by Travis Johnson, Stock Gumshoe | February 2, 2017 3:55 pm
This is premium content. To view this article (and to have full access to the rest of our articles), sign up. Already a member? Log in.
Source URL: https://www.stockgumshoe.com/2017/02/small-arbitrage-transaction-in-some-mining-stocks/
Copyright ©2024 Stock Gumshoe unless otherwise noted.
A well presented case! Thanks! I need some more gold exposure because these biotechs are crushing me!
what to buy?
what’s the Red Gold Doug Casey is now promoting?
Casey’s Red Gold promo mentions a geographic location south of Nova Gold property in Canada: “Second, this area of Canada is home to some of the richest mines in the world. I already told you about several companies that struck gold in this region… including Delaware Resources and Stikine Resources, which saw their shares rise 2,700% and 6,600%.
Farther to the north, there’s also Novagold’s massive Galore Creek gold project, with 9 billion pounds of copper, 8 million ounces of gold, and 136 million ounces of silver in mine reserves. This discovery helped Novagold shares rise 10,888%.
And who is ” Dr Q ” ?
Haven’t seen that promo yet so I am only guessing but it could be the RED Mtn. project in the Golden Triangle of B.C. on which I have a column almost ready to submit to Gumshoe.
Will your column be in reference to IDM Mining Ltd $RVRCF ?
Have you taken a position on it yet? Thank you in advance!
What am I missing here? These two firms are not making money. Is this all about betting on the come?
Yes. Junior miners are almost never profitable, and rarely even have revenue (though this combined firm will have a little bit of revenue thanks to their mill in Ecuador), it’s all about whether they can turn their discoveries or acquisitions into something more valuable that they can either develop into a mine or sell to someone who will. Definitely not easy or predictable investments, they’re driven by exploration success (or failure), management’s ability to promote themselves and raise money, and, usually most importantly, the price of the underlying commodity (copper and gold mostly, in this case).
Sounds like you are not familiar with the junior mining space where most of your money is made on new discoveries and then as resources are developed, on buyouts by larger companies with the capital to actually finance the mine construction, that is just how the game is played. Junior miners can not be evaluated like a company producing and selling a product, it is a completely different mindset requiring speculative skills rather than expertise at dissecting a balance sheet.
Thanks for this article.
Just picked up “few” shares myself.
SA article about Luna http://seekingalpha.com/article/4042436-sandstorm-gold-luna-gold-merger-jdl-gold-corporation-create-soon-trek-mining?app=1&auth_param=22jf7:1c994s5:b4a8be024d63007900e3c2813e5fe405 Travis this is a good deal for SAND also do you agree? Long SAND
Certainly better than it was previously looking for Luna on its own, so that’s positive for SAND — though not necessarily a huge impact in the near future. They have a 3% royalty on Aurizona in addition to whatever equity they hold, and I believe Sandstorm does still have some Luna convertible debt exposure that I’m not sure is going to be cleared in the transaction, that part isn’t all that clear yet.
Sandstorm owns 17% of Luna Gold and will own approximately 19% of Trek mining. Long SAND as a way of diversified exposure to Trek and other up and coming mining companies.
Same here. I already own Sandstorm so I don’t feel compelled to gamble on these small miners. Long $SAND
Was looking at Luna Gold last few days because it popped up on my ALERTS as in play, and I understand WHY Travis decided to take a small flyer on it given the connections with people and stocks he is familiar with, I frequently do the same when I have confidence in a Mgmt. team and know the resource has merit. I also hold Sandstorm so I am going to let that be my exposure to Luna for now to see how things develop. I am going to play the contrarian here after comparing LUNA to my extensive buy list of stocks I have already researched. Instead of spending the $2. a share Luna would cost me, I bought 450 shares of VICTORIA Gold VIT-V @ .63 which has has a fully permitted project in a safer jurisdiction in a prolific northern gold belt in a district that has recently had other buyouts by majors like Goldcorp and Kinross. Whether they build the mine themselves or get taken out by a bigger company, I am confident this will be a big winner for 2017=18.
Hi Travis,
Thank you for the heads up. I like this one. Hope it works out. ALSO!
Do you have any comments/suggestions on potential players in the fast growing space involving Blockchain and Crypto Currency. Companies in the space, developers, support systems, vendors, trading companies etc. I know you have some interest in Bitcoin but this area seems ripe for potential growth now that Blockchain technology is catching on.
Your feedback would be greatly appreciated.
Have a great weekend!
Looks like Luna is (or has been) merging(ed), but the stock is 20% down for me, not up. Any suggestions about whether I should sell?
Yes, the deal has gone through. I haven’t sold my TREK shares, I like the mine and the financing and the possible upside from David Lowell’s other prospects … but it certainly could flop. I don’t keep a tight stop loss on small and speculative positions like this, but some people swear by them — I’ll let it wander for quite a while as long as they make some progress toward getting the mine restarted.
And, of course, if gold falls 20% TREK may well fall 80%… the cursed side of the junior miner’s leverage.