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A U G U S T / S E P T E M B E R 2 0 1 4 www.resourceworld.com 5 e d i t o r ' s c o m m e n t s E l l s w o r t h D i c k s o n Ellsworth Dickson, Editor-in-Chief email: editor@resourceworld.com t: 604 484 3800 | 1 877 484 3800 Well, are you making any money yet in the junior resource sector? The Dow and the TSX have been hitting new highs for a while now; however, some market analysts are thinking mainstream stocks are over- valued, looking toppy, and may be due for a correction. Meanwhile, in Canada's junior mining sector, except for a brief rise in January and February, they have been languish- ing, that is, until June when some of the more advanced quality junior miners enjoyed significant increases in their share prices. As I write this in late July, The TSX Venture Exchange, home to the majority of junior miners, has dipped slightly but is still holding above 1000. For some months now we have been pointing out the fact that there are a num- ber of undervalued mining stocks that have been overlooked by investors. This is now changing as can be seen by the rise of GDXJ, a junior gold miner ETF. Check out its stock chart. One of the reasons for increasing share values of selective junior gold miners has been the significant rise in the price of gold and, to some extent, silver. Historically speaking, quality gold stocks often are a harbinger of higher gold bullion prices. If and when gold pokes through the psycho- logical resistance levels of US $1,350/oz and US $1,400/oz, we could see even more buy- ing of the physical metal that is already very strong in Asia. This, in turn, would lead to higher share prices for gold producers. This would hold true for silver too. There has also been a change in investor sentiment partly fuelled by the firming up of base metal prices. For example, the sup- ply side of zinc has been decreasing. I did a search of recent big gainers and was surprised as to just how many junior miners have done well starting in early June. Here is a partial list. Abitibi Royalties Inc. [RZZ-TSXV] Athabasca Minerals Inc. [ABM-TSXV] Avino Silver & Gold Mines Ltd. [ASM- TSXV, NYSE MKT; GV6-FSE, BSE] B2Gold Corp. [BTO-TSX; BTG-NYSE MKT] Bear Creek Mining Corp. [BCM-TSXV; Lima] Chesapeake Gold Corp. [CKG-TSXV] Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] Falco Resources Inc. [FPC-TSXV] First Majestic Silver Corp. [FR-TSX; AG-NYSE; FMV-FSE] Geologix Explorations Inc. [GIX-TSX; GIXEF-OTCQX; GF6-FSE] Golden Minerals Company [AUM-TSX; AUMN-NYSE MKT] Lumina Copper Corp. [LCC-TSXV] Nevada Copper Corp. [NCU-TSX] Pilot Gold Inc. [PLG-TSX; PLGTF-OTC] Premier Gold Mines Ltd. [PG-TSX] Pretium Resources Inc. [PVG-TSX, NYSE] Primero Mining Corp. [P-TSX; PPP- NYSE; PPM-ASX] Silver Standard Resources Inc. [SSO- TSX; SSRI-NASDAQ] Silver Wheaton Corp. [SLW-TSX, NYSE] The stock market performance of junior miners has been a long time in coming. As we all know, investing in junior miners is inherently risky because they are seeking a mineral discovery or trying to enlarge an existing one. As such, they can't be ana- lyzed like other industrials, unless they happen to be in production and gener- ate income. That's why it is so important to investigate these companies to lower your risk by looking for those companies with good projects, good management and funds to carry on. The companies listed above make the grade and savvy investors have recognized their upside potential. There are more opportunities out there, so stay sharp. n Selective recovery underway in mining stocks