Friday , 19 July 2019


Gold & Silver Junior Miners: Pile In Now For Future 10-Bagger Returns!

Holding physical Silver and Gold is the safe play with a big potential leverage – no doubt – but to hold some percentage of Gold and Silver Stocks for even higher leverage seems logical and no doubt that this time around, the leverage in price will be increased due to the massive number of USDs that have been printed.

By Goldrunner with Lorimer Wilson

With that said, the real leverage will be in the Silver Explorers instead of he producers. Producers in the 70’s were the safe plays up to this juncture since explorers, with no income from production, could be shorted heavily. Is the same true this time around? My expectation is “you betcha.”

The reason Silver Explorers will likely carry much more leverage going forward is a simple one: smart money knows that a higher premium will be given to decent explorers going forward due to rapidly rising prices of reserves (Silver in the ground). The same will be true for the Gold sector.

Why now? Well, the Street has a rule for the PM sector that is unheard of in other sectors- “All old tops must be re-tested!” yet, with the coming upside break-out in Gold and Silver versus the 70’s charts, this “rule” will be abandoned. Rising prices for good reserves in the ground will go parabolic as a result.

The explorers moved late as a result of rapidly rising premiums on “reserves in the ground” that were held back until Gold/ Silver made their final parabolic run thus, one could have held out during this part of the cycle in the 70’s and still enjoyed practically “the whole PM Bull Market.” I believe the same is true, today, since the charts are mere twins of the 70’s for all things PM.

[Here’s a sampling of gold producer stock prices from the late 70’s. {Source: Check It Out: Gold Stock Manias in 79/80, 82/83 & 95/96 Saw 2,000 – 4,000% Returns – and It Could Happen Again)

Returns of Producers in 1979-1980 Mania
Company Price on
12/29/1978
Sept. 1980
Peak
Return
Campbell Lake Mines $28.25 $94.75 235.4%
Dome Mines $78.25 $154.00 96.8%
Hecla Mining $5.12 $53.00 935.2%
Homestake Mining $30.00 $107.50 258.3%
Newmont Mining $21.50 $60.62 182.0%
Dickinson Mines $6.88 $27.50 299.7%
Sigma Mines $36.00 $57.00 58.3%
Giant Yellowknife Mines $11.13 $39.00 250.4%
AVERAGE     289.5%

It should be noted here that gold stocks did not peak until nine months after gold.

Here’s a sampling of how some successful junior gold stocks performed.

Returns of Juniors in 1979-1980 Mania
Company Price on
12/29/1978
Price
Peak
Date
of Peak
Return
Carolin Mines $3.10 $57.00 Oct. 80 1,738.7%
Mosquito Creek Gold $0.70 $7.50 Oct. 80 971.4%
Northair Mines $3.00 $10.00 Oct. 80 233.3%
Silver Standard $0.58 $2.51 Mar. 80 332.8%
Lincoln Resources $0.78 $20.00 Oct. 80 2,464.1%
Lornex $15.00 $85.00 Oct. 80 466.7%
Imperial Metals $0.36 $1.95 Mar. 80 441.7%
Anglo-Bomarc Mines $1.80 $6.85 Oct. 80 280.6%
Avino Mines 0.33 5.5 Dec. 80 1,566.7%
Copper Lake $0.08 $10.50 Sep. 80 13,025.0%
David Minerals $1.15 $21.00 Oct. 80 1,726.1%
Eagle River Mines $0.19 $6.80 Dec. 80 3,478.9%
Meston Lake Resources $0.80 $10.50 Oct. 80 1,212.5%
Silverado Mines $0.26 $10.63 Oct. 80 3,988.5%
Wharf Resources $0.33 $9.50 Nov. 80 2,778.8%
AVERAGE       2,313.7%

If you had bought a reasonably diversified portfolio of top-performing gold juniors prior to 1979, your initial investment could have grown 23 times in just two years. If you had managed to grab 80% of that move, your gains would still have been over 1,850%.

Here’s what returns of this magnitude could mean to you. Let’s say your portfolio includes $10,000 in gold juniors that yield spectacular gains such as the above. If the next boom cycle matches the 1979-1980 pattern, your portfolio could be worth $241,370 at its peak… or about $195,000 if you exit at 80% of the top prices.

Many analysts refer to the 1970s bull market as the granddaddy of them all—and to a certain extent it was—but you’ll notice that the average return of these stocks during the late ’90s bull exceeds what the juniors did in the 1979-1980 boom.

Here’s how some of the juniors performed.

Returns of Juniors in Mid-1990s Bull Market
Company Pre-Bull
Market Price
Price
Peak
Date
of High
Return
Cartaway $0.10 $26.14 May 96 26,040.0%
Golden Star $6.00 $27.50 Oct. 96 358.3%
Samex Mining $1.00 $7.20 May 96 620.0%
Pacific Amber $0.21 $9.40 Aug. 96 4,376.2%
Conquistador $0.50 $9.87 Mar. 96 1,874.0%
Corriente $1.00 $19.50 Mar. 97 1,850.0%
Valerie Gold $1.50 $28.90 May 96 1,826.7%
Arequipa $0.60 $34.75 May 96 5,691.7%
Bema Gold $2.00 $12.75 Aug. 96 537.5%
Farallon $0.80 $20.25 May 96 2,431.3%
Arizona Star $0.50 $15.95 Aug. 96 3,090.0%
Cream Minerals $0.30 $9.45 May 96 3,050.0%
Francisco Gold $1.00 $34.50 Mar. 97 3,350.0%
Mansfield $0.70 $10.50 Aug. 96 1,400.0%
Oliver Gold $0.40 $6.80 Oct. 96 1,600.0%
AVERAGE       3,873.0%

If one has a few extra bucks, one might want to spread them around a few PM explorer stocks. It is only my opinion, so by all means, study up and DO YOUR OWN DUE DILIGENCE in terms of the above.

The massive number of Dollars printed suggest huge inflation to come in the USA. The number one hedge for inflation – one that historically also pays you a premium early on – is Gold and Silver and, historically, Silver carries the highest premium for reasons I wrote above.

If history repeats, so many will look back at this day and say, “Why, oh why, did I not listen to Goldrunner? Silver at $14.98 is about as good a time as it gets. IT’S LAST CALL AT THE BAR………..THE SILVER BAR.

Scroll to very bottom of page & add your comments on this article. We want to share what you have to say!

“Follow the munKNEE” via Twitter and/or Facebook and have your say. Shock us, surprise us, inform us, entertain us. Here’s your opportunity to start a dialogue. Our Twitter & Facebook feeds are also the most comprehensive resources of the very best-of-the-best financial, economic, investment and gold/silver articles out there. Mark them as your favorites and get access to every article as posted.

Related Articles from the munKNEE Vault:

1. This Opportunity Is Being Handed to You On A Silver Platter!

Talk about having an opportunity handed to you on a silver platter! Whether it’s buying shares of SLV or purchasing physical bullion, there really isn’t much of a downside at this point. If you haven’t staked your claim, now’s a good time to do it.

2. Prepare & Prosper – Gold Equities Could Experience +1000% Returns Once Again! (+2K Views)

We are in the eye of the storm and when the other side of the vortex engulfs us gold and silver will increase considerably, their associated stocks will go up substantially and their warrants, where available, will escalate dramatically. With what has happened in the world of late and what will be unfolding in the next 5 years or so those few investors who fully understand the impact the current economic situation is going to have on future inflation, the USD, interest rates, the stock market, physical gold and silver and gold and silver stocks and warrants in particular are going to be in the unique position of being the benefactors of currently unimaginable returns and wealth. All they need do, as I like to say, is “Just prepare and prosper!” Words: 918

3. Silver Prices Are Way Too Low Any Way You Look At It

The graphs below show that silver prices are too low based on five decades of history and via comparisons to national debt, the S&P 500 Index and gold. Expect silver prices to rise far higher in coming years as the over-leveraged financial system resets and rebalances.

4. Buy Silver Instead of Gold! Here’s Why (+8K Views)

We are at the beginning of a major shift out of paper assets into real assets and the more I studied the merits of owning gold and silver the more I realized that silver was the smart decision. Let me explain.

5. Why You Should Own Some Silver – As Well As Gold (5.9K Reads To Date!)

Silver has had quite a run the last couple months… so it’s no surprise that it has gained much attention and interest from investors – even more so than gold. It is extremely volatile, however, and tends to rise or fall in spurts so I’d like to focus on its attributes as compared to gold, make a case for holding some, and discuss some ultimate price possibilities. Words: 1606

6. 10 Compelling Reasons To Add Physical Silver To Your Portfolio (+2K Views)

It’s natural and even prudent for an investor to wonder if a particular asset is a good investment or not and that’s especially true for silver, since it’s such a small market and doesn’t carry the same gravitas as gold. At this point in history, however, there are 10 compelling reasons to add physical silver to your portfolio.

7. What You Need to Know Before Investing in Silver (2.7K Views To Date)

I believe there is more opportunity in the silver market over the next two years relative to gold and, as such I’m now advocating accumulating a large overweight position in silver relative to gold because, over the long-term, there is such a great demand vs. supply situation developing….Before investing in silver, however, there are a number very important things that you must understand about the silver market. Let me explain. Words: 899

8. Buy Silver Instead of Gold! Here’s Why (+8K Views)

We are at the beginning of a major shift out of paper assets into real assets and the more I studied the merits of owning gold and silver the more I realized that silver was the smart decision. Let me explain.

 

Leave a Reply

Your email address will not be published. Required fields are marked *