Everybody thought that the weak gold price was the cause of the deteriorating gold stock price behavior, this is just part of the story. I had a chat with a mining company and they confirmed me that several liquid mining stocks (explorers/developers) in Canada are sold heavily due to redemption’s the last 6 months. After NVO and GGI stories that did not worked out completely, the Canadian explorer market is tired and needs new exploration success. The same I read on Eric Coffin website, stating that PDAC was very disappointing with no new stories this year.

On top of that there are still too many exploration companies with less capable management chasing the same $$. The last 3-6 weeks I received several inquiries for private placements for companies that are very low on cash and seeking to raise hardly 1M Cad$. As overhead of a mining company is quickly 1M/year, if they do not raise 3M+, these companies will never have enough money to drill and realize shareholder value. Therefore better avoid these companies. Maybe we need a new bear market so more of these lesser quality names can go out of business.

Better invest in 30-50 M market cap companies with proven management and ounces in the ground or proven drill work. Just to give an example, GPY has drilled 20000+ m already and is sitting on a very high grade deposit in the Yukon, Market cap is 45M, but you get a lot of expertise and proven drilling in place.