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As I walked the exhibit hall at last week’s Toronto Resource Investment Conference, I was pleasantly surprised by the good news coming out of the small- and micro-cap explorers and miners at the show.
Sure, you always expect explorers to put on their smiley faces. But I kept hearing phrases like “we’re able to raise production forecasts,” “we discovered a whole new zone,” “financing isn’t a problem” and more.
Less than a year ago, many of these small explorers and miners seemed as quiet as mice as the markets collapsed and financing for one project after another fell apart.
Now, those former “mice” are roaring, as gold prices zig-zag higher and the financial industry finds its taste for funding projects again.
Here are some examples — companies I looked at in Toronto that caught my eye. You may find any of them worth a closer look …
- San Gold Corp. (SGR on the TSX-V): I’ve recommended this stock before and may have to consider it again. San Gold has a project in Manitoba called Rice Lake that is coming up aces. There are two mines at the project and the company has new discoveries as well.
- Hawthorne Gold (HGC on the TSX-V): The company has a fully permitted mill and high-grade gold deposit in northern British Columbia called the Cassiar Gold Mine. It should be in production by the end of this year or first quarter of 2010.
Once this project gets going, Hawthorne should have the cash flow to develop its two other potentially very large deposits, one nearby and one in southern British Columbia. Hawthorne is also drilling furiously to potentially expand its existing resources.
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| Hawthorne Gold expects to begin production at its Cassiar Gold Mine by the end of the year or early 2010. |
- Atna Resources (ATN on the TSX) started (or I should say, re-started) production at its Briggs Mine in California. Atna expects to produce 40,000 to 50,000 ounces of gold per year at Briggs. And it recently announced a significant gold resource at another project in Montana. We’ll see if Atna can use cash flow from Briggs to develop its other properties.
- Matamec (MAT on the TSX-V) is a junior explorer looking for gold in Ontario and precious metals, base metals, uranium and rare-earth elements in Quebec. Whew! It’s a small company with a busy schedule. It is prospecting for gold on a joint-venture property with Goldcorp as a partner; friends like that can’t hurt.
- Avalon Rare Metals (AVL on the TSX): This is one of the big stories in rare earths — its flagship project, the 100 percent-owned Nechalacho Deposit at Thor Lake in the Northwest Territories could be one of the largest undeveloped rare-earth elements resources in the world. Rare earths are already bubble-icious though, so caution is warranted.
- Hathor Exploration (HAT on the TSX-V): This is an exploration play that is getting plenty of buzz, but it’s in a sector — uranium — that is getting about as much respect nowadays as Rodney Dangerfield. If you’re a contrarian, maybe now’s the time you want to look at uranium stocks.
I found plenty of other interesting stocks, in gold, uranium, diamonds, silver, base metals, and more. I’ll recommend the best of my finds to my Red-Hot Global Small-Caps subscribers when buying opportunities present themselves.
Many of these companies have tracking stocks on the pink sheets in the U.S. As always, do your own due diligence and make sure anything you buy is right for you.
And be careful! For example, the Alberta Securities Commission recently leveled its largest fine ever in an alleged Ponzi scheme that centered around an “environmentally friendly” oil sands recovery stock.
The stocks I’ve just talked about are real companies, some of them trading for pennies per share. But be aware that not every bargain is really a bargain.
When Contrarians Agree, Are They Contrarians?
Away from the exhibit hall, there were plenty of lectures, presentations and speakers. I like listening to views on gold, China, energy and more.
Peter Grandich, who served as emcee for a Sunday morning panel I was on, declared that he had never seen better fundamentals supporting the price of gold.
And U.S. Global Investors strategist Jack Dzierwa sounded pretty bullish. He hammered on the fact that sovereign wealth funds are using their large dollar holdings to buy gold, both physical bullion and ETFs. He didn’t offer his own price target, but quoted some strategists as calling for gold to soar to $3,000 an ounce over the next few years.
On the other hand, Kitco senior analyst John Nadler gave his reasons why gold’s fundamentals are not good and getting worse. I have yet to see Mr. Nadler bullish on gold, but he’s a smart guy, and I like hearing just how bearish he can be at these events.
For my own view, I considered myself a contrarian when I said that I expected the price of gold to slide lower into early October (Yes, we’re in early October, but I said this a week ago.) or maybe mid-October before rallying again. But every other person on that panel also called themselves a contrarian and also said they expected at least a short-term sell-off in gold.
When all contrarians agree, are we really contrarians? I walked away from that panel determined to re-examine my thinking.
Certainly, it’s a fast and furious market. Tomorrow’s events can wipe out yesterday’s plans and forecasts. Still, I’ve been able to play the big swings, and you can, too.
I think gold’s profit train is building up steam, and it’s about to leave the station. Don’t let it pass you by.
Yours for trading profits,
Sean
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