This has been the year for gold, silver, and mining stocks to come alive. Although gold and silver are still trending sideways in a consolidation phase that began at the end of July, some of the top small cap mining stocks are simply surging. Yesterday for instance Aftermath Silver, which I own went up 16.28% to close right on $1.00 on the TSXV, but other miners are going up and looking good too. We are in what I believe is a sweet spot in the sector that will last another 12-24 months in which valuations are still cheap.
In past bull markets in mining stocks the typical small cap junior mining stock gets to a market cap of at least $25 million USD even if they do not have well developed properties and now there are still gems to be found with market caps of less than $10 million USD. One such stock that I own is Emgold Mining which trades as EGMCF on the US OTC and as EMR on the TSXV. Take a look at the chart.
Emgold Mining stock crashed in March with everything else and then bounced back. It is now consolidating in a range with support at 9 cents and resistance around 12 1/2 cents. Despite the rally since April the stock still only has a market cap of less than roughly $9.5 million USD. The spring crash in the markets has created the opportunity we are in now where there are still stocks at low valuations despite the fact that gold is trading around $2000 an ounce.
Emgold Mining’s business strategy is that of a gold resource exploration company. It searches for mining properties to purchase or buy the rights to and add value to those assets through exploration to prove up or expand a deposit, and look for opportunities to monetize these assets through sale, joint venture, option, or other business transactions. The Company is focused on Nevada and Quebec.
In Nevada, Emgold’s Golden Arrow Property is the core asset of the Company. It is an advanced stage gold and silver property with a well-defined measured and indicated resource. A 2018 Technical Report with M&I resource totaling 12.2 million tons at 0.024 opt Au and 0.33 opt Ag containing 296,500 oz Au and 4.0 million ounces Ag has been filed with sedar.com
Last year the company started to come alive by completing the following deals:
- Option to acquire 100% interest in the New York Canyon Property, NV.
- Options to acquire 100% interest in the Mindora Property, NV.
- Acquisition of a 100% interest in the Casa South Property, QC.
- Options to acquire up to a 55% interest in the East-West Property, QC.
New York Canyon is a base metal property subject to an Earn-in with Option to Joint Venture Agreement with Kennecott Exploration, a subsidiary of Rio Tinto Plc. In Quebec, the Casa South Property, is an early stage gold property adjacent to Hecla Mining Corporation’s operating Casa Berardi Mine. The East-West Property is a gold property adjacent to and on strike with Wesdome Gold Mine Ltd.’s Kiena Complex and O3 Mining Corporation’s Marban Property. Note though that the location of Emgold’s properties adjacent to producing or past producing mines does not guarantee exploration success at Emgold’s properties or that mineral resources or reserves will be delineated. These are only the key Emgold Mining properties.
Emgold Mining is of course not the only small cap exploration resource stock in Quebec or Canada. This screen shot from the company’s corporate presentation shows you what is in Nevada for comparison sake.
Most of the gold exploration companies in Nevada have market caps two to three times as large as that of Emgold Mining. Although this screen shot is from August 6, 2020, Emgold is still super cheap not having moved much since then. In terms of market cap Emgold Mining remains near the very bottom of this list of stock making it one of the cheapest value propositions in my view in this space and therefore making it my top stock pick for this month.
David Skarica of www.addictedtoprofits.net also interviewed the CEO of Emgold.
I will have more updates on the stock going forward.
You can find the entire corporate presentation for Emgold Mining by clicking here.
-Mike
Disclosure: Mike Swanson owns shares of Emgold Mining. Because it is a small cap stock with a market cap of less than $100 million he has put himself on a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post. Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Emgold Mining. This third party paid Timingwallstreet Inc., $12,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising online campaigns for 30 days beginning September 1, 2020. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.
