…of junior PM analysis.  Trying, to get all the Trump haters to read on…

Don Durrett, whom I recommend for great analysis at an outstanding price has these two nuggets for you.  FCF’s are the one ring to rule them all….the miners that is….and for these two miners, the FCF is at 2.  To put that in context, here’s a table regarding FCF multiples and what they mean:

FCF Multiples ( Editor’s note FCF = Free Cash Flow )

1-3: Very Low

4-6: Low

7-10: Normal

11-15: Good

16-20: High

21-24: Very high

25: Rare

So, this is from DD’s (he’s a dude, but sorry that’s quick to type….) update this weekend:  Do your own DD on DD’s picks…that’s ironic, no?

I expect to make 80% of my profit from producers, or developers that become producers in the next 3 years. I want to own any mid-tier producer that I can buy cheap (5+ baggers). I rarely pass on a quality mid-tier producer because of location risk. Most quality mid-tiers have mines in multiple locations to offset the location risk. This week, I bought Mako Mining (an emerging mid-tier producer), and I added it to the Top 25. I was never a fan, but they have been a shark (fitting their name), acquiring projects and growing production. They print at a forward FCF multiple of a 2. They were too cheap to ignore.

I also added more shares of Mineros S.A., which has a 3 FCF multiple. Plus, they are growing production. So, they are trading at a forward FCF multiple sub 2. Buy low, and sell high. That’s the plan.

Look at Mako’s shares o/s…holy cow, less than 100 million, for a junior, and no debt.  That’s like Cindy Crawford agreeing to go out with you before she was famous….if you are buying pm stocks and it feels easy, you are at a top…if it feels hard and foolish, probably near a bottom for the correction.