Junior Stock Review Weekly – October 7th, 2024

Perfecting your craft as an investor, especially in the junior resource sector, is a continual process.

For me, it’s something I’ve been working on full-time for the last 8 years.

One lesson that needs to be learned as quickly as possible is how important the people are to the success of a junior company.

Without good stewardship, a junior company is rudderless and doomed for failure.

Sometimes, the good people are overshadowed by the geology – exceptional drill results.

Investors forget that it was the management that picked the project and planned the exploration program.

Good people know what they’re looking for.

And, once they’ve found it, they systematically work at revealing its value.

But, the story isn’t done there, communication with the market is paramount – turns out the best people are good at that, too.

Currently, the resource market is littered with high quality management teams, with top-tier projects and are selling at a discount to the metal price.

This situation isn’t new to me.

I’ve been here before.

I had the patience and the know how to pick the good companies and, ultimately, changed the course of my life.

 

 

A Bull Market in 2024?

For me, the stretch of time between 2013 to 2016 is unforgettable.

It was the deepest bear market I had ever encountered.

I had sold my house and used ⅔ of the equity to buy a select group of junior mining companies.

Over those 3 years, I saw my portfolio fall by more than 30%.

It was tough, I often wondered if I did the right thing.

Turns out, I did – 2016 was incredible.

The funny thing is, I didn’t even see it coming.

Rick Rule has often told me, and I’m paraphrasing, “investors’ outlook is influenced by the immediate past.”

It’s so very true.

For 3 years, all I knew was a falling market.

Companies would release good news and the share prices would fall – it was a liquidity event.

Worried investors were using the good news to capture volume and sell down their positions.

Sound familiar?

It should.

2022 and 2023 were eerily similar to 2014 and 2015.

Much like that period of time, I think today feels a lot like early 2016.

For those who don’t remember or weren’t in the market at that time, 2016 was the start of a bull market that changed my life.

I had hand picked a select portfolio of what I thought were the best of the best junior mining companies.

That portfolio returned roughly 300% over that next year.

With that windfall of profits, I left my career in steel manufacturing to pursue investing full time.

It’s now been 8 years since I made the leap toward my own personal freedom and I could never go back.

When I look at the market today, my experience tells me we’re in for another one of those life-changing years in 2024.

Precious metals prices continue to trend upward while the junior mining companies are lagging behind.

This is where the opportunity is.

Just like in 2014 and 2015…if you can pick the right companies.

Speaking of picking the right companies, I will share with you the biggest win of my investing career so far.

It’s AbraSilver (ABRA:TSXV).

I first identified AbraSilver back in 2019.

It was selling for C$0.025/share.

The market hated it, completely disinterested.

But I saw something more.

I saw a company with a brand new management team – CEO John Miniotis and VP Exploration David O’Connor.

These men’s pasts were decorated with success and having met John in person, I knew he was the right man to lead ABRA and develop Diablillos into a future mine.

The people part of the equation was filled.

Next, I could see that they had a small but expandable gold and silver oxide resource.

Exploration potential captures market attention almost regardless of the overall market sentiment.

Having it is a huge plus for any junior mining company.

The project, Diablillos, is located in Salta, Argentina.

Rightfully, there are question marks surrounding Argentina and its mining investment attractiveness.

I don’t disagree.

But, when a company has the right people and project, and is selling for less than its worth, to me, it’s an opportunity.

Finally, I was able to recognize where precious metals prices were headed and how AbraSilver’s story would attract market attention.

I then bought shares in the open market and participated in their next 2 financings, which occurred in the heart of the Covid panic.

In just over a year, AbraSilver’s share price hit a high of C$0.82/share and returned the biggest win of my career so far – $0.025 to $0.82 = 32x!

Today, I still own and cover AbraSilver in Junior Stock Review Premium.

They now have 209Moz silver equivalent ounces in their Reserves and I think have the potential to add a lot more.

Not only this, but a major mining company, Kinross (K:TSX), just recently took a 9.9% stake in the company.

Without a doubt, AbraSilver is a top-tier acquisition target by all the senior precious metals mining companies.

Will 2025 be the year they get taken out?

I certainly wouldn’t be surprised if it were.

Precious metals prices look like they should remain strong and I think that bodes well for M&A.

Senior producers are continually depleting their reserves and, therefore, have to replace them.

In my view, AbraSilver will be at the top of the list when it comes to M&A targets.

To follow AbraSilver’s news flow and get my view on where things are headed on a weekly basis, subscribe to Junior Stock Review Premium.

For a limited time, I’m offering 20% OFF Premium by using the coupon code: SAVE20 on both the quarterly and yearly subscriptions.

 

 

Field Notes YouTube Video Series

Last August, I started a YouTube video series titled, Field Notes.

The series is all about my journey as an investor in the junior resource sector.

More specifically, I take you along into the field to the companies’ projects that I’m personally invested in.

Site visits aren’t something that every investor gets to do, yet they are incredibly useful and important in the process of picking good investments.

Seeing the lay of the land, meeting the locals surrounding the project and getting to spend extended 1 on 1 time with management can’t be beat.

Field Notes fills that gap for the investors who can’t make it to the site.

In Episode #1, I share my story and how I used the junior resource sector to gain the personal freedom that I enjoy today with my family.

Check it out and, if you like, please subscribe and support the channel.

 

 

MUST-see Media

 

 

 

 

 

Interested in becoming a Premium subscriber?

For a limited time, I’m offering 20% OFF Premium by using the coupon code: SAVE20 on both the quarterly and yearly subscriptions.

Here are a few of the answers to the most commonly asked questions about the newsletter;

  • Choose from a Quarterly or Yearly Subscription Option
      •  Choose what’s right for you, whether you want to test drive for 3 months or maximize your benefit with a yearly subscription.
  • Weekly Market Updates are sent directly to your inbox with junior resource sector commentary and news on the companies in the Premium Portfolio.
  • Get access to all prior issues of Premium and take full advantage of years of market research and commentary.
  • Portfolio company rankings with buy at or below pricing, plus % allocations of each position.
  • Q&A – I answer all of my subscribers’ questions!
  • The Diligent Speculator Video Series – A Bonus for Yearly subscribers only, learn about geology & deposit types, exploration techniques, mineral processing and metallurgy, balance sheets and much more.

 

Subscribe to Junior Stock Review Premium

 

Still have questions? You can email me personally here: juniorstockreview@gmail.com