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According to Canaccord’s August 28 Junior Mining Weekly, “Over the past two weeks, the junior mining sector has finally shown signs of life. Over this period, the price of gold has rallied 3.1%; the price of silver has rallied 9.6%; and the TSX Venture Composite Index has rallied 5.1%. While average daily volumes remain relatively low at 146 million, they are up from less than 120 million at the end of July and continue to trend higher. With a breath of new life in the junior mining sector, we have seen selective outperformance, particularly for those companies with strong balance sheets.” Better still, “The period from September to the end of February is typically a seasonally strong period for junior mining equities.”
And now to cases. On August 28, Canaccord increased the price target of Orezone TSX:ORE from $4 to $4.25 (currently $1.79) and maintained Galane Gold TSXV:GG at $1.50 (currently $0.84); on August 27, it lowered Rio Novo Gold TSX:RN from $0.90 to $0.25 (currently $0.19) and maintained Keegan Resources TSX:KGN at $5 (currently $3.46); and on August 24, it lowered Golden Minerals TSX:AUM from $11.75 to $9 (currently $4.75).
Canaccord reported August 27, “The four most undervalued gold stocks based on potential return to the best-fit line are” Aura Minerals TSX:ORA, Centerra Gold TSX:CG, Keegan Resources TSX:KGN and Golden Star TSX:GSC.
Reuters reported August 30 that CIBC has cut the price target of Banro TSX:BAA from $8 to $7 (currently $4.03) and Société Générale has initiated coverage of Teranga Gold TSX:TGZ with a target of $2.21 (currently $2), August 29 that National Bank Financial has initiated coverage of Luna Gold TSXV:LGC with a target of $3.20 (currently $2.47) and CIBC has lowered Orezone Gold TSX:ORE from $5 to $4 (again, currently $1.79) and August 27 that CIBC has lowered Detour Gold TSX:DGC from $45 to $42 (currently $24.85) and resumed coverage of Yamana Gold TSX:YRI with a target of US$23 (currently C$16.17).
The junior mining sector has finally shown signs of life. Over [the past two weeks], the price of gold has rallied 3.1%, the price of silver has rallied 9.6%, and the TSX Venture Composite Index has rallied 5.1%. —Canaccord
At the Globe and Mail, Darcy Keith reports August 30 that Cosmos Chiu of CIBC World Markets has cut the price target of Banro TSX:BAA from $8 to $7 (again, currently $4.03) and Stephen D Walker of RBC Dominion Securities has raised Agnico-Eagle Mines TSX:AEM from $45 to $53 (currently $45.69), August 29 that Christos Doulis of Stonecap Securities has raised Aurcana TSXV:AUN from $1.20 to $1.50 (currently $1) and August 28 that Brian Christie of Desjardins Securities has lowered Orezone TSX:ORE from $4.75 to $3.75 (once again, currently $1.79).
From the same source, David Milstead reports August 29 that, according to Fraser Phillips of RBC Dominion Securities, Thompson Creek’s TSX:TCM gold-streaming deal with Royal Gold TSX:RGL “should eliminate the need for additional financing for Mount Milligan under our base-case assumptions. However, financing risk remains.” He gives a price target of $3.85 (currently $2.47).
Bloomberg reports August 28 that Eco Oro Minerals TSX:EOM “a gold explorer in which hedge fund Paulson & Co owns 10%…fell 55% to $0.88…the most intraday since July 1992,” after “Colombia granted an extension on less than half the company’s title rights.” (Currently $0.82.)
At Seeking Alpha, Christopher F Davis offers two “speculative stocks for those who believe silver may outperform gold this year”: Great Panther Silver TSX:GPR, explaining, “I believe that long-term GPR could provide great returns should its future exploration activities reveal sizable mineral deposits and if it can keep related exploration costs down. It is a tall order, but I like this stock long-term, as I see silver continuing to rise” and MAG Silver TSX:MAG, explaining, “Even though the company is losing money, the potential returns that this company can deliver shareholders are high. Analysts agree, as the four analysts covering the company have one buy and three outperform ratings on the stock.”
And at the Gold Report, David Morgan, editor of the Morgan Report, likes Silver Wheaton TSX:SLW (“This company really knows what it is doing… Investors are buying silver in the ground pretty cheap with Silver Wheaton”), Pan American Silver TSX:PAA (a “top-tier compan[y]” with “assets all around the world”), SilverCrest Mines TSX:SVL (“undervalued… doubling a mine’s production, even though it’s a small one, is quite a difficult thing to do”), First Majestic Silver TSX:FR (“CEO Keith Neumeyer has done a heck of a job with the company”), Endeavour Silver TSX:EDR (“a great team… [it] has basically done everything it has said it would”), Franco-Nevada TSX:FNV (“run by some of the smartest people in the business, and the company has a ton of cash”), Gold Standard Ventures TSXV:GSV (“It’s right next to one of Newmont’s TSX:NMC mines. It could be a buyout”).
Finally, the revelation that Senator Joyce Fairbairn continued to vote despite being certified non compos mentis creates what Homer Simpson would call a “crisitunity.” Yes, this further undermines confidence in the Senate, but imagine how much our leaders desire MPs guaranteed to do as they are told at all times. In related news, several members of the Prime Minister’s Office were seen this week with copies of Lobotomy For Dummies.
A personal note. This is my final Auguries column, indeed my final feature of any kind for Resource Clips. I hope you’ve found this space diverting and, perhaps, edifying. I leave you with the wisdom of St Thomas à Kempis, as pertinent to investing as it is to everything else in life: Man proposes; God disposes.
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