So why was last week in particular so frustrating for many investors in the junior Resources space?? To sum it up in one word, we would say it was probably down to "expectations”.
As investors and speculators, by the very nature of what we do, we all have expectations. Generally they represent the eventual outcomes we "expect" from our investments. For the pragmatic investor these will usually be longer term outcomes; in a sector prone to operational delays, how often are we cautioned about the virtue of patience? However, in the short term we are constantly looking out for external signs; acknowledgment of the shrewdness of our investment decisions and a signal from the Market that it concurs with our point of view, by rewarding us with share price improvements.
And that’s where the problem lies. If our starting point for the week is an optimistic expectation of continued progress, should those expectations not be met, it sets us up a cycle of frustration and disappointment. How we handle this will depend on our own psychology.
On reflection, many of us will feel justified in our expectations of continuous share price improvements. After all, the Markets came out of the traps in January with a reinvigorated sense of purpose and optimism, and with the consensus that so many stocks were significantly undervalued, why wouldn’t the road back to sensible valuations continue as a logical straightforward progression?
Well the fact is it clearly doesn't and we also have no idea why not...other than to state the rather banal maxim that Markets rarely perform as we expect them to do.
What we do know however is that as far as the exploration sector is concerned, nothing has happened to change our view on the fundamentals.
We are as convinced as ever that, particularly with our chosen stocks, the value is there and as yet not reflected in share prices. So all we can do is continue to look out for the signs and wait patiently for the market to get itself into gear, whilst adding to our positions here and there as funds permit.
In the meantime, for those who insist on focusing on near term signals, you should recognise that in any rise there will always come a point where the bulls stop pushing and the price runs out of upside momentum, and then stalls out. The key point to watch for next, is how far the price then pulls back and at what point the bulls re-enter and start pushing prices up again.
What we are witnessing now is a pattern where prices are gaining strength then, as they approach key resistance points they struggle to maintain their upside momentum, and the hoped for breakout simply fizzles away. That in itself may be cause for disappointment and frustration, as we take the proverbial two steps forward and one step back. But this process should also offer us perspective as it reminds us of the very reason why we need to be patient with our investments. And patience is important because although prices may be struggling to break through key resistance, what are not seeing, in general terms, are any signs of the Markets breaking down. And that is extremely important, for obvious reasons!
So we can and should take a great degree of confidence from the fact that whenever we get pull backs, we continue to see buyers coming in on the dips. And it is also worth remembering that those buyers, who relieved the sellers of their shares, will be looking for an upside return and as such represent stronger hands going forward.
Last week was frustrating and rather painful, probably best not to prognosticate about the week ahead, but as they say “ No Pain – No Gain!”.
Best Regards
- THOR Mining - Q&A with Chairman Mick Billing
- ECR MInerals - Q&A with MD Patrick Harford
- Alchemy Resources - Value Creation in 2012
- Red Rock Resources - Podcast Interview with Andrew Bell
- Mines and Money - Podcast Interview with Events Director Pablo Martin
- Conroy Gold - Management Q&A
- New "Mines Camera Action!" Company Interviews
Thor Mining - The Road to Value
On 30th January Thor Mining (AIM, ASX: THR, THRO) released the news of an overall 25% tonnage increase to 4.7 million tonnes in a new resource estimate for their Molyhil tungsten and molybdenum project. On the back of this Hardman & Co released an encouraging update affirming their confidence in the progress the company is making.
We took this opportunity to put some investor focused questions to Executive Chairman Mick Billing:
To see the full Q&A session, click here:
To http://bit.ly/Al46mL
ECR Minerals Solid Progress
On 7th February the Company announced to market a set of highly positive gold metallurgical results from samples from their Sierra de las Minas gold project area in La Rioja Province, Argentina.
With confidence demonstrably growing in the viability of the project and plans to mine and process high grade ore, we took the opportunity to put some investor focused questions to Managing Director Patrick Harford.
To see the full Q&A session, click here:
To http://bit.ly/xZ1DQM
Alchemy Resources - Value Creation in 2012
Abraham Lincoln once said “don’t worry when you are not recognised, but strive to be worthy of recognition”. If the Australian explorer, Alchemy Resources, had a motto, this could very well be it.
Judging by its share price, this is not a company currently well loved by the market. But looking at the facts of the business it is very hard, in principle, to understand why this is. As with all exploration stocks, technical analysis of share price performance is not always a reliable metric for evaluating the underlying fundamental strength of the business and it is only through thorough research that the true value of a stock may be unearthed. We’ve recently completed our own analysis of Alchemy Resources and we can now present our Value Proposition on the business.
Make no mistake Alchemy Resources is a well-funded business with some rather exciting exploration licenses in Western Australia. It has a new management team, demonstrating a clear sense of purpose and our view is that 2012 could shape up to be a period of significant value creation within the business. The company seems to be making strong progress on its three projects and the signs are there that positive news could start flowing.
To see the full Value Proposition click here
http://bit.ly/xLuRex
Red Rock Resources - Identifying the Value!
Recognising the current share price predicament facing Red Rock Resources (LON:RRR) investors, we wanted to talk with Andrew Bell, Chairman, and cover precisely what, in his view, investors should be looking for in the coming weeks and months ahead - and indeed for the rest of 2012. As investors ourselves we were keen to hear what specific elements of business strategy could, if delivered, help restore investor confidence and rebuild the market capitalisation of the business?
We trust you will find this interview will offer a good understanding of what Red Rock Resources are trying to achieve for investors in 2012 and we hope you enjoy listening
Listen to full podcast interview here:
http://bit.ly/Ar5Mqo
Mines and Money recognises the importance of Private Investors! 
Mines and Money London 2011 was the exhibition organiser's most successful event in Europe to date, with 210 exhibitors and nearly 3,800 delegates attending. Their Hong Kong show is coming up in March, so we took the opportunity to speak to Events Director Pablo Martin to get his take on the overall prospects for sector going forward and particularly, his views on the growing level of participation from the Private Investor community.
Through MiningMaven, Pablo also extends an invitation to Private Investors to attend Mines and Money events free of charge. To apply for tickets for the forthcoming Mines and Money Hong Kong show, Private Investors should send an email request, quoting reference "BH650MAVEN", to Charlie Hastings
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
.
For all their other events, including Mines and Money London in December 2012 (it will come around faster than you think!), make sure your subscription to MiningMaven is up to date and we will provide you with full details on how to apply for your free tickets nearer the time.
You can listen to the full interview here:
http://bit.ly/wGW649
Conroy Gold: Q&A with Management
A company with a million ounce gold JORC resource, with a drilling programme demonstrating resource continuity and mining studies demonstrating the viability of building a gold mine at their Clontibret project in Ireland, you would expect a very decent market capitalisation. Of course there are plenty of cynics out there who could focus on the past and the number of years Conroy have been building their knowledge of their gold prospects.
But we would rather look to the future because with a conceptual study indicating the potential for 15-20 million ounces over a 30 mile gold trend, there is much to capture the imagination.
Ireland of course has its economic challenges so the prospect of a new large mining operation employing hundreds directly and increasing the affluence of thousands can’t be a bad thing. Professor Conroy as Chairman has built a mine in Ireland before, and his professional and friendly style is appreciated by many, not least by those living in the local area.
You can read the complete Q&A session here
http://bit.ly/yfP3mC
MiningMaven Common Sense Stock Picks for 2012
We started the year with a review of all the companies we follow at MiningMaven with a specific focus where we believe the value will out. We then compiled them into a comprehensive two-part feature which readers can review here:
Part I here
http://bit.ly/zcq2J2
Part II here
http://bit.ly/zcj0SG
Mines Camera Action!
Dont forget to go to our Media Gallery to see the latest video inetrviews in our Mines...Camera...Action! series, including interviews with Red Rock Resources, Regency Mines, Vatakoula Mines, African Eagle Resources and Northern Petroleum.
Best Regards
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About MiningMaven
There is no doubt that the resource sector is where the action is right now, though much of the coverage out there can be too technical for the average person to understand. Our objective is to empower the private investor and encourage more people to take an interest in the sector, so we will ensure that our content is straight talking, accessible to all and as jargon free as possible. We are building a network of investors who are, like us, on the lookout for value propositions and prefer a no nonsense approach to investing in the natural resource sector.
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