4/1/2011: Junior Resource Stocks Holding (Part 1)

Some company highlights to start with so you can do your own due diligence. This game is for the patience. Junior resource stocks can scare you out with rapid price declines, and wear you out with extended periods of grinding action, usually to the downside. What you wait and hope for are the hyperbolic upside rushes that reward the patience. Junior explorers are important to senior producers for accessing new reserves. I use loss triggers to sell any individual stock if it loses 25% on any week (this worked out real well during the Japan nuclear crisis selling-off my uranium stocks).

Overall, these companies passed the basic criteria. Many companies can’t even do that e.g. keeping shares from being overly diluted.

Westernzagros Res Ltd (speculative/oil):

  • Drilling began 3/29/2011 at Sarquala-1
  • George Soros believes in the company, with over $800,000 net insider buying on open market in 2010
  • Kurdistan is one of the last remaining mega oil well country

Taseko(copper)

  • Excellent 2010 earning reports
  • $150m cash on hand (3/18/2011), that’s $0.75 per share cash. Thus the possibility exists of the ability to fund the development in close succession of all their properties from cash on hand and future cash flow.
  • New process facility will also focus on the Moly production

Hellix Ventures Inc- (silver)

  • Pure speculation

Silvermex Resources: (silver) ***Adding Positions***

  • Proven management that has driven aggressive growth both organically and through M&A opportunities
  • Over $26m cash-on-hand to fund projects in 2011 and beyond
  • NOT a proven producer but incredible production and exploration potential
  • Silvermex starts 2011 in a very strong financial position with current working capital of over $26 million. This capital will fund the advancement of the Company’s wholly-owned, producing La Guitarra silver-gold mine and the Company’s other projects in 2011 and beyond.
  • 4/1/2011: $SLX has not been in a hurry to keep up with prices the white metal, thus, if we have a winner the hyperbolic upside once the market is 100% confident that the mines will be operational
  • A lot of supporters

PolyMet Mining (copper-nickel-precious metals):

  • Glencore believes in the company
  • Awaiting permits

Largo Resources (vanadium):

  • Low-cash-cost producer: $116 (U.S.) per MTU (metric tonne unit) (current trading price of $365 (U.S.) per MTU) tungsten;
  • Average annual production of 833,000 MTU tungsten and 5,959,000 pounds molybdenum over initial 23 years;
  • Potentially one of the world’s largest tungsten producers;
  • Cumulative cash flow $4.8-billion (U.S.);

Augusta Resources (junior copper producer):

  • 4/1/2011: Permits around the corner. Hudbay, an integrated mining company) owns 14.3%, thus they’re in the know about the permits.
  • More exploration expected once permitting is done as the mineralization is open in all directions.
  • Analysts says Augusta has the potential to have a $4 billion market cap.

Avino Silver and Gold Mines:

  • 30-years of prior mining operations and infrastructure already in place
  • Very good EPS down the road due to low share cap

Canadian Zinz: (silver)

  • Solid financial results for 2010
  • Awaiting permits

For the foreseeable future, any pull-backs in silver will result in me selling-off my non-Silver positions in order to build new silver positions. Diversification is like re-arranging a deck of chairs on the Titanic.

Good luck and happy hunting!!!

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