Strategic Metals - How to Invest in a Basket of Junior Mining Stocks

A Basket Of Junior Stocks

If your upbeat on gold juniors these days, then your probably hunting for sold off bargains that might have happened in the last weeks. I mean pretty much any of the juniors who might have been riding high have been knocked off their high horse and are back to 52 week lows or worse. So sifting through the wreckage can be not only time consuming but with this virus issue going on, a lot of potential work and exploration programs are subject to change. Not only that but who knows about future funding??

 In my last article I wrote about the reason why owning physical metal was so important and this article I'll try to explain why diversification of stocks is also important. The thing with junior mining stocks is that you can make a fortune on good drill cores or you can be slaughtered to bits if the assays are not good. In fact it seems these days that even good drill results will prompt a sell off just for the sake of short term profit taking. So putting your money into just one or two plays, no matter how positive you feel about them, can be a deadly game chance with your money. 

So one of the ways to play the market is of course with ETF's where a fund buys shares in certain companies or you can buy into specific gold royalty companies much like Wheaton Precious Metals. While Wheaton buys mostly into active mines and loans money to active miners there is a smaller company that has a fund that buys shares into the smaller juniors that have some promising prospects. Strategic Metals Ltd SMD is a company that does just that. Most of the company's holdings are Yukon based which is a good thing because the Yukon is one of the more pro-mining areas in Canada. The company obtains shares through agreements, private placements and open markets. The company also acquires shares through an investment fund it controls and in other cases becomes a joint venture partner and also options properties.

The company likes to classifiy itself as a project generator and currently has interests in more than 120 properties assembled by an accomplished exploration team utilizing a proprietary database. Through project farm-outs, investments, and royalty sales, the Company has built a strong treasury and sizeable shareholdings in other exploration companies. Major shareholdings include:

  • 6.4% interest in ATAC Resources Ltd., which is developing Canada's only Carlin-type gold district at its Rackla Gold Project in east-central Yukon;
  • 36.3% interest in Rockhaven Resources Ltd., which is advancing one of the highest grade gold deposits ever discovered in Yukon towards production;
  • 24.3% interest in Precipitate Gold Corp., which is advancing the Pueblo Grande project located immediately adjacent to Barrick's Pueblo Viejo Mine in the Dominican Republic;
  • 17.7% interest in Silver Range Resources Ltd., a project generator focused on high grade precious metals in Nunavut, N.W.T. and Nevada that also owns 4 highly prospective zinc-lead - silver projects in Yukon; and,
  • 43.2% interest in GGL Resources Corp., a diamond explorer with significant land and royalty interests in the Lac de Gras region of NWT, and an option to earn 60% in the Stein Project located in Nunavut.
  • 83.5% interest in Terra CO2 Technologies, patent pending for a non-CO2 generating cement process suitable for construction and tailings remediation.

Aside from invested interest in various junior companies, Strategic also has royalty stakes in other junior companies. These are in the form of net smelter percentages. There are two large scale projects in Dominican Republic and they recently acquired Pueblo Grande, adjacent to Barrick's Pueblo Viejo. In the Yukon, Bonanza-grade discoveries at it's 100% owned Mt. Hinton project will see follow up work and exploration this year.

The company has 108,000 share fully diluted. Management owns about 10% of the stock as does Sprott Asset. Condire Resource Partners hold about 13%. With the stock sitting on 52 week lows this might be a potential investment to those who can't make up their minds on which junior to invest in.

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