Resource Penny Stocks to Watch: Post PDAC 2016 Update

Stock price performances have averaged 66% in just more than two months following the Convention

SmallCapPower | May 19, 2016: So much for the PDAC curse. Unlike in many previous years, most junior resource stocks continued to rally following this year’s Prospectors & Developers Association of Canada (PDAC) convention. On March 10, 2016, we wrote about some mining penny stocks that we thought could do well even after the Convention hype wore off. The results, so far, have exceeded our wildest expectations.

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SciVacKaminak Gold Corporation (CVE:KAM): +65% (March 10 – May 18, 2016)

Kaminak’s Coffee gold project in the Yukon has been the talk of more than a few experts/analysts. And, a January 2016 feasibility study confirmed its potential – estimated production of 184,000 ounces of gold per year over a 10-year mine life from heap leach operations. Requiring C$318 million of capital, this project could generate an NPV (5% discount) of C$295 million and an IRR of 27%, at a gold price of US$1,000 per ounce, and with All-In Sustaining Cash Costs of just US$550 per ounce.

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SciVacMajor catalyst: On May 12, 2016, Goldcorp Inc. (TSE:G) announced an agreement to acquire Kaminak in an all-stock transaction valued at approximately C$520 million. The shareholders of this gold penny stock will receive 0.10896 common shares of Goldcorp for each Kaminak share held.

SciVacNexGen Energy Ltd. (CVE:NXE): +70% (March 10 – May 18, 2016)

This junior uranium stock market darling, with its Rook I property Saskatchewan’s Athabasca Basin, has been on a tear since the Company released its maiden Mineral Resource estimate for the Arrow deposit on March 3, 2016. It showed 201.9 M lbs grading 2.63% U3O8. Analyst and newsletter writer John Kaiser, in an interview with BNN, believes there’s an “institutional appetite for a high-grade discovery in the Athabasca Basin.”

Major catalyst: NexGen’s drill results, which included 67.5 metres at 11.29% U3O8 that was released on May 5, have continued to exceed expectations, prompting some market commentators to believe the Company will receive a takeover bid sometime in the next year. The only negative surrounding NexGen seems to be the sluggish uranium price itself.

SciVacBelo Sun Mining Corp. (TSE:BSX): +62% (March 10 – May 18, 2016)

The Company is developing its 100% owned Volta Grande (open pit gold) Project in northern Brazil. A Feasibility Study completed last year estimated average annual gold production of 205,000 ounces per year over a 17 year mine life at all-in sustaining costs of US$779 per ounce. This is based on Proven & Probable reserves of 3.8 million ounces of gold at a grade of 1.02 grams per tonne. Agnico Eagle Mines owns a 17.4% stake in Belo Sun. Trading volume in Belo Sun Mining’s stock spiked during the first two trading days of PDAC and the ‘buzz’ at the Convention was that its construction permits are pending and that Agnico Eagle could make a bid for the remaining shares that it doesn’t already own sometime in the next year.

Major catalyst: Seems to be the favourable gold stock environment currently, as Belo Sun has been relatively quite since the PDAC 2016 convention.

For more gold junior investing ideas please see our Ubika Gold 20 reports >>

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