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XMFSinchiruna (26.53)

Sinchi's New Series Highlighting Junior Explorer and Producers

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January 13, 2010 – Comments (18)

Here is the first of what I hope will become a long list of investigations into individual junior miners and explorers ... an up-close inspection of each company one at a time.

Better Know Tomorrow's Outperformers in Gold

The first installment highlights Aurizon Mines, a small but profitable (and debt-free) junior gold producer in Quebec that some of you will undoubtedly already be familiar with.

Let me know what you think of Aurizon Mines, be sure to tell me which juniors you would like to see highlighted in future pieces, and what you think of the idea overall.

As I approach juniors moving forward, are there particular aspects of their outlook or condition that you would like me to pay particular attention to?

Thank you in advance for your feedback.

Disclosure: I own shares of Aurizon Mines.

Sinchi

 

18 Comments – Post Your Own

#1) On January 13, 2010 at 11:01 AM, JakilaTheHun (99.92) wrote:

If you're taking requests, I vote U.S. Gold Corp (UXG).

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#2) On January 13, 2010 at 11:02 AM, dudemonkey (56.08) wrote:

Do you have an overall strategy for investing in junior miners?  I've been turning over some of these rocks, too, but I haven't really come up with a system to address the risks of junior miners.  I can tell what kind of financial shape a company is in, but if they're sitting on top of a pile of rocks with no resources under them then they're not really worth all that much.

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#3) On January 13, 2010 at 11:10 AM, binve (< 20) wrote:

Excellent Sinchi!! I am a big fan of Aurizon myself! Thanks, I am definitely looking forward to the rest of the series!!

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#4) On January 13, 2010 at 11:17 AM, XMFSinchiruna (26.53) wrote:

JakilaTheHun

I'll consider the nomination ... thanks.

dudemonkey

That's a complicated question requiring a complicated answer. I hope you won't mind if I address it gradually as the series develops. :)

One strategy is to spread risk by dividing one's allocation among several junior holdings. The GDXJ ETF could be one effective way to do that, but I have opted to select my own basket in addition to a small holding of the ETF.

In brief, however, I would point to the paragraph in the above article suggesting that the tendancy in a secular bull market will be for the rising tide to carry all boats. Of course, we are looking for what sets a given junior apart from the pack, but provided we see value relative to economically viable resources and a solid financial footing, then the crux might be simply to dig through in search of red flags (non-friendly mining jurisdictions, etc.)

Also, it helps to hone one's understanding of geology. I have an advantage there as a trained archaeologist that I am familiar with much of the technical terminology employed in descriptions of deposits, but much of my familiarity has come more recently just through continued exposure to reports. Learn to understand ore grades, learn to calculate the economic significance of by-products. If you're as serious about the space as I am, start your own spreadsheet to record data so you can develop a strong sense of relative strength on various metrics like grades, resources, IRR, etc.

Fool on!

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#5) On January 13, 2010 at 11:47 AM, kadosas (< 20) wrote:

Great Panther Rescources, please!

Kind regards

 

 

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#6) On January 13, 2010 at 12:23 PM, XMFSinchiruna (26.53) wrote:

kadosas

I'll look forward to doing that one ... As many of you know that is my largest junior holding by far, and it is in the process of breaking out (finally!).

We have some restrictions on discussing companies with tiny market caps, so I may have to wait a little bit on that one. But if this breakout holds, ot won't be long. :)

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#7) On January 13, 2010 at 1:34 PM, workfor (< 20) wrote:

GPRLF & EXK all the way.

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#8) On January 13, 2010 at 1:36 PM, 100ozRound (28.56) wrote:

I own AZK and I'm actually a bit disappointed in it because it's been lagging the miners.  I've been patiently waiting for it to breakout.

 

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#9) On January 13, 2010 at 1:58 PM, workfor (< 20) wrote:

SVM is my biggest gainer. Once the by products (lead and zinc) from the mining process are sold, it's costs are negative $6/oz to produce silver. That's right - negative costs. It will  make money when others are losing money. The samples taken of deposits found during the exploration stage were rich enough by themselves to pay for the exploration stage. Thats virtually un-heard of. This company is leveraged for the future price of silver.

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#10) On January 13, 2010 at 3:35 PM, silverminer (30.05) wrote:

workfor

:) Yup

I share your enthusiasm for all three.

100ozRound

Sometimes a lagging share price can set the stage for a profitable acquisition. I wouldn't be at all surprised to see this one get gobbled up.

P.S.

silverminer = TMFSinchiruna

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#11) On January 13, 2010 at 3:43 PM, lemoneater (57.21) wrote:

I look forward to this series. Will you also mention tungsten and titanium?

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#12) On January 13, 2010 at 3:46 PM, 100ozRound (28.56) wrote:

Thanks for putting it in perspective Sinc!

I second The Hun's nomination of UXG if you please...

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#13) On January 13, 2010 at 3:53 PM, gman444 (28.27) wrote:

Great idea Sinchi--I've always appreciated your contributions, and rank them right at the top of the CAPS list. I'd be interested in hearing your view on two juniors I've been following for quite awhile---SKV.V is in the exploration phase, but all indications are of a mammoth gold find at their Spanish Mountain property (The company will soon change it's name to Spanish Mountain). The other is WEX.V, which owns a moly mine with (by far) the highest grades of moly in the world. The previous owner, GPXM, was in production while still exploring, so the mine is actually producing. Thanks for your views.

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#14) On January 13, 2010 at 4:11 PM, XMFSinchiruna (26.53) wrote:

I will say this about UXG ... that is the cheesiest looking website of any explorer I've seen to date. :)

I've never been one to pay a guru premium for a stock, and I suspect I'll find that UXG's valuation will suggest a guru premium for McEwen's involvement. I have steered clear of even Jim Sinclair's TRE for the same reason. It's often hard to know ehere the real stock ends and the impact of a personna begins. 

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#15) On January 13, 2010 at 6:41 PM, XMFSinchiruna (26.53) wrote:

And on the other end of the mining spectrum, GG continues to dominate the outlook for major miners:

http://www.fool.com/investing/general/2010/01/13/own-the-purest-nugget-of-gold.aspx

 

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#16) On January 13, 2010 at 8:29 PM, XMFSinchiruna (26.53) wrote:

Hey, Fools ... don't forget to rec the articles I link to when you find something you enjoy. Recs and comments on the published articles help to increase their circulation and reach a wider audience by getting them onto the "most popular" or other article feeds from the home page. :)

With appreciation,

Chris

 

 

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#17) On January 18, 2010 at 6:27 PM, jesusfreakinco (28.14) wrote:

Not sure if KBX fits your definition, but would love to see it reviewed.

JFC

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#18) On January 18, 2010 at 6:27 PM, jesusfreakinco (28.14) wrote:

Chris,

BTW - you should be the most rec'd blogger on CAPS.  Thanks for all your analysis into the PM world!

JFC

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