It’s not easy finding love in the resource sector these days. Just ask the explorers trying to raise funds. There are some stocks amongst the juniors in our opinion, though, that are being pursued with too much vigor.
It is important to note that the following juniors may, in fact, be good companies with great prospects but nonetheless caution should be excised before jumping into some of these names at current market prices.
Brilliant Resources Inc. (TSXV: BLT): Some speculators got excited when Brilliant announced on January 22, 2015, that its wholly-owned subsidiary Ivory Resources will receive US$31.5 million in cash from the Republic of Equatorial Guinea to give up its exploration rights in that country. Brilliant Resources also owns a nickel/copper property in Labrador that it hasn’t done any work on in years. Who knows what the company will do with its windfall but current shareholders shouldn’t expect a special dividend anytime soon. Brilliant’s website offers no clues.
North Arrow Minerals Inc. (TSXV: NAR): North Arrow has interests in seven diamond exploration projects throughout Canada, mostly in that country’s Far North. On February 26, 2015, the company reported that two +4 carat yellow diamonds were recovered from ongoing processing of a bulk sample from the Qilalugaq Diamond Project in Nunavut. Some early reviews on the Street were mixed as to the significance of these results. What is more certain, however, is that diamond project development is among the riskiest in the mining industry. Diamond-loving investors may want to consider shares of Tiffany & Co. (NYSE: TIF) and its sparkling stock price performance since the beginning of the Great Recession.
NioCorp Developments Ltd. (TSXV: NB): NioCorp is developing what it calls the only primary niobium deposit in the United States and highest grade, large tonnage deposit under development anywhere in the world, that being its Elk Creek resource in Nebraska. Niobium is used to strengthen and lighten steel, and it makes it corrosive resistant. The company’s stock price ran up 420% in 2014 and it has a current market cap of about $136 million. NioCorp has yet to complete a feasibility study on the deposit.
Bacanora Minerals Ltd. (TSXV: BCN): Bacanora has a lithium as well as a borate project in Mexico. The company has yet to do a feasibility study on either projects and is currently searching for a new CEO. Bacanora was named after a Mexican agave liquor and speculators have been getting drunk off its stock of late, sending its shares up more than 100% since early December.
Brazil Resources Inc. (TSXV: BRI): The company has gold projects in Brazil and Paraguay as well as a 75% interest in a uranium project in the Athabasca Basin. Its gold projects are grading less than two grams per tonne. Its uranium asset, though, may hold the key to the company’s future, although Brazil Resources needs to decide which type of miner it wants to be.
