With the rise in gold shares since the first of the year, good stories are harder to come by. Bob Moriarty of 321 Gold profiles BonTerra Resources, which he believes has home-run potential.
The ideal gold deposit today for a junior mining lottery ticket would be over 2 million ounces of medium- to high-grade gold located in a safe jurisdiction, preferably in a developed mining camp. The junior spends money exploring and developing the resource and sells it to a major or mid-tier for big bucks. It’s the pot of gold that all the juniors claim to be aiming for but few actually hit.
With the rise in gold shares since early this year, the slam-dunk stories are getting fewer and fewer as the rising tide lifts all boats. But there are still a few good stories around if you are willing to search. I’ve found one, BonTerra Resources Inc. (BTR:TSX.V, BONXF: US, 9BR:FSE), that appears to have two home-run potential projects.
Timing is everything when buying the penny dreadfuls. From late 2011 until late 2015 the value of junior gold shares plummeted as some stocks dropped as much as 99%. A very few stocks advanced and great drill results presented little more than a liquidity event to long suffering investors so they could dump shares. But from January of this year, you could have poured funds into some of the biggest crap stocks in Vancouver and seen hundreds of percent gains.
Likewise with the mining companies’ management, there is a time to buy when you can do no wrong. BonTerra Resources got as high as $7.70/share in a post-rollback price in 2011 before blowing sky high, dropping to a low of $0.09 in late 2013. The share price went sideways for two years as new management was brought in to …read more