Top 10 Mining Picks for 2013 # 1-4
10) Sandstorm Gold) Although Sandstorm has been on a tear lately is isn;t cheap but itsn;t expensive. Sandstorm;s model allow for immediate value creation through acquiring a streaming interest. With the cash coffers loaded to the brim. another deal or two will likely be announced in the next six months.
Why Sandstorm should continue to perform is that it has a significant amount of growth in the new year with Bracemac-Mcleod, Bachelor Lake & Serra Pelada coming on stream.
9) Sandstorm Metals & Energy ~ SND will see its first quarter and year of positive cash flow from operation in 2013 with 3-4 streams coming online.First is its natural gas stream, which it gets to purchase at $1/mcf. Production will begin in Q4 2012 and be at fully production in Q1 2014 as more wells are drilled. Second off is Bracemac-Mcleod, its biggest asset on a cash flow and NAV basis comes onstream in Q1. Sandstorm owns a 17.5% stream on all copper produced for the LOM, which will produce 28m lbs at full capacity. Sandstorm has the right to purchase each Lb. at $80c unless copper drops below $2.75, at which time cost per unit drop to 55c.
Next up in the world class gold and PGM mine, Serra Pelada. Sandstorm has the right to buy 35% (with a 50% buyback provision), at $100/oz. A very small amt of production will be seen in 2013, but some nonetheless. Palladium production will reach capacity in 2015. Lastly, Sandstorm will begin receiving a gross over-riding royalty, which is equal to $5/tonne until 10m have been received , falling off to $2/tonne thereafter.
8) Trevali Mining ~ This Zinc-Lead-Silver company is an up and coming mid-tier primary zinc producer, which is rather uncommon. The great thing about Zinc is several large Zinc mines will become depleted on the next 3 years (Zinc projected to go into a deficit sometime in 2014). It has operations in Canada and Peru, Canada accounting for approximately 65-70%. Furthermore, Trevali will produce 50% Zinc, 20% Lb, 25% Silver and 5% Copper/Gold
7) Alexco Resource ~ Alexco;s share price has been beaten down and battered to death yet the company remains in great financial shape with 30m in cash on hand, no debt and 2 mines coming online in Q1 2013. The first Lucky Queen average grade is around 1,200 g/t and should help fill part of the excess mill capacity. LQ will increase production roughtly 50-60% to between 3m-3.2m oz. in 2013 while at the same time seeing cash fall under $10/oz on a byproduct basis. This is due to Onek, the second mine coming online, Which would be considered to have a good Ag grade by most but not Alexco. Onek's avg Zinc grade exceeds 13%.