Political risk continues to be an increasing problem for miners. Yesterday Otto excerpted a particularly nasty PR from Pan American Silver regarding its Navidad project in Argentina, which it bought from Aquiline Resources.
In addition to political risk, mining investors face dilutive financing risk, execution risk and the risk that some of these projects just will not prove up as expected. Since I am a generally risk averse sort, I have been focusing on track record, net cash, proven resources and most definitely location; as in Nevada, Ontario, etc.
Not being a stock analyst, I find it easier to go with what is known - whether it be royalty income streams, established production, measured resources or significant cash levels - and leave the potential 20 baggers for more adventurous people with more adventurous risk vs. reward profiles. After all, even the less risky stuff has been puked up and put on sale over the last several months.
http://www.biiwii.blogspot.com
http://www.biiwii.com
Subscribe to NFTRH or
Subscribe to the free eLetter
In addition to political risk, mining investors face dilutive financing risk, execution risk and the risk that some of these projects just will not prove up as expected. Since I am a generally risk averse sort, I have been focusing on track record, net cash, proven resources and most definitely location; as in Nevada, Ontario, etc.
Not being a stock analyst, I find it easier to go with what is known - whether it be royalty income streams, established production, measured resources or significant cash levels - and leave the potential 20 baggers for more adventurous people with more adventurous risk vs. reward profiles. After all, even the less risky stuff has been puked up and put on sale over the last several months.
http://www.biiwii.blogspot.com
http://www.biiwii.com
Subscribe to NFTRH or
Subscribe to the free eLetter
Having lived in Argentina for almost 5 years, I can tell you its political risk is in a class all its own!
ReplyDeleteMoving to Chile, which is a legit EM
Thanks Patrick. I understand that about Arg. As for the general EM's, of course there will be risk and that is where reward will eventually come from (Africa is a great example). But for me in the mining sector especially, I prefer the known and the established right now.
DeleteGood luck on your move!