first majestic silver

The Buzz At PDAC

March 10, 2016

After the price of gold’s best rise of any February on record, I was hoping to see the buzz at PDAC similar to a decade ago in 2006 featuring:  Long line-ups at the registration desk and the escalators, 20-minute waiting times to talk to company representatives at their booths and all the free alcohol and food one can consume at the endless after parties. Who was I kidding? Those days are long gone, probably not to be revisited again but it was nice to reminisce.

On a positive note, there was a different buzz at PDAC this year. Even though the attendance was not comparable to a decade ago, it was brisk and more positive than in recent years. Collectively, the spirit of the attendees was one of hope, hope that the winds of the junior mining market space are at our backs pushing us towards a strong bull market. Even though this hope may have some reality attached to it, I am not sure that we are there just yet. I do feel that gold has based with corrections to occur, and unlike other bull markets, the charts might not respond upwards so parabolic.

I do not feel that this is a ‘false alarm’ as the pre PDAC buzz of the past few years but we need to see sustainability fueled by cash funneling into funding the junior mining companies. Many brokerage houses have gone by the way side as have a lot of brokers who once specialized in this space -- thanks to the corrupt banking sector and banking brokerage houses, bank brokers are generally ‘not allowed’ to recommend junior mining stock to their clients. Therefore, new money has to come from somewhere. I will discuss how and where in coming articles.

As well, silver has not outperformed gold in the 2016 rally. In past rallies this occurred, a telltale sign that we were in a raging bull market. Rather, I believe we are in a modest basing/start of a huge rally that is on the horizon. Patience is still the word of the wise. Patience should be handsomely rewarded.

If you haven’t already, I believe this is a good time to assess junior mining stocks with the goal of investing. I feel the window of opportunity is now to invest (now meaning within the next few months) in these stocks as we are basing and starting into a secular bull market. I will be analyzing a few junior mining stocks in my future write-ups. As Rick Rule stated in his talk at PDAC, “bear markets are the authors of the bull market.” He is correct in his assessment. We have been in a long drawn out bear market and the writing is on the wall that the time to buy is now, not when the bull market is on its rapid ascension racing towards the peak. Rick Rule asked, “you’ve been through the pain, will you be around for the gain?” There have been cries the past 5 years that the market is decreasing, that fortunes have been lost etc. This could be the right time for picking the ripe companies in the junior mining space that has the potential of rewarding you handsomely.

I am looking forward to the next few years at PDAC. I expect the buzz will grow and sound louder as gold surpasses $2,000 US/ounce and the bull market in precious metals will once again be here.


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Kal Kotecha, PhD, is the editor and founder of the Junior Gold Report, a publication about small cap mining stocks that is read and enjoyed by thousands of investors. He was the editor and creator of the Moly/Gold Report, which focused on critical analyses and open journalism of companies profiting from the precious and base metals sector. The scope of his current activities include worldwide onsite analyses and reporting of developing companies. Kal has previously held leadership positions with many junior mining companies. After completing his MBA in Finance in 2007, Kal completed his PhD in Business Administration in January 2016. His thesis was on the Affective Heuristics of the 2008 stock market crash. He also lectures Economics at the University of Waterloo and Niagara College where he was voted Professor of the Year 2013/2014. Contact: [email protected]

Nearly 40 percent of all gold ever mined was recovered from South African rocks.
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