Ed. note: Here is our second installment from longtime reader Myron Martin. As before, let us know what you think in the comments section below the article. Myron has agreed to our trading restrictions (he won’t trade the stocks he mentions for three days), but we have not reviewed, approved or screened his stocks or ideas, and the opinions he expresses are solely his own.
Hello again Gumshoe readers. In my last month’s column I mentioned liking the “prospect generator” model for junior miners. The main reason is that it “spreads risk” very effectively. I had not planned on writing about VMS Ventures (VMS.V and VMSTF on the pink sheets) until this came in today, but I am forwarding this press release for two reasons.
First, VMS is part of a group of companies that have a common sponsorship of a management group. This allows savings in management and financing and increases market awareness and access to promising projects. This development model allows an exploration company to seek out numerous encouraging projects and farm out some projects to joint venture partners who are cash rich, or to senior companies with the technical expertise to actually develop a mine, while reserving one or two projects for the company to focus on directly.
The second reason is in the footnote: VMS Ventures holds 27.5% of the stock of a sister company, North American Nickel (NAN.V and WSCRF on the pink sheets), which I invested in as a speculation, and which has turned into a very exciting project with huge potential. More on NAN later….but don’t skip the press release on the Reed Copper Project and do not confuse it with the REED Ginger Brew recommendation from last month, already up substantially.
There are several things to be noted in this press release:
Near term production, (Q4 2013), meaning a relatively short-term potential for profitability that would enhance the stock’s value in the marketplace. VMS Ventures is being “carried to production” by a strong partner, HudBay Minerals Inc. (HBM in New York and Toronto). This means that HBM, rather than VMS, is obligated to spend any money required to bring the project into production and VMS Ventures has no further financial obligation until HBM finances all expenses to bring the mine into production, after which expenses are shared in the ratio of the joint venture agreement. While I do not presently own either ...