Re: Juniors becoming more attractive J.S.
in response to
by
posted on
Apr 04, 2008 03:22AM
Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Traders are becoming used to selling and buying gold majors juniors and silver along with the rises and peaks of gold, ie the whole thing in tandem, which was easy when it was all about the USD. We may be moving into a timeframe when the easy pickings are over, and that might require dropping assumptions of what moves together and why.
What will increase the share price of gold majors when the price of gold falls/plateaus which it will at some point. Either a buy out which requires cash/loans or delivers investor dilution, or increased discoveries/assets from drilling or production. That would put investing in majors on a par with blue chip companies elsewhere...except their reserves will be diminishing rather than increasing at a faster rate. Juniors on the other hand are growing companies with shares that match both the position they are in, problems they are struggling with at any given time, as well as their compliant or not drilled reserve estimates.
They say that investment banks have been underquoting the expected rise in commodity prices to support major acquisitions, so thats where the investment industry has been focussed. are Canadian juniors suffering from deliberate mining major share price interference (short) , or from fundamental issues, like people not wanting to take a chance on the high price of gold, (given the 1980 spike) or confusion when analysts talk about the price of gold and silver rising and falling together - with no indication of whats happening with the miners. Or increasing costs/exchange rate issues
Another topic I noticed yesterday but having dificulty unearthing info on as that a mining bill from the 1880/90's is being put forward for review and update this year. That would largely effect miners operating in the US although may have an impact on those operating over the border , assuming the Canadians went the same way.
Not all aspects may go through, of course. Seems to include health and safety, planning and royalties, at least those are the topics I found odd comments on.