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Since March of last year, when all hell broke loose and the markets were at its lowest point, we were talking up precious metals stocks (see Playing Ball With Resources).
Now things have not only turned a complete 180, but are continuing to push with “rock” solid momentum.
As mentioned in our last edition (see The Tip of the Iceberg), even our most recently featured silver junior climbed over 90% in just a few short months after our coverage. It still trades significantly higher than where it was when we issued our report back in November of 2009.
With the major boom in the commodities and precious metals sector, it’s becoming more difficult to find great juniors that haven’t already made a huge jump in share value – especially in the junior silver market.
But there is good news…and bad news.
Good news is, we fully expect the silver market to run higher – much higher – over the coming months and years.
Bad news is, the silver junior market just isn’t very big.
In such a small crowded market, it has become much more difficult to find unique stories that investors don’t already know. Everyone is looking for that silver junior with great assets with blue sky potential and true near-term production capabilities.
And we’re not using the term “near-term” lightly.
We’re talking within the next 6-12 months.
The share price of many silver juniors that fit those criteria have been pushed up dramatically by investors through bidding wars in the open market. With such a crowded scene and share prices at near 52-week highs, is there still room for growth? What’s the upside and downside risk?
The fact is, great companies in the silver market are hard to find.
So how do we find our next featured company?
Our key was to find a company that is not only under the radar, but also in its earliest stages. With very few silver juniors out there, this was not an easy task.
But we found one. Next week, you’re going to find out just why the retail market hasn’t caught wind of this one.
This company somehow managed to get a deal on a property in an area that many in the silver market have been fighting over. Not only that, they were able to pick up 80% of this past-producing high-grade silver property for just over $200,000, very few shares, and some work obligations.
To paint a bigger picture, $12 million has recently been spent defining the resource for today’s 43-101 standards and bringing the mine back to life. It sits directly in between two mines that have produced close to 500 million ounces of silver and has historical (non 43-101 compliant) reserves – not just resources (see Taking the Next Step).
It is fully permitted and in one of the world’s most politically sound regions.
How this company got such a deal, we have no idea. But we do know the significance of this project for those in the surrounding area – as you will soon find out next week.
For all of those who think this is just another property play, think again.
This company also made close to $16 million last year – and was profitable!
How many junior companies can say that before production?
When you combine their revenue, their property, their potential for a significant increase in resources, and an anticipated production date starting in Q1 of 2011, you can see why we are looking at this company.
Wait till you hear what their current market cap is.
As we have said before, the best times for juniors is either before discoveries or before production begins…
Until next week,
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