In 2014, my readers were blessed in seeing two of our junior mining equities soar higher than the entire small cap market. Now in 2015, despite the worst bear market in junior gold mining history, once again we have seen the great out-performance of two of our select junior gold companies. Its easy to pick outperforming junior miners in a bull market; it's much more challenging to find the winners in a historic bear market when the category 5 hurricane winds are blowing against you trying to knock you down. Be careful out there and stick with the stock pickers who can pick winners in a bad market. Take a look at these two junior gold miners on the TSX Venture able to post positive gains despite a record decline in the junior sector.
Observe Integra Gold (TO:ICG) (ICG.V or ICGQF), which I have been highlighting for over a year now as a potential takeout target. Today, Eldorado Gold (NYSE:EGO) invested $14.6 million into Integra for a 15% interest at $.28. This helps Integra in a few major ways. The first most important thing is that is strengthens Integra’s treasury and balance sheet. They will have $27 million in cash. Secondly, Integra will now be in a position to expand drilling and increase the size of the high grade Triangle Zone. Finally, Integra will now have a major $4 billion market cap NYSE gold producer as a shareholder, increasing the credibility and visibility of the project to larger institutional investors possibly in the US.
Eldorado must like the upside potential of this project, which continues to hit high grade intersections. I’m looking forward to the fall and winter for Integra as they are planning a 100k meter drilling campaign with ten drill rigs. This is quite different than other juniors struggling to finance and might be one of the most aggressive exploration programs I can remember in a long time by a junior.
In addition, Eldorado will have one member on the Technical Committee. If they go up to 19% ownership, then they will get a Board seat.
Eldorado has operations all over the world, but may be looking to derisk their assets by diversifying into the Val D’Or District in mining friendly Quebec.
Also notice the relative strength of Red Eagle (TO:RD) (RD.V or RDEMF), of which I have been a long term supporter. They just announced the commencement of construction at the fully permitted and financed San Ramon Gold Mine. Production is expected in the second half of 2016. This management team led by Ian Slater and Bob Bell has done an unbelievable job in an incredibly hard gold market. Key lesson for investors is to investigate management’s capability. Between Ian Slater’s ability to finance the mine and Bob Bell’s mine building experience, Red Eagle is positioned to be the largest producing gold producer in Colombia. The project is high grade with low costs and technical risks. The upside is large as well, as they have a 100 sq. km land package, which is largely unexplored territory.
See a recent interview with Red Eagle (RD.V or RDEMF) CEO Ian Slater below.
Disclosure: I have a conflict of interest as I own Integra and Red Eagle and they are both website sponsors. I personally benefit if the share price moves higher. Please do your own due diligence and consult a financial advisor as junior mining stocks are extremely speculative and volatile.