I had interesting chats with two mining exploration companies — one concentrating on copper, the other on silver. One has a big partner with deep pockets, the other is just getting started.
Both are good stories with enormous upside potential. But they also carry varying amounts of risk.
If the idea of turning a penny stock into a fortune maker appeals to you, read on.
By the way, I’m the first to admit that gold and precious metals have underperformed the recent inflationary shift we’ve seen in markets.
Gold may be slow out of the gate, but I know the next big move is coming. Money printing is hitting warp speed; the global financial system is creaking under the strain: All this “free” money sloshing around the system has to go somewhere, and my bet is hard assets.
And as this chart from GoldSilver.com shows, the biggest gains for gold tend to come in the second half of the year.
That goes for silver, too.
And as for copper? Well, the metal that takes the temperature of the global economy is already running a fever and is looking to heat up even more.
American Pacific Mining
The first company I talked to is American Pacific Mining Corp. (OTCQB: USGDF). I talked to this explorer before, back in November of last year. Since then, the stock is up about 200%! Obviously, something is going very right.
One major asset they have is a big partner, Rio Tinto Group (NYSE: RIO). Rio is drilling American Pacific’s Madison Copper-Gold Project in Montana as part of a joint venture.
Rio Tinto is spending $30 million to earn up to 70% of the project. Big companies like Rio don’t waste their time on small projects. They’re drilling right now, and we should hear results over the summer.
But the news that probably had the most impact was regarding Michael Gentile — a hedge fund manager active in the mining field — and his investment in American Pacific. He’s known to have an eye for companies with extraordinary potential.
Madison isn’t the whole story for American Pacific. The company also has high-grade gold and silver exploration projects in Nevada. And it’s actively looking for more acquisitions.
Anyway, I’ll let American Pacific’s CEO Warwick Smith and President Eric Saderholm explain the rest.
The next company is Lakewood Exploration Inc. (OTC Pink: LWDEF). Few people have heard of this company; it’s new, and listed on the Canadian Securities Exchange (or CSE) in Canada and the OTC Pink Sheets in the United States. It has very little volume in the U.S., and only middling volume in Canada. Lakewood Exploration is the poster child for “undiscovered.”
Boy, though, it may be on to something big.
The company shares some management with American Pacific — which isn’t unusual in the mining field — and that’s how I found out about it.
One thing it has that American Pacific doesn’t is Lawrence Roulston. He’s a highly respected name in Canadian mining — a geologist with engineering and business acumen.
If you know Mr. Roulston, you know he doesn’t waste his time. Lakewood Exploration has real potential.
Lakewood jumped to attention through its purchase of the Silver Hammer Mining Co and its Silver Strand project in the Coeur d’Alene Mining District in Idaho. That’s a district that has produced 1.2 billion ounces of silver and is still producing silver. It’s elephant country.
The Silver Strand Project is one of those properties that was tied up in a grudge-feud for years. Roulston and his team solved the matter by buying out both parties. Now, the race is on to see what’s hidden beneath the surface.
In this video, Mr. Roulston (who was able to join us by voice only) and Kristina Pillon explain the potential upside for Lakewood.
Like I said, Lakewood is just getting started. I wouldn’t recommend buying a company with such low volume, unless your tolerance for risk is extremely high. But it’s worth keeping an eye on.
Both these companies are explorers, and therefore inherently risky. American Pacific is a lot LESS risky because it has a deep-pocketed partner in Rio that is writing checks for the drilling activity at Madison, and it has two more very prospective silver and gold projects besides.
Lakewood is much riskier. But with great risk sometimes comes great reward.
Remember to do your own due diligence before buying anything.
I think you have to know your own appetite for risk and reward. But I’d say Mr. Roulston’s chances of turning up a silver lode is better than average.
All the best,