Value Microcaps Junior Miners

[Lone Clone]

KRR, EDV, WM

Australina gold/nickel miner Karora Resources aka KRR announced its Q3 financial results. We already knew production was down slightly from Q2 to 39548 oz Au due to less ore mined and processed, and now we know costs were also down slightly to $1062/oz Au, and that they would have been even lower if they had sold the nickel they mined during the quarter. (It is still in inventory awaiting a future sale.)

In spite of adding to their mining fleet and completing a new ventilation raise, both to allow them to increase production significantly next year, they managed to add $13M to their cash stash, leaving it at $84M at quarter's end, so they are well-funded to deliver that increase in production. In addition, I am starting to wonder if that cash balance might lead to a transaction either as acquirer or target.

https://www.siliconinvestor.com/readmsg.aspx?msgid=34475166

In response to last week's Q3 results release by Endeavour Mining aka EDV, BMO issued a new analyst report detailing a number of positives, esp. the earnings beat and growth pipeline, as well as likely meeting 2023 guidance, but kept EDV at Outperform with a target of $38.

Having already declared a large resource at its flagship Fenelon gold project in Quebec, this year Wallbridge Mining aka WM has been focused on regional exploration on other targets in the area. Their latest PR details the results of initial exploration at Grasset Gold, located about 15km east of Fenelon. They are pretty excited about what they have found so far, increasing the drill programme from 5km to 10.5k halfway through the very first hole. based on what they had seen in the core.

So far they have been able to establish gold mineralization over about 1km strike length, with intercepts like 3.20 g/t Au over 2.50m within a wider interval of 1.22 g/t Au over 8.50 m, and 4.36 g/t Au over 0.95m at a depth of just over 100m. Further assays are pending and drilling is ongoing.

https://www.siliconinvestor.com/readmsg.aspx?msgid=34477316

In this weekend's newsletter, Saville took on something that is being discussed a lot of late, the naked shorting that is supposed to be suppressing speculative gold stocks traded in Canada. He compares the performance over the last five years of the SPXV Composite Index (largely made up of gold juniors) with that of the Australian Emerging Gold Producers Index and the Australian Junior Gold Explorers Index over the same time period. Even though rules against naked shorting are rigidly enforced in Australia but not so much in Canada, the performances of the three indices are virtually identical.

He opines that rather, the poor performance of gold juniors in both Australia and Canada over the last five years is caused the lack of speculative interest by the general public in what are generally illiquid sticks.Hence, he suggests sticking to the larger producers, the type that hedge funds keep liquid, until gold and the gold mining stocks break out to new ATHs, likely in the first half of next year.

I do find his line of argument re naked shorting persuasive, but I am going to ignore his advice and continue accumulating shares in smaller producers and developers while I wait for those breakouts.