Resource World Magazine

34 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 2 0 R eaders of Resource World magazine are keenly aware that investing in exploration and mining stocks, par- ticularly junior exploration stocks, is a high risk-high reward endeavour that can some- times generate big capital gains. Yet, despite their volatility and uncertain chances of success, investments can be de-risked to a certain extent by picking companies that are in production or explorers that have signifi- cant resources outlined. Then there are the higher risk juniors with "discovery" potential. Perhaps their property is clearly on trend with a heavily mineralized area or a past or currently pro- ducing mine. In any case, these projects have real geological reasons that a signifi- cant discovery could be made. Other things to look for in a junior – or any company for that matter – is manage- ment that has seen success in the past as well as companies that have a healthy trea- sury and/or the ability to raise funds. Presently, for example, shares of gold and silver producers have done well with last summer's rise in precious metal prices. As of press time, except for a few excep- tions, rising share price increases have generally not trickled down to explorers. It would be great to see more retail inves- tors taking part on a broader scale and not just for a few select juniors. Part of the reason for the lack of retail investors in the junior exploration sec- tor is that banks have bought up various brokerage houses. Banks – being naturally conservative – have been more inclined to suggest blue chip miners to their clients rather than high-risk explorers. Junior explorers have remained out of favour for some time. Hugely successful investors such as Rick Rule says that high quality juniors are "on sale" and now is the time to pick up unloved mining stocks that have real value but their share prices don't show it. (See Rick Rule interview page 8) This out-of-favour junior mining sentiment is mass psychology, or herd mentality, in action and means that com- panies that meet the above criteria can represent real investment opportunities. Currently, the TSX Venture Exchange is trading a little over 100 million shares a day and has done so for the past several years. However, when the junior mining market sentiment changes to favourable, and it will, it is amazing how many inves- tors will pile into junior exploration stocks, resulting in a broad-based lifting of many quality issuers. Below are summaries of companies that have done well in 2019. 10 STOCKS TO WATCH Denison Mines Corp. [DML-TSX; DNN- NYSE American] recently installed Ten exploration and mining stocks to watch by Ellsworth Dickson

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