Agoracom

......At the same time, sentiment among investors in the junior sector is at a decade-low. The market almost disappeared for some of the less followed juniors, with only a few stink-bids remaining. Any buying interest is met almost immediately with selling pressure. Selling is indiscriminate with the exception of a few high-grade deposit discoverers.

With the credit crisis nowhere close to being over, the best approach for investing in resource stocks is a highly selective one. We are currently focusing on:

• Companies with economically robust projects; high Internal Rate of Return (IRR) and short capital payback period;
• Projects located in politically stable regions of the world;
• Companies that have enough cash to advance their projects or who have strong management and major backers with an ability to obtain equity or debt financing;
• Companies with large enough projects which will attract the attention of the major producers.

Many companies that fit even these stringent criteria are trading at a deep discount compared to large producers. In fact, on average, the market values Proven and Probable reserve ounces held by senior producers at 10 times the reserves owned by these quality juniors. We do not recall a time when this valuation gap was so wide. For astute investors, who are convinced that the gold and silver bull will continue, extraordinary opportunities abound.

On the flip if oil continies to fall then so will our overheads/production cost.

Theres another 6 weeks of summer to sit out.

Be patient til then things will appear more clear in the fall