Value Microcaps Junior Miners

[Bobwins]

Had CDE last year. Market was banking on Silvertip to provide some uplift to production, especially since the company was guiding for HUGE production of lead and zinc from Silvertip into Q4, even though they hadn't come close all year. I think the market will keep penalizing CDE. Terrible mgmt effort should not be rewarded.

Now they have to admit their error by closing down the mine due to low prices but also because they couldn't even produce 1/2 their guidance at Silvertip.

Gold and finally silver appear to be headed up some more. Money printing by all the world's central banks is not going to stop until we have a full fledged financial disaster. They know the consequences but are not willing to let their economies go thru the normal ups and downs of the economic cycle. In the end, they will try to blame something else but they have only themselves to blame.

So, based on that rant, you know I'm very bullish on gold and silver, which bodes well for miners. The mining stocks have not runup this time with gold and silver. Market is still in love with general equities because the FED will intervene anytime there's any problems......until liquidity doesn't solve the problem. So there's plenty of room on the upside. I'm sticking with bigger miners because that's what will move first after gold and silver prices surge and most are already profitable from the previous moves in metals prices. Some appear stretched on valuation BUT the leverage should begin to show up in the P&L's soon. If they're producing a million oz of gold and gold goes up $100/oz, that's $100 million bucks that going to show up as increased revs AND net profit minus taxes. Costs shouldn't change much as prices rise so the producing miners should get full benefit from rising prices.

Naturally the longer this goes on, the more mgmt can grant themselves pay raises and bonuses to erode profits but mining has gone thru an ugly bear market for years so I think mgmts will be a little slower this time around in granting themselves too many gifts.

The other bugaboo is greedy miners that think they have to buy smaller miners to bulk themselves up and overpay. Again, because they have been punished by the market for so long, I don't think M&A will heat up as fast this time. Of course CDE bought Silvertip fairly recently so just try to see if mgmt has done a good job of managing thru the lean times and hope they don't get cocky or stupid.

I think the chances of making money in the miners is very good. The FED is going to keep lowering rates and that should be good for the metals.

Good luck, I was out trout fishing Wednesday. The weather was glorious!
Fishing was ok but hoping for more good weather so I can go again.