Wednesday, January 13, 2010
Back in November 2008, a tiny precious-metals explorer announced the discovery of a potentially huge silver deposit in Argentina.
By the time I told you about it in September 2009, shares had already risen 1,000% from their November 2008 low. Here's what the chart looked like then:
Here's what it looks like now:
Shares of Mirasol Resources (MRZ on the Toronto Venture Exchange) are up around $2.40... another 250% higher than they were in September.
You can track the explosive gains against the drilling results. Those upward spikes confirm my suspicion this is a huge discovery...
The release from November 24, 2009 was a doozy: "Mirasol Reports Highest Grade Silver Yet from the La Negra Zone at Joaquin with 25.4 Meters of 1,164 g/t Silver."
That means the company cored through about 75 feet of rock that held over 36 ounces of silver per ton. At $10 per ounce silver prices, that rock is worth $360 per ton. At the current price of $18 per ounce, that rock is worth over $650 per ton. That's extremely rich rock.
Three million shares traded the day of the announcement, and the price doubled almost immediately.
The company announced a new high-grade vein on January 6, 2010. And shares jumped 31% overnight.
Even though shares of Mirasol are up 2,130% from their 12-month low, the company's market cap is still just $64 million. This discovery is still underway, and a takeout offer could see this company sold at a 50% premium to its current price.
It won't be the only one...
Prospect generators are junior mining companies, like Mirasol, that explore for minerals using other people's money.
Back in September, I told you, "You buy prospect generators for the possibility of a big score. Buy a basket, take a lot of small losses on the way, and wait for that 1,000% winner."
I think you'll see a few more of those 1,000% winners this summer. Demand for gold and platinum discoveries is huge, so good news will be rewarded. In addition, you have major gold companies like Goldcorp buying junior miners with discoveries. (In November, for example, Goldcorp scooped up tiny Canplats Resources and its Mexican gold deposit. Shareholders pocketed 370% in less than a year.)
These trends put a tailwind behind prospect generators.
If you could pinpoint only the junior miners that will strike it big, you'd soon be taking your ease in a grand villa on some tropic island. But, of course, that's nearly impossible. So what you do is buy a basket, take a lot of small losses on the way, and wait for that 1,000% winner.
Here's a short list of interesting junior mining companies with emerging discoveries:
Remember, these stocks are still risky, so only invest money you can afford to lose. Use 50% trailing stops to protect yourself.
If you follow these simple rules, you could find a 1,000% winner this year.
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