Independent financial analyst Matt Badiali examines the current bear market in junior mining stocks, profiling Vizsla Silver, Arizona Sonoran Copper Company and Cross River Ventures Corp. to tell you what stock risks are worth the reward.
There is a bear market for junior mining stocks today.
Investors are scared and that overshadows everything. It makes big projects cheaper and it overshadows some big new discoveries.
You need look no further than the market’s response to the good news lately. Take for example the latest press release from Vizsla Silver Corp. (CVE: VZLA).
Monday, June 21st, the company announced drilling of 1,030 grams per tonne silver equivalent over 20.45 meters. This is excellent news that should have caused the share price to rise. Here’s what the stock did (image at left).
Another example is Arizona Sonoran Copper Company Inc. (TSE: ASCU), which reported reaching 1.32% copper over 479 feet on June 23. The press release was excellent… and investors also welcomed this news by selling.
In both cases, the results created real value for shareholders. And in a rational market, reported results for these two companies would translate into higher stock prices.
But today, we have a “risk-free” market. And good news receives higher sales volumes. Owners are using all the news to dump stocks and run.
This has put enormous downward pressure on prices in the junior mining sector. But it creates an opportunity for investors who understand the cyclicality of natural resource markets.
And while current shareholders lament this situation, the rest of us should be licking our chops. Because some exciting projects are getting cheaper and less risky, price-wise.
Take this little exploration company Cross River Ventures Corp. (CRVC: CSE; CSRVF: OTC; C6R: FWB) in Ontario, for example.
In March 2022, I wrote about several exciting gold projects in the Red Lake region of Ontario. Called “The Nevada of the North”, Red Lake is currently the darling of major gold mining companies looking for new projects.
In the essay, I pointed to two small companies that are preparing to drill… and one of them paid off. As I mentioned in this essay, Cross River Ventures Corp conducted its first drilling campaign on its McVicar project last winter. The results were better than expected. The program found high-grade gold in its first drill program on the Bear Head zone.
The high grade BH-02 gold appears to be part of a vertically dipping structure as you can see below.
This structure outcrops at surface and transports gold into holes BH-03 and BH-02. In BH-02, the core contained visible gold:
These are great results for such a small company. And it’s a brand new gold discovery at the base in Red Lake.
The company released the news on June 16.e that it reached 41.1 g/t gold over 0.5 m with visible gold in the core. This is an excellent result for the very first drill program.
And, as expected, the market sold off the company, as you can see below.
Cross River is a small business. And in a normal market, the discovery of Bear Head Zone would have pushed stocks higher.
But this market is brutal. And that gives us a chance to buy shares at a steep discount.
Cross River Ventures has a very promising 11,500 hectare project on the Lang Lake greenstone belt, just east of Red Lake. The rocks looked like a fantastic area to explore. But now they have a high-grade gold discovery on their first set of holes. And are currently awaiting the rest of their drill results.
It’s the kind of exploration story often swallowed up by the shock of a bear market.
A small company finds high-grade gold, and nobody noticed. That’s why I’m telling you now. The story is great, the stock is cheap, and the rocks are exciting.
Cross River Ventures is one to watch.
Contact Matt Badiali at www.mangroveinvestor.com.
Matt Badiali is the founder and CEO of Mangrove Investor Media, an independent investment research publisher. He is a geologist by training, an investment analyst by profession and a writer by nature. He began researching and writing about natural resource investments in 2004. His research has appeared in Bloomberg, Barrons, The Wall Street Journaland Forbes. He is an avid surfer, boater and fisherman. You can find it at www.mangroveinvestor.com.
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1) Matt Badiali: I, or my immediate family members or relatives, own stock in the following companies mentioned in this article: Vizsla Silver Corp. and Cross River Ventures Corp. I am personally, or members of my immediate family or relatives are, paid by the following companies mentioned in this article: Cross River Ventures Corp. I determined which companies would be included in this article based on my research and understanding of the industry.
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