A Perfect Time to Be Contrarian

Written by Gerardo Del Real
Posted November 28, 2016 at 9:22PM

I hope everyone had a great Thanksgiving. As expected, the holiday season is proving to be a great time for contrarian investors to add gold to the portfolio.

Gold was down again this week. This time registering a 2% weekly loss and closing at $1,179 an ounce.

Silver was down just 0.4% for the week while copper continued to gain, closing at $2.67 a pound. A weekly gain of 8%.

All this as the dollar closed at its highest in over 13 years.

Platinum and palladium closed down 2.5% and 0.5%, closing at $908 and $741 per ounce respectively.

The move in the treasury markets continues to be a major driver as capital is rotating away from bonds and the precious metals markets and into stocks.

In the short term I expect that to continue and the combination of tax loss/gain selling the next few weeks will provide excellent entry points into many of the same stocks many assumed had gotten away from them price wise. Buy low, sell high. You can't do one without the other. Get the order right.

The next month or two will support the buy low part of the equation. If you plan to be in this sector, this is the time to begin initiating and adding to positions.

The Week in Juniors

Dolly Varden (TSX-V: DV)(OTC: DOLLF)

On November 23, 20-16 Dolly Varden announced assays results from its 2016 field program on the Dolly Varden project in northwestern BC.

The company reported 19.4 meters of 485 g/t silver at its Torbrit target.

Rosie Moore, Interim President and CEO of Dolly Varden, commented:

“While the size of our exploration program for 2016 was modest, we leveraged every opportunity to gather information that supports the long-term growth and expansion of estimated mineralization on the project; both within the current 43-101 resource area and at highly prospective regional exploration targets.  Both have the potential to increase value for shareholders.”

Dolly Varden Silver is focused on the exploration of the Dolly Varden silver property located in northwestern British Columbia, Canada. The 8,800-hectare Dolly Varden project is located 25 kilometers by road north of the deep tidewater port town of Alice Arm and was mined for high-grade silver in the 1920s and late 1950s. 

Dolly Varden Silver has controlled the project since 2011, with the first several years of field work focusing on the historic deposits.  The entire Dolly Varden property is considered to be highly prospective for hosting high-grade precious metal deposits, since it comprises the same structural and stratigraphic setting that hosts numerous other, on-trend, high-grade deposits such as Eskay Creek and Brucejack.

The company has recently undergone a corporate restructuring that was necessary and has been well received and is a story worth watching.

Kootenay Silver (TSX-V: KTN)(OTC: KOOYF)

On November 23, 2016 Kootenay Silver reported results from the first 11 holes of its maiden drill program on its RAM structure, situated approximately 700 meters to the west and south of the Company’s La Cigarra silver deposit in Chihuahua State, Mexico.

The program drill tested a 400-meter strike length of the 3,800-meter-long RAM structure and dip extents between 65 and 200 meters. Assay results from drilling confirm RAM is a strongly mineralized silver system, hosting multiple zones of quartz veining as sheeted, stockworked, or brecciated veins within an altered structure that measures 50 to 150 meters wide.

Drill Highlights from RAM Zone:

  • CC-16-04 returning 89.83 gpt silver over 18.0 meters; including 190.5 gpt silver over 3.0 meters
  • CC-16-09 returning 166.5 gpt silver over 6.0 meters; including 761.0 gpt silver over 1.0 meter
  • CC-16-03 returning 58.86 gpt silver over 16.5 meters; including 141.25 gpt silver over 4.5 meters
  • CC-16-01 returning 27.60 gpt silver over 31.1 meters; including 83.0 gpt silver over 4.45 meters
  • CC-16-06 returning 56.45 gpt silver over 14.7 meters; including 80.14 gpt silver over 9.35 meters

The 11 drill holes are the first phase of a planned, ongoing multi-phase drilling program that will be conducted on the La Cigarra project over the next 12 to 18 months.

Follow-up drilling of the 3,800-meter-long RAM structure is expected to commence in the early part of the new year and will form part of a larger strategy to test additional undrilled targets and the extensions of the La Cigarra deposit itself.

IDM Mining Ltd. (TSX-V: IDM)(OTC: RVRCF)

Lastly, on November 22, 2016 IDM Mining reported assays from 10 underground core holes completed at the Red Mountain gold project, located 15 km east of Stewart, BC.

Highlights from the recent underground infill and step-out drill results (capped) include:

  • U16-1201: 6.80 meters true width at 18.70 g/t Au and 66.85 g/t Ag; JW Zone infill
  • U16-1203: 10.39 meters true width at 4.94 g/t Au and 8.27 g/t Ag; JW Zone down dip step-out
  • U16-1210: 8.02 meters true width at 6.40 g/t Au and 7.42 g/t Ag; new JW HW zone
  • U16-1212: 7.67 meters true width at 5.64 g/t Au and 2.08 g/t Ag; JW Zone down dip step-out
  • U16-1216: 13.19 meters true width at 15.22 g/t Au and 49.85 g/t Ag; AV Zone infill and metallurgical hole

This batch of drill results is primarily from the JW Zone. Infill holes were targeted to potentially upgrade areas of inferred resource classification to a higher confidence level, as well as to expand the mineralized zone down-dip. Assays from an additional 15 drill holes are currently pending from the 2016 underground drilling program at Red Mountain.

"These results have been successful in identifying a new zone in the hanging wall to the JW zone and demonstrate that mineralization remains open for expansion down-dip," said Robert McLeod, President and CEO of IDM Mining. "Additionally, infill drilling continues to demonstrate continuity of the robust gold grade and structure for the AV and JW zones."

IDM is advancing a Feasibility Study for a high-grade underground gold mine, which envisions primarily bulk underground mining methods and gold ore produced on site.

The project is advancing through the Provincial and Federal Environmental Assessment process, with ongoing consultation with the Nisga'a First Nations government.

That’s all for this week. I’ll repeat what I’ve said for months; keep an eye on your favorite names in the junior resource space as tax gain/loss selling and lower gold and silver prices will provide exaggerated moves to the downside and very attractive entry points.

To your wealth,


Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

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