This is when ten-baggers are bought; but you had better know the value behind targeted deposits because there isn’t much dumb money left to buy mistakes.Thus, at this juncture it is critical to review your stock holdings in the light of what could prove to be a very difficult period in the resource sector. There will be a very long line of micro-cap juniors desperately seeking money early next year. I don’t think it will turn out well for most, and suspect that next year’s junior company exploration and wine cellar expenditures are going to be severely curtailed. A further observation is that those companies with just enough cash to survive next year will be doing little more than making property payments while their geologists ( if they have any) sit on their hands. Those with near empty treasuries will cease to exist.
Accordingly, grassroots exploration by the juniors will be virtually dead next year (tough to raise money on concepts and soil anomalies) and aggressive drilling will be seriously curtailed (tough to raise money if you miss). Regions like the Yukon will be empty compared to the previous three years, with much of the ground coming free (expensive to explore and keep up property payments). Worse, the industry’s only real hope for new large discoveries, deep and blind targets, are for the most part not going to be tested by the juniors because of the high cost and even higher risk (“technically encouraging” results are tough to sell) so if your first holes miss you are toast. Discovery takes time, patience, and money; all of which will be in short supply next year.
There will be a lot of " putting lipstick on a pig" in the next few months so ignore the lipstick ( nebulous press releases) and focus on the pig itself. Check the financials with a focus on cash on hand, accounts payable, liabilities including property commitments and most importent their game plan in realizing the potential of their target. And remember their credibility lies in their track record so pay attention to what they have promised in past press releases and what they delivered. IMO nearly 50% of these companies will not exist in a year so due dilegence is now the top priority of every speculator. (difficult to use the word "investor" when talking about this sector. I am anxious to see what colour of lipstick GDW is about to put on.