May the best of 2012 be the worst of 2013
2012 was both a challenging (to put it mildly) year for junior mining stocks and a great opportunity to pick up high-quality names at bargain prices. I hope you managed to take advantage of some of those sales.
Sandstorm Gold, the first company that I wrote up, was an exception to the rule. Its gold streaming model shone in a terrible financing environment for juniors and shares almost doubled in calendar 2012, including a 20% advance since I featured the Nolan Watson company in my first blog post. Sandstorm Gold also obtained NYSE and TSX listings in 2012. Sister streamer Sandstorm Metals & Energy did even better, advancing 68% since my Sandstorm post (and 43% on the year).Newstrike Capital, featured on Sept. 20, was a different story. Shares were down about 24% in 2012 and 15% since I wrote about Newstrike on World of Mining. But the stock rallied more than 6% on Dec. 31 and major shareholder Lukas Lundin added to his stake late last year, picking up 2 million shares at $1.80 through one of the Lundin family trusts (the topic of my latest post). This year, Newstrike will put out a maiden 43-101 resource estimate on its 100%-owned Ana Paula gold deposit in Mexico’s Guerrero Gold Belt. I view the Lundin purchase as bullish and suspect – knock on wood – that the $1.80 he paid will be the floor for the stock going forward.
Shares of Ross Beaty’s Lumina Copper finished the year at $9.43, virtually the same level as when I wrote up LCC but down considerably from late March, when the stock hit $17. Growth in China may be slowing, but demand from the rest of the developing world is supporting copper prices, which have rebounded to pre-financial crisis levels and stayed there. I expect Lumina and its vast Taca Taca copper deposit in Argentina to be snapped up by a suitor in 2013. Another copper play I featured, Amerigo Resources, has dropped a few pennies and now sports a 7% dividend yield. On Amerigo, a pessimistic Mr. Market seems to be focusing on bad news in the rear-view mirror while ignoring company-specific positive developments that should drive revenue and earnings going forward.
While I have worked for several years at a major daily newspaper, World of Mining is my first foray into the world of web publishing. I am honoured that you have joined the thousands of investors – from Canada to Panama, Chile to China and points in between – who have stopped by or signed up since the August launch of WorldofMining.com.
In 2013, I will continue to offer up investment ideas at World of Mining, as well as roll out some new features. And I suspect this year will bring better times for long-suffering junior resource speculators – particularly those who invest their money in high-quality names.