A Typical Day For me When I Have dry Powder

For most of the last 6 years I found the junior mining sector somewhat hard in the sense of difficulty of finding “no brainers”. Well today with gold at over $1,800/oz and silver around $24/oz my problem is that there are TOO MANY no brainers to chose from. I literally have never had a harder time deciding what company to add in because I am up to 30-40 names or more that scream “What are you waiting for, can’t you see I am so ridiculously cheap that you pretty much are guaranteed to make at least 100% within 12-24 months?”. What tends to happen is that I am planning on adding in the first company that simply springs to mind on any given day… Then as I am out there with stink bids I of course end up thinking about other companies I could add in as well… What follows is an impossibly hard question to answer: “Just how am I supposed to decide what to buy if everything looks like a no brainer buy?”…

This is pretty much how my thought process cycles through a bunch of cases and I just end up buying whatever I happen to focus on at any given time since “that” no brainer happens to be fresh in mind…

“Eskay Eskay Eskay… Can I even buy more Eskay Mining? But at the same time they have a pipeline that could last years if not decades and they already have some 10 targets identified starting with TV/Jeff which could be a company maker itself… Could be bigger than Ben Hur in a few years. Hmmm…”

“Ahh Eloro, such a no brainer. Probably going to be a monster Maiden Resource and Iska Iska still has room to grow 3-4 times beyond that and it has tin which is putting in new ATHs… Looks like a very probable multi bagger… Hmm…”

“Or maybe more New Found Gold since it has retraced a good bit and if there is one gold project in the world that is going to be a mine it will be multiple Epizonal deposits in possibly the best jurisdiction around… 14 or so rigs going will bring a lot of bonanza headlines to boot… This one is going to be worth a lot… Hmmm”

“Ah, my sweet ole Novo… This looks dirt cheap in light of my expectations for New Found Gold. I would not be surprised to see the current MCAP totally covered by Novo’s stake in NFG coupled with the other private and public holdings… Then I would get every single project, all conglomerates, Malmsbury, Egina and the possibility of sorters unlocking these pesky, nuggety deposits for free…  Pretty much a no brainer R/R after this relentless downtrend… Could be the buy of the ages if I am a bit lucky and some of these gold fields can turn out gold some day… Hmm…”

“On the other hand there is Cabral which is drilling all over the place and I would guess is soon sitting on 3 Moz of hardrock and oxide blanket deposits with enough targets left to be drilling for decades… Hmmm…”

“Then again there is Nevada Gold Corp where the Atlanta deposit probably will more than cover the current Enterprise Value and I get a shot at the huge Iron Point target pretty much risk free, valuation wise. If that’s not enough I get the third or fourth largest land package across multiple projects in the Battle Mountain trend in the heart of Nevada for free as well… Hmm…”

“Oh and of course there is Timberline who are already starting with over 500,000 oz at Eureka and has three major trends to explore along strike and at depth…. Oswego could be a real winner given the ridiculous channel samples and the company is selling for C$29 M… Hmmm…”

“How could I forget Lion One… Controls an entire Alkaline Gold System with 10 Moz potential, is incredibly cashed up and has a permitted mine. They seem to even be close to a development decision. And its helmed by Wally who has a history of billion dollar sales. Meanwhile they are pumping out HG to bonanza grade results… No brainer cheap!”

“Hold up. Goliath! With their hit rate and the scale of the Surebet zone coupled with a newly discovered Extension zone this one could be massive after just one additional round of drilling. Surely this is one of the best high risk/high reward drill plays out there based on ROI potential per drill hole!… Hmmm”

“But wait, what about Magna Mining. An advanced nickel junior with permits in the Sudbury region no less. Management got huge skin in the game and have done a similar thing in the past which ended with a big merger… No brainer in this nickel and ESG environment… Hmmm”

“Oh and Mantaro Precious Metals… An Enterprise Value so low one would think they barely have a single project. Meanwhile they got 5 silver projects in Peru and a district scale gold project in Bolivia which is already permitted for mining, they are into the mineralization already underground and is helmed by an ex Ivanhoe veteran… Hmmm”

“Or what about Headwater Gold and Inflection Resources… Both are explorers that are doing it by the numbers and plan to test countless targets as cheaply as possible. Both are selling for peanuts and one is hunting porphyry elephants in elephant country down in Australia while the other is drilling a bunch of projects in the US and might be on to a discovery already… Hmmm”

“Or maybe some more District Metals who have added two additional projects in Sweden and got one of the most impressive technical as well as management teams around. Garret is an all start and the geo side is done by the Bergslagen rock whisperer Rodney Allen. Surely they will find something on the order of at least 20% of a Garpenberg mine… And its dirt cheap… Hmmm.”

“Wait, maybe I should pick up some StrikePoint Gold now that it has sold off hard. I mean Willabough could very well grow and Porter is yet to really be tested. Two kicks at two semi-derisked cans in BC no less… Hmmm…”

“But then again there is Galantas Gold which are friggin planning on going mining soon. A high-grade underground mine in Ireland with a lot of exploration potential to boot. Impressive people involved as well… Hmmm…”

“Maybe I should actually put some more money in the more de-risked plays with resources such as Dolly Varden, Mayfair Gold, White Gold, Magna gold,  White Rock Minerals or Golden Tag. All have growth potential plus obvious beta. Maybe it’s the way to go given how cheap banked success currently is…. Hmmm…”

“Oh how could I forget Rokmaster. Multi million ounce gold/silver-rich, polymetallic deposit that could grow many times over and is in BC no less.”

“Then there is Grande Portage which has one of the highest quality deposits around… And Pacific Ridge might be on to a real monster with a lot more projects in the pipeline while copper is hot…”

“Hmm should I buy some more high risk/high reward ultra growth stories like Labrador Gold or FireFox Gold? Labrador has just ramped up to a whopping five drill rigs and 50,000 m of drilling. Meanwhile FireFox is onto what looks to be quite a large high-grade discovery and they have an immense land position in one of the hottest places on earth. Surely their land package alone is worth more than the current MCAP…. Hmmm.”

… I could go on with another 10-20 companies at least. Probably more than that actually. I think I could go up to 50-100 juniors and still kick the crap out of GDXJ over a 12-24 month period. That’s how cheap the juniors are and that’s how high the Expected Returns are for many juniors in my book. Anyway, this is pretty much how I think currently. And I do think that for a case to be a “no brainer” one should be able to summarize the case in just a few sentences. The Risk/Reward should be that obvious.

Note: This is not investing or trading advice. Always do your own due diligence and make up your own mind. Miners are risky and volatile. Never invest what you cannot afford to lose.

Best regards,

The Hedgeless Horseman