Here we are at the end of August and the gold space dodged the go away in May and come back on Labour day trend this year. With gold trading like a champ, there was serious money to be made this summer.
As is often the case, in the last couple weeks of August, news flow slows down a bit. Today for example I only found a few news releases I wanted to comment on. This trend is why when it comes to seasonality trends, buying in the last couple weeks of August is soon rewarded in September is a great performer.
It is very similar to buying in the last couple weeks of December for the January pop to the upside. Both the August and December trends happen like clockwork, year after year after year. I’m anticipating a strong bounce this September for gold stocks.
Midland Exploration has entered into a strategic alliance with BHP to focus on nickel exploration in northern Quebec. Nickel is crucial to batteries and there is a big need for more mines, yet not a lot of exploration is focused on it. BHP will pick up the tab for the next couple years and Midland will be the operator. This sends a strong message that BHP has confidence in the Midland team. Since bottoming in March/April, the stock has performed very well and looks to have some clear sailing ahead.
I first picked Marathon Gold on November 22/2019 when it was trading at $1.52 and then several times after that, with the average pick price around $1.15. It has done very well since and is currently trading at $2.31 and they have nearly a ½ billion valuation. The chart is looking a little stretched and I think there are way better stocks to own. The news today was an update on their pre-feasibility analysis and resource update. In the lifecycle of a discovery there are two key periods. The discovery phase, and the mining phase. The period in between is the development discount window that isn’t rewarding to investors. They are just getting into that window and have a long way to go. Plus they have a guy running the company that helped lead Stornoway Diamonds to their debacle. This gives me little confidence about the other side of the development discount window and feel it is a good time to harvest gains to place on other stocks.
Orla Mining is in the late stages of the development discount window and they are a near term producer. When they turn on their mine in Zacatecas, Mexico, it will make them a top 10 of lowest cost gold miners. It has attracted a strong group of investors including Pierre Lassonde, who is one of the mining sectors most successful executives for a few decades. News today was they added to the team, someone that will focus on their exploration potential. I always like to find miners that also want to grow with the drill bit on the project they are mining. It is the classic mining saying of the best place to look for a mine is in the shadows of the headframe of a mine. It takes talent, not a lot can do it, both mining and exploration have different skill sets. But, having the backup of a low cost cash machine of a gold mine, will make the exploration much easier. These guys have two powerful catalysts ahead, one is higher gold prices and the beginning of mining operations. Lots of runway for this stock.
There you have it, another edition of news that caught my eye, have a great day.