I have not written a substack for several weeks. Traditionally, the junior exploration and mining markets crater between June 15 and the August Long Weekend. They did again this year. I have very little to say about a seasonal phenomenon except that, for the brave, there are exceptional buying opportunities assuming that you have any money left.
The fact is that, for the most part, none of the company stories have changed much. They are simply on sale.
The price of gold dipped below $1700 USD in mid-July, the price of silver did a double dip below $18.50 in late July. To no one’s very great surprise, gold and silver explorers lost huge value. 30-50% in many cases.
Which is part of the game if you are investing in junior resource stocks. These are gambles plain and simple. The hope is that of ten names in your basket, five or six will break about even, one will go 10x and the rest you are likely to lose your investment almost entirely. However, what keeps investors coming back is that, once in a while, rather than going 10x, from a dime to a dollar, juniors have been known to go 50x.
50x is a bases loaded homerun and while it can happen, it’s rare. Trying to consistently hit singles and doubles wins more games. At the moment, so many of the juniors are trading for pennies that we are spoiled for choice.
However, there is one thing to bear in mind looking at a junior which was $0.30 and is now $0.10 - is there money in the treasury? When the junior market is down raising money is both difficult and dilutive.
I did an article over at Motherlodetv.net on Tocvan Ventures (TOC.CNX). Tocvan is exploring two properties in Mexico. Its CEO, Brodie Sutherland is a geologist but he also has a keen appreciation of what investors need a company to do. Tocvan’s current program should see results, hard news, released every two to three weeks from now until Christmas. Most importantly, Tocvan has secured financing which will keep the program going for a minimum of two years without having to raise more money.
I presently do not own Tocvan shares. However, as the shares are trading at $0.70, 50% of their 2021 high, that may change. Good properties, an exploration plan for each which makes geological and marketing sense, lean spending and funding for two years add up to a very attractive package.
[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.
I currently do not hold shares in TOC.CNX.]