February 23, 2015

First Mining Finance Corp. is the new venture of Keith Neumeyer, the founder of First Quantum Minerals (FM.TO) and First Majestic Silver (FR.TO). I don’t yet have an opinion on the new company’s speculative/investment merits, because I haven’t yet taken a close look at its assets and because I won’t know its market valuation until after it IPOs sometime in the next couple of months (almost any company can be a good investment or a bad investment, depending on the market price of its shares). The reason I’m mentioning the company in this post is that I stole the following chart from its corporate presentation.

Regardless of whether or not the market ends up pricing First Mining Finance Corp. shares at an attractive level, the following chart of the TSX Venture Exchange Composite Index (a proxy for the junior end of the mining sector) suggests that junior Canadian resource shares are now collectively being priced at close to their most attractive levels ever. I didn’t expect that the buying opportunity would get this good, but there it is.

Large profits are likely to be made by speculators who accumulate financially-sound junior resource stocks with economic mineral deposits over the next few months and are prepared to hold for at least a year.


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