The Gap Widens – Lawrence Roulston
There are growing signs of a recovery in the junior resource market, even though the sentiment remains generally negative. The Toronto Venture Index, an indicator of junior resource sentiment, is up nearly 15% from the low point of last December. However, that index is only about 8% ahead of the year-ago level.
While the overall market is showing signs of a recovery, the gap between the haves and the have-nots continues to widen: Good quality companies are getting funding and increasing in value while many companies continue to struggle for survival.
As we’ve said a number of times, the junior resource market has split into two distinct markets. Companies with low quality projects and no cash are still finding it extremely difficult to raise funding. With no cash and no news, they continue to wither away.
Those few companies with good projects and good management are finding cash fairly readily. About 20 of the companies that we follow in Resource Opportunities have now raised in excess of $250 million so far this year. Those companies have generated impressive gains in share price. Based on these movements, we will be releasing a fully updated portfolio ranking for our paid subscribers early next week.
There is an enormous amount of money available for resource companies. But, the investors holding that money are extremely selective. They recognize that the resource industry is highly cyclical, and the time to invest is when the industry is generally out of favor. But, they aren’t willing to bet on a vague promise from a geological team that a new discovery will be made next month.
The appropriate strategy at this time is to take a longer term perspective. Look for genuine value and for management teams that can execute sensible business plans to create shareholder value. That means, generally, looking at companies with advanced stage projects which are headed toward production. Earlier stage projects can also be attractive, if a discovery has been made and there is evidence that the deposit can have both size and grade.
Investors who are waiting for a broad market recovery may still have a long wait. Those who take the time to search out good companies stand to make the big gains that accrue to those who invest at the bottom of the market.
I agree with Mr.Roulston completely. There are plenty of opportunities, but be careful.
BTW and FWIW, closer scrutiny of the action leads me to believe that GDXJ probably bottomed yesterday.
I recall with clarity when Gary called the “FINAL BOTTOM IN GOLD” last month.
Still laughing about that. Now you can join Gary in the bottom calling parade. So I strongly encourage you, (on the basis of your assessment), to rush blindfolded into the field and start buying gold and miners hand over fist. How the hell else will we be able to fuel the next decline!
I will put your call on my calendar. We can review it again next year!!! HA HA HA!!!
Matthew…..with these charts and info…you could easily start your own NEWSLETTER, let me know if you start one………..I would be a customer……………..
Now that is funny
Nice ones Matthew. You do well keeping records as you do as to what BM says. With his ha ha ha’s he reminds me of that other merchant of doom – SilverFox who thank God seems slumbering indefinitely!
Best, A
This is getting out of control!
I hear Russia will consider bans on McDonalds, Pepsi snd Taco Bell, if the Big Zero ramps up sanctions further.
Well that’d be a nutritional positive for the nation.
Where is anyone speaking out against the GENOCIDE on this non-Christian, non-Muslim minority sect in Northern Iraq, Perpetrated by the Islamic State, also called ISIS?
40,000 Iraqis stranded on mountain as Isis jihadists threaten death
Tens of thousands of members of one of Iraq’s oldest minorities have been stranded on a mountain in the country’s north-west, facing slaughter at the hands of jihadists surrounding them below if they flee, or death by dehydration if they stay.
UN groups say at least 40,000 members of the Yazidi sect, many of them women and children, have taken refuge in nine locations on Mount Sinjar, a craggy, mile-high ridge identified in local legend as the final resting place of Noah’s ark.
At least 130,000 more people, many from the Yazidi stronghold of Sinjar, have fled to Dohuk, in the Kurdish north, or to Irbil, where regional authorities have been struggling since June to deal with one of the biggest and most rapid refugee movements in decades.
Sinjar itself has been all but emptied of its 300,000 residents since jihadists stormed the city late on Saturday, but an estimated 25,000 people remain. “We are being told to convert or to lose our heads,” said Khuldoon Atyas, who has stayed behind to guard his family’s crops. “There is no one coming to help.”
Another man, who is hiding in the mountains and identified himself as Nafi’ee, said: “Food is low, ammunition is low, and so is water. We have one piece of bread to share between 10 people. We have to walk 2km to get water. There were some air strikes yesterday [against the jihadists], but they have made no difference.”
Thousands of women captured in Northern Iraq cities have been given to Islamic State fighters as sex slaves.
Why is no one speaking out against these barbaric practices?
Where is the UN for these WAR CRIMES?
Quite so CFS.
Is there a company that is not past the exploration stage and has sold a gram of gold yet or are they still sucking money out of people to survive?