This was a really good discussion on the macro picture in the mining sector, regarding the financings (or lack there of) not just in PMs, but in Base Metals and also Battery Metals.

That was an enjoyable recap of the “Merger Monday”, on Hecla/Klondex, Alio/Rye Patch, and Anaconda/Maritime. Personally I was involved in all three since I owned Rye Patch, had just bought into a Klondex a week prior, and have been accumulating Anaconda since last summer.

Next up the Balmoral saga was an interesting study in anticipation,exaggeration, and then speculation with investors being underwhelmed and having too high of expectations for the resource estimate due to market hype. I actually started my first position in Balmoral during the depths of the carnage on Tuesday afternoon, because often times fickel investors overreact.

The Novo phenomenon was the most intriguing story of 2017, lighting up the entire Pilbara region with a unique and potentially significant scientific and geologic discovery. It was really a unique exploration story, tied to an interest scientific theory, which was then spun into an even more intriguing massinve gold find narrative that captured (and still is capturing) the minds of investors. It was really a special event and all the surrounding “Pilbara Sisters” (other companies locating conglomerate gold, shot up in sympathy with Novo. The sector does need a few interesting wins to get others to sit up and take notice.

It is true that the marketplace does seem hungry for a new Exploration narrative and massive discovery. There were about a dozen companies that spiked on exploration stories last year like Novo, Artemis, DeGrey and Kairos in the Pilbara, but there were also stories like Arizona Silver, Garibaldi, GT Gold, Aurion Resources, West High Yield, New Nadina, and Colorado Resources.

They shot up and then they fell back down, and it seems more like a phenomenon where MoMo investors are chasing wildly from one story stock into the next, piling in and then running for the exit doors. This rocket shot and drop frenzy trading also burnt a LOT of newer retail investors and overzealous speculators where they went in too large on just one story and then lost a huge chunk all in one sitting. That isn’t good for building much longer term excitement or momentum, but is a valuable lesson for investors to marinate on concerning position sizing and not putting everything into just 1 or 2 companies.

In addition, as mentioned by Kai & Cory that is more like a few standouts from resource investing specialist just moving money around from stock to stock, but it isn’t the same as institutional investors and the mainstream generalist retail investors flooding into the space which will bring in the high tide.

Lastly there seems to be only a faint interest in the Major producers, Mid-Tiers, and Jr Producers. The ironic point is that they’ve really made big strides to reduce costs, reduce waste, reduce redundant head counts, cut the fat, improve grade, improve recoveries, and improve mining throughput. These producers are actually much better run companies now, than compared to the sloppiness seen at the top of the market 2010-2012.

Even then, despite all the gloomy sentiment in this sector, there are producers that have bounced out of the Dec lows in 2017 during the end of tax loss selling season, and post FOMC rate hike. There are plenty of miners that had nice initial moves out of the end of last year to present — like Impact Silver, Superior Gold, Teranga Gold, Santacruz Silver, Maya Gold, Resolute Gold, Hunt Mining, etc…

Ever Upward.