From the Allan Barry Reports
Brought to you by: Advance Gold (AAX.V) and Sirios Resources (SOI.V)
These past couple weeks have been busy on the news front, it happens every year due to the PDAC conference in Toronto in early March every year. Another thing that seems to happen every year is the PDAC curse that has a way of spooking the superstitious. Creates some pretty cheap buying opportunities as well.
This year we got the PDAC curse a few days early. After months of gold and gold stocks from majors to explorers improving, we saw the stumble from the curse.
In addition to the pre-PDAC cursing of the market, Barrick and Newmont had dueling press releases. First Barrick lobbed a brash discount to market takeover offer. Then Newmont made the point that out of the merged Barrick and Randgold, the one best at making money for their shareholders of the three has been Newmont. By a fairly considerable margin.
Almost as fast as the brawl started it was over. They just signed an agreement to create a joint venture between Barrick and Newmont for their mining projects in Nevada. It sounds like the most sensible way to go, and the big shareholders of both companies, who also own both, likely helped get the sensibilities through to everyone involved.
Newmont kind of delivered a checkmate presentation, laying out the facts, and I think they wanted to send a message. Mark Bristow may have been able to pull off a reverse merger with Barrick for his Randgold. But, that doesn’t mean trying to take out Newmont is going to happen.
In addition to the PDAC curse, and Barrick and Newmont fighting a war of words on Barrick’s takeunder offer, plenty of the retail investors attending the PDAC weren’t too happy either.
This year, the decision makers at the PDAC decided it should charge investors to come to the show, for the first time. I know 25 bucks doesn’t sound like a lot, but, every year it has been free for people to come and get the pitch on mining stocks.
The companies exhibiting at the PDAC pay a pretty penny to have a booth, and the added travel costs, it all gets expensive. The whole goal is to have people come to hear their stories. I did hear that some of the exhibitors liked the smaller crowd that paid to get in as they said they met a lot of serious people at the booths.
I’m kind of glad I didn’t go, I’m really busy these days and I get a lot more done working from my office than attending the PDAC. I got a bunch of reporting done on companies with news, and an interview with one of my top picks Amex Exploration (AMX.V). It was a great chance to dig deeper into their bonanza grade gold discovery in Quebec that just keeps delivering with the drilling.
All the reporting I’ve been doing of late has reminded me of how badly the mining sector, especially in exploration and new mine developers, need more quality coverage. These companies struggle to be found in a sea of blockchain, cryptocurrencies and weed stocks.
In the old days, all the brokerage houses in Vancouver had commentary on the exploration scene. Research and commentary goes to where they make commissions on financings. For a few years now, that has been by far in the weed and crypto related stocks.
When it comes to media, there was always a lot of coverage of mining in Canada. From the major mining companies to the junior exploration companies. The media is no different than the stock brokerage companies, they go to the stocks where viewers are investing.
The final bastion of commentary for mining exploration is the newsletter community, but, the quality is not the greatest or a lot to pick from. They can often be interesting presenters, although not as great at picking stocks. Or reporting on exploration from the early days of discovery.
Look at the recent presentation from market commentators, from the various conferences like the Metals Investor Forum, the PDAC, or Vancouver Resource Investor Conference.
There are lots of them, ask yourself, how many of them have been on top the recent change in direction for gold, and just as importantly have they been on top of the recent breakout in a select group of gold exploration stocks? The answer is no on the gold move and no on the must watch gold explorers.
I know because I watch them. Everything is on video or out in blogs these days, the commentary going into changes in direction for the gold sector and gold stocks are there to see. Despite a few, most are talking about boring deals they own a bunch of stock in. Not on top of the gold markets, at a crucial juncture, like we have been in for the past few months in gold.
The market commentary for the juniors space is so bad, to make matters worse, every investor in the space has their own ability to put out commentary. On websites like CEO.CA, Stockhouse and even Twitter that is gaining a larger community of investors in juniors.
The social media sites have plenty of potential, sadly, instead of having bullish and bearish debate on the merits of the projects and company valuation. It usually turns into gangs bullying out opposing views. When the platforms could be fantastic sources of signal over noise, instead the noise is pretty loud.
It wouldn’t be so bad if the debating skills were decent and backed up with arguments based on exploration and results. Instead it is a bunch of cheerleading a bullish or bearish argument on the stock based on whether the anonymous user is buying or selling.
It has been a good time of reflection about all this as I am getting ready to redesign my website. I visit several sites for commentary on news in mining, and for discussion, sadly, I find them all lacking.
I’ve decided to do something about the needs of more commentary for juniors. I will be building the Allan Barry Reports website to answer those needs. Stay tuned, I think you will like the changes coming.
On to the must watch gold explorers...
This Group Has Gold Hits That Can Take Them Much Higher
Over the past few months, gold exploration stocks that deliver with drilling have come to life. The ones with the most staying power in their stock action are those with high-grade gold discoveries.
I’m glad to have a strong group of stocks that are some of the ones making these discoveries. High-grade gold has been on the top of my mind lately, so I thought I would do a special edition on the high-grade gold picks.
Amex Exploration (AMX.V)
Amex is a perfect example of why you want to closely follow developments to understand what they have found and the work they are doing. I picked them early in the exploration, it had already made a big move up to 55 cents when I picked them. I took the time to review things closely, and thankfully this company is very good at presenting their results, which gave me the confidence that they still had a lot of blue sky ahead. Since then, the stock has nearly reached $1.50 and is currently sitting slightly over a dollar. Since I first picked them, I have gained confidence each time they announce more results. In gold mining, they say grade is King, well continuity is just as important. Whether one looks at the step out holes at depth or along strike, it is showing the potential for serious size to go along with the bonanza grade gold they keep hitting. At its current valuation, considering what they have delivered and how much drilling they will be doing, I see them as still very cheap. They are quickly becoming one of the most important gold explorers to follow.
Sirios Resources (SOI.V)
Member of the Allan Barry Reports Website Sponsorship Program
Sirios is another gold exploration company that has been on my mind a lot lately, one because they recently became a website sponsor, secondly, they also delivered some really good high-grade gold from their Cheechoo project. I’ve been following the project for several years as it is right beside the Eleonore mine, found by Virginia Gold, built by Goldcorp. They have focused a lot of drill holes in an area where they have a large gold zone, they are currently doing a resource estimate for that zone. To the west of it, there is a vein system where the surface outcrop straddles the claim boundary. Sirios drilled on their side of the claim boundary and hit bonanza grade gold that was the highest grades they have drilled to date. Fortunately, it looks like they caught the extension of the vein system and it dips over onto Sirios’ ground. In Sirios you have a junior that has both an advanced gold zone and just recently added bonanza grade gold exploration to the mix.
Galway Metals (GWM.V)
Galway Metals is a new arrival to the list of picks, just added in the past couple weeks. They have a high-grade gold discovery in New Brunswick, Canada. They have a few zones on their ground delivering bonanza grade gold with recent drilling. Their best hole was an eye opener with 807 g/t gold, and there are others with high-grade as well. A few of the holes are a considerable distance apart, which means they could have a large zone to look for the high-grade lenses. The company has a solid share structure, not too much out, around 20% owned by management and directors, $7 million in cash. Current valuation is below $50 million. I like the grades, size potential, and their potential to valuation setup.
Walker River Resources (WRR.V)
Walker River has delivered a nice batch of drill results that have hit a lot of bonanza grade gold. To make what they have found even more significant, the widths of the bonanza gold is over minable widths in several spots. The zone with the gold mineralization is very big and they have only really scratched the surface. It is a classic Nevada gold story. There was historical mining by small scale miners using rudimentary tools and lots of hard work. They weren’t in those mountains digging around for the fun of it. Their work has set the stage nicely for Walker River to come in to expand. The next milestone for the company will be the return to drilling, which they have had nearly $1 million come in through warrants being exercised, so they are cashed up. They are building new drill pads to better target the high-grade gold lenses. I would suspect they will be back to drilling within the next six weeks or so, which is giving investors a nice opportunity to buy on the cheap before the fireworks start when they get back to drilling. I’m a shareholder, with an average purchase price a little over 11 cents, I’ve bought my tickets to the ride.
Sokoman Minerals (SIC.V)
Sokoman is at a crucial juncture, they are drilling from the ice on the lake where they made a big discovery last year of high-grade gold. They also drilled near the lake, but, nothing as flashy as what is under the lake was found. I like their chances to hit as it wasn’t one fluke hole under the lake, they hit it with a few angled holes. It looks like a flat lying gold system, right under the lake. The drilling they are doing now will give them the answers, concerning if they have the potential for size to go with the high-grade gold. The rubber is meeting the road as they are drilling right now. I have a feeling they have something serious, although, it would have given me more confidence if they hit better stuff near the lake. It is also important to note, if that lake is indicative of the size potential of the near surface high-grade gold mineralization, that they can use to follow deeper, it will be game on for a big high-grade gold system.
Great Bear Resources (GBR.V)
I had a quick look at the stock before writing this, Great Bear has a year low of 42 cents and a high of $4.08 and currently just over 3 bucks. It sure has been a wild ride. They have found something special at the their Dixie Lake project, just off the main road into Red Lake, Ontario. This is a fantastic camp for high-grade gold mines with healthy margins. They aren’t easy to find, if you do, it can be a company builder, like we saw with Goldcorp starting as a junior in the late 1990s, then becoming a major low cost gold miner. All because of what they found in Red Lake. Those kind of success stories don’t come along very often and I think Great Bear has a realistic shot. Due to the high-grade and small veins, it is crucial to understand the continuity. They have a 3D model of the gold system and it is clear they have plenty of strike length to the zone. The next milestone will be to use the near surface zone as a guide to target the deeper holes. Based on the distribution of high-grade gold in the shallow drilling, it certainly shows the size and grade potential at depth. The mines in Red Lake are deep and Great Bear’s depth potential remains wide open to find a multi million ounce gold mine.
High-grade gold has been on my mind a lot lately primarily due to the success companies in my reports are having. I spend a lot of time looking for gold discoveries, they aren’t easy to find.
There are currently hundreds of gold exploration companies. I mainly only focus my picks in North America, and as you can see from the few picks I have made, you need to be selective.
This group is a heck of a roster to look through, maybe not a big roster, certainly one that has delivered impressive discoveries. A common denominator is they are close to infrastructure, so they can keep the costs down. They are also all in areas where companies can get premium valuations as they are in mining-friendly jurisdictions.
Most importantly, they all offer strong valuation to potential setups based on their current valuations and the quality of what they have found.
I have new sponsors joining up, this will enable me to revamp my website to become the go to website in junior mining for the best commentary, delivered in digital and video reports. Plus, I have a few more surprises to come as well.
On that note, I encourage folks to check out the past reports on the website, plenty of hidden gems of companies and knowledge in them. Be my guest to share the report to friends that follow mining exploration. Your efforts to promote my work is greatly appreciated.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Advance Gold (AAX.V)
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.