The Mining Mongrel: Junior Mining

London market has seen a continuation of last week’s crazy junior miners, with selective micro-cap explorers seeing stock prices flying under what looks to be no particular fundamental developments. Alien Metal up 204%, Bezant Resources up 170%, Panthera Resources 67%, and Oriole Resource is up around 55%, though they however have completed a placing £1.6m placing to start drilling in Cameroon (worth researching this transformed company). All these companies have two things in common, firstly they are precious metals focused, with Alien metals (a multi-project, commodity diverse portfolio company) being one of the few silver explores on the LON market, and secondly there small market caps.

Over the past month, the junior mining stocks space has been rather subdued, with exciting drilling campaigns being conducted, but not attracting the attention that in a Bull market, would be expected to have received. Thor mining was one of the exceptions, the share price has seen a squeeze since September, rising 50% from having picked up early stage ground in the Patterson, and as many on twitter are quick to point out is in proximity to exciting ground held by Greatland gold (sadly not the Havieron Project).

My interpretation is that though we have seen a fantastic rally this year in the mining sector, many investors who have made money in the fantastic stories of Greatland gold, Eurasian mining and SolGold are once again out hunting for the next big thing. Having taken profit, trimming positions and spreading the gospel of Junior exploration investments, we are seeing herds of investors poor into these early stage, micro-cap companies.

Looking forward, I would be very hesitant to take a chaise the crowd in re-rated juniors but would be looking at companies with fundamental value adding actives.

Looking forwards we are already seeing stirrings in other unloved junior exploration stocks, in particular Ironridge Resources who are conducting a 50,000m RC and AC drilling campaign, and on Monday broke through the 16p resistance that has been holding back the company since its stage 2 drilling campaign. Cobra Resources in South Australia have the drill bit turning, looking to test strong soil geochemical anomalies with coincident geophysical features, building on their current 200koz resource.

(It should be noted that I do hold positions in some of these companies, and or have financial relationships with them….. bla bla bla usual disclaimer…. Please don’t sue me for trying to educate and give my option)

For more information on the company’s covered in this monthly review, broker notes or analysts of other opportunities, please feel free to contact Charlie at Charlie.Stephenson@SICapital.co.uk.

Posted in The Mining Mongrel

Charlie Stephenson View posts by Charlie Stephenson

Mining Specialist ECM Analyst Charlie is an exploration and mining geologist, with a wealth of knowledge having started his career in 2013 as an exploration geologist in Turkey, he has since worked in Europe, East Africa, Australia and Chile. In November 2019, Charlie joined the team as an ECM Analyst producing research notes and developing the SI Capital Research and Marketing Package. Follow more of Charlie's thoughts on Twitter: @GeologyCharlie