying to be an iron ore company, they hit high-grade gold with their drilling and the truth machine turned them into a gold stock. The stock was flatlining at around 6 lousy pennies, then in July they announced their discovery and the stock literally went vertical and hit a high of 58 cents in a matter of a few weeks. In a bull market for juniors, it would have retained a lot of the gains. Due to investors in juniors being so timid, it gave back a lot of its gains. I saw the news, the thickness, and grades of their results and was impressed, the stock blasted off and I thought, oh well missed another bus and I will wait for the next one. But the deer in the headlights investors in juniors these days decided they couldn’t wait a couple months for the drilling to get cranked up again. It gave back a big chunk of its gains and got smacked down to around 15 cents a couple weeks ago. At that point I took a flier on the stock as a trade with a 16 cent average cost basis, because I knew that in a couple weeks they would be drilling. Now they are drilling, they have a big budget and are drilling to follow up on their previously announced high-grade gold discovery. The stock is up a penny or two since I bought it and I see several opportunities for it to perform well. With the budget they have and a couple rigs working they will have a strong news flow, I will be looking for pops in the stock to sell into to bring my cost down to zero and then let the rest ride. Another stock I currently hold for a trade is one that shocked a lot of people when I turned from a bear, to bullish and bought some stock. Garibaldi Resources (GGI.V) is a company some of you that have been following my reports for a few years will remember that I did some consulting for the company and they were a website sponsor. At the time I was bullish on their projects in Mexico. They had some projects up in the Sheslay Valley of northern BC that I saw as expensive to explore and I liked the Mexico stuff better. After their sponsorship was up, they decided not to continue, and afterward they came across the E&L base metal project in the Golden Triangle of BC. They got some sniffs of the potential for high-grade nickel and copper on the project and it started building some attention. Next thing you know the promotional machine is in motion and it was being talked about as the second coming of Voisey’s Bay. Eric Sprott bought a bunch of stock early which added fuel to the fire because he kept on buying like they had found another Voisey’s Bay type massive sulphide discovery. I looked at the drill results and they had patchy results of high-grade kind of spread out over a pretty good area. It didn’t make any sense to me, looked to patchy and hard to get it to hang together into a deposit they could mine. But the market doesn’t have to make sense to me to go ballistic and it did. A year and a half ago, it was just another flatlining junior trading at around 15 cents. The early results and the breathless promotion of the stock before the end of 2017 got it up to over 5 bucks. I did not make any friends being bearish on it on the way up and then after it topped and kept on getting hammered down for all of this year until it has recently reached the low since the 5 buck highs. That was until recently when I became the proverbial vocal bear turns bull indicator. What I finally saw in the recent results told me that now they have much more than patchy high-grade, that it can hang together. The zone they have recently announced, has a significant resource of high-grade and is at the top of Nickel Mountain. They have a couple drill pads down the mountain, one is where there was an historical adit, which is also at the contact of two rock packages that can be seen from Google Earth. The second drill pad is further down the hill and right in the middle of one of the rock packages. One of the big bears on the stock is Brent Cook, he was up in the Golden Triangle and flew by the GGI ground and took a picture of the drill pad down the hill. He posted it on Twitter and made a comment about seeing dead donkeys or something like that. The bulls on the stock did not like that, but that drill pad signalled to me that they are starting to look deeper. So I’m referring to it, along with others, as the Donkey Drill pad. All joking aside, I think that Donkey Drill pad could be a big turning point for the company. What it tells me is they are looking for deeper magma chambers full of massive sulphides. This would give them another discovery like Diamond Fields Resources found in Voisey’s Bay and made a lot of shareholders a ton of money. I like to break things down to as simple as possible and I look at this project for three big targets. The first is the extension or farthest reaches, which is the stuff at the top of the mountain. It is very exciting, they have a lense up there with high-grade and some size, there will likely be more of those and they are drilling for them. What is less obvious are the two other kinds of targets, massive sulphide deposits are deep rooted magmatic events. They have deep roots, that the magma finds fractures on the way to the surface and can pool up into a big magma chamber. In addition to chasing after the stuff near the top of the mountain, they can also look for feeders and magma chambers. The two drill pads down the hill, suggest to me that they are looking at the contact of the two rock packages for feeder type targets and at the Donkey Drill pad for magma chambers. Plus they have the drill pads at the top looking for extensional deposits. So the drilling changed my mind, and when they released the news the stock got hammered and has been getting pounded ever since. I bought recently at $1.64, it is a trade that I also hope to get my cost down to zero on spikes by taking profits. They also have a big budget and are drilling currently, and will have strong news flow. Advance Gold Drilling in Elephant Country Those are a couple stocks that I have in my trading account, and in my long account I have only one stock, Advance Gold (AAX.V). I’m the CEO of the company and the second largest shareholder on a fully diluted basis. One of my best friends is the largest shareholders and a director of the company. This is my baby so to speak. We have been able to keep the stock very tight since I took over as the CEO nearly two years ago. Since then we added two projects in Mexico, one is the Tabasquena silver mine, an historical mine operated by Penoles, the other is the Venaditas project. We completed a phase 1 drilling program a few months ago at the Tabasquena project. We drilled the known epithermal vein that was historically mined, but went deeper to get below the oxide zone. This one hole into the top of the precious metals horizon was our high-grade gold discovery hole. Also in the phase 1 drilling, three new veins were found, one had a combination of a surface outcrop and an historical IP anomaly, the other two had small veins at surface. These three veins only tested in the oxide zone during phase 1 drilling. The zonation in epithermal veins in the region are well understood because there has been world-class silver mines found and mined for over 500 years in the state of Zacatecas, mining epithermal veins. We somewhat confirmed this in our phase 1 drilling, with the oxide zone going down approximately 175 metres to around 1950 metres above sea level. At that point we are still not in the precious metals horizon, but the deeper hole under the old mine workings reached around 1900 metres above sea level. Which is the modeled top of the precious metals horizon and hit the high-grade gold discovery. We started our phase 2 drilling program a few weeks ago, with a key goal of trying to get underneath the oxide zone, to at least a 125 metres inside the precious metals horizon. For all the veins we have found to date. I’m expecting a good news flow in the near term that will lead us forward with the cluster of epithermal veins that we have found in a prolific region for mining these veins. Another point I stress when telling folks about Advance Gold is that I’m trying to build it to avoid all the pitfalls that I’ve seen over the years. For one, we don’t have a lot of stock out, around 20 million on a fully diluted basis, with insiders owning approximately 35%, also on a fully diluted basis. Often I see juniors that are in the early stages of exploration with over 100 million shares and higher. Usually, the insiders don’t own a lot of them either. By keeping the fully diluted number down, we have a better chance for exceptional performance with drilling success than the more diluted junior explorers. We have a strong share structure, a new high-grade gold discovery, a cluster of epithermal veins, in a prolific region and are drilling. We can drill year round, and it is low cost exploration. All of this combined, in my opinion, makes us worth consideration when we only have a valuation of a couple million dollars. In Closing I’ve been feeling for the past couple years that an explosive move to the upside in gold, silver and other metals was overdue. As always, my key reasons are not based on the price fluctuations in the paper markets on a daily basis. Over time, commodities are all about supply and demand, with gold, silver, copper and other metals, the supply chains are very weak due to a few decades of underspending on exploration and new mine development. Now they are a coiled springs, just waiting to be let loose. I want to be ready for that, but instead of in the past working for companies or following them in my reports, I’m building Advance Gold to be prepared to take advantage of the stronger market. Along the way, I also like reporting on the industry and trading stocks a little. Earlier I spoke about some stocks I own for trades and why I own them. I’m happy to see the winds of change with companies delivering with the drilling and stocks moving on volume. Feels to me like we are on the cusp of some exciting times ahead for precious metals, exploration and development. Especially in the stocks with serious projects and cheap valuations. All the best, Allan Barry Laboucan Founder/Writer/Host Allan Barry Reports President/CEO 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.