Cheap Mining Speculations that Became Cheaper

Still like these two.

Add Some Here

Adyton IPOd in the middle of an intermediate-term bear cycle in gold mining stocks. That was largely the reason, I believe, for its sinking to 4 cents. The confounding factor is the need to raise money evntually, which becomes increasingly shareholder destructive as the price drops. Alkthough the company isn't short on cash yet, management tried a raise in December down at these levels and was promptly removed by the largest shareholder. The board resigned too. That shareholder (Mayur Resources) has 43 percent of the shares.

The most recent news is the 2-year extension of their exploration license in Papua New Guinea. The have 2 million oz already, plus copper. Market cap down here is CAD$7.5 million. ADYRF is the OTCBB symbol, seems to have some decent liquidity on the bid/ask today, but that is relative to many stocks that often have zero liquidity. Stocks like this require limit orders.

This is high risk/high reward stock, dependent on higher gold prices. My bull thesis: new management waits for raising capital as long as possible, and that the gold prices solves the problem of dilution by lifting the stock. Mayur has shown itself to be properly self-interested and while we can't trust that they will act in all shareholders' best interest, their move in December was very encouraging. If I'm right about capital flowing into gold/miners and the new management is patient, then this looks like a great speculation.

Interested in Lithium?

Many hybrid cars use lithium-ion batteries and this has spawned intense interest in lithium as an investment. Most importantly, China is pushing its automakers to move to electric, a topic I covered back in April. I did some quick research and came up with a few names (symbols from Yahoo Finance).

Chemical & Mining Co. of Chile (SQM)
FMC Corporation (FMC)
Admiralty Resources (ADY.AX)
Canada Lithium (CLQ.V)
Western Lithium Canada (WLC.V)
Lithium One (LI.V)
Rodinia Minerals (RM.V)

It clear that investors are late to this party if they're looking for the easy gains. I haven't dug into this sector, but in pure psychological terms, if I was very bullish on the stock market I would expect this sector to attract a lot of speculative activity, while it would be hard hit during another panic. As an investor I would prefer lower prices, but recent gains are partially due to favorable comparisons due to last year's panic. A longer view shows a less extreme move from pre-crash levels.
Most of the more speculative names have risen to new highs, while the diversified SQM and FMC are still off their highs. Whether current levels are attractive is another question, in addition to the question of whether lithium will prove to be part of any winning technology.